The line between fixed and mobile satellite services (FSS and MSS) is fading, as operators evolve to cater for soaring broadband demand on a global scale.
FSS operators have been encroaching into MSS territory for a while, as they seek to tap an…
The line between fixed and mobile satellite services (FSS and MSS) is fading, as operators evolve to cater for soaring broadband demand on a global scale.
FSS operators have been encroaching into MSS territory for a while, as they seek to tap an increasing need for mobile services to differentiate themselves in a mature and saturated market. However, with new, more powerful satellite constellations on the horizon, MSS operators from UK-based Inmarsat to Iridium in the US are increasingly targeting markets that have traditionally been the hallmark of the FSS sector.
In an interview with SatelliteFinance, Andy Start, president of Inmarsat’s global government division, described this trend as “fundamentally changing the game”.
Inmarsat is traditionally known for its L-band mobile services, particularly for voice communications. However, the company plans to operate its second generation Global Xpress constellation towards the end of 2013, which will give it Ka-band connectivity too.
The two bands will work in harmony together to provide continuous global services, explained Start.
“That is just transformational in terms of what it can do for the customer,” he said.
“We are reshaping the market, because even the concept of MSS versus FSS starts to disappear with Global Xpress. It just becomes irrelevant.
“The concept that if you are global you can be local – and if you are mobile you can be fixed – fundamentally changes the game. If you think about what people really do, they are either trying to communicate on the move, or where they happen to be right now. People are never fixed; facilities are fixed. So this changes the dynamic in the way the user looks at the world, and what is interesting to him or her.”
Once operational, for instance, Global Xpress will aim to bolster services across fixed oil and offshore drilling platforms, where reliable connectivity is seen as crucial for the exploitation of natural resources.
Global Xpress also aims to offer high-speed in-flight broadband services – a market where FSS operators such as Intelsat are also eyeing for growth.
Start highlighted how, from the beginning of this year, Inmarsat has become increasingly market-focused as part of efforts to capitalise on this new playing field. Since January, the company has embarked upon a company-wide strategy to fully utilise the potential in markets where it is already present.
The company’s government divisions are currently present in 200 markets, but the top 20 countries are generating 90% of the revenue, predominately in defence.
“In part that is because of the size of the nations, but it has as much to do with the level of focus that is being applied,” said Start.
He added that his global government division, which covers all markets apart from the US, is generating more than US$100m in revenue. Start cited that non-US global government spend equates to around US$220bn on communications and IT – roughly split 50/50.
To help tap this, Inmarsat has been buying distribution partners in recent years, including Stratos and Ship Equip, although Start ruled out plans to acquire further businesses of this type.
“We have no intent to become a retailer,” he said, adding that the group planned to now focus on growing organically.
FSS moving into MSS
Also on a mission to build relationships with end users, against the backdrop of a fast evolving playing field, is global FSS operator Intelsat.
“One of our biggest challenges, and something we spend a lot of time on, is educating our customers and the end users,” said Jay Yass, VP of global accounts and strategic sales at Intelsat.
“Satellite services are highly complex, and the technological landscape is changing on a seemingly daily basis.”
According to Yass, the line between the FSS and MSS sectors is blurring primarily because of the recent convergence of applications that once helped to separate the two services.
He explained: “Years ago, a global shipping company might have used satellite services for such low-bandwidth applications as container tracking and S.O.S. connectivity. Nowadays, that same shipping company wants the myriad of benefits that are provided by always-on, true broadband VSAT connectivity.”
Intelsat sees significant potential to expand its business in many aspects of the traditional MSS sector. The operator is currently anticipating the completion of its Global Mobility Network in early 2013, which will see it operate a worldwide satellite broadband system on seven satellites, featuring ten Ku-band beams. Four of those satellites are in orbit now, with the rest earmarked for early next year.
“We see the potential for growth in the maritime sector that includes oil and gas exploration, cruise and leisure ships, and commercial shipping,” said Yass.
“In the aeronautical sector, commercial airlines are clamoring for new satellite infrastructure to support in-flight WiFi.”
Yass believes there will always be debates over which frequency band, and which encoding technique, is better, but in the end it falls upon how tailored a solution is for a specific application.
“Going forward, it does seem like there will always be a niche for the MSS capabilities, in particular LEO systems that provide truly global coverage,” he continued.
“For certain low-bandwidth applications and emergency communications, these types of systems are adequate, especially when used as a back-up to FSS VSAT capabilities. For mission-critical applications today and in the future, VSAT is the only viable option, as data-centric business operations continue to proliferate.”
Greg Ewert, VP of global distribution channels at MSS operator Iridium, agreed that, although the line between the two sectors is blurring in some market segments, they will both continue to have a place in the industry.
Iridium, which is also gearing up to launch its own next generation constellation called Iridium NEXT, sees a natural fit in bundling VSAT services with voice and data offerings from MSS operators.
But according to Ewert, the fact that MSS and FSS operators are increasingly introducing combined offerings does not necessarily mean they will be in competition with each other.
He explained: “It doesn’t have to be a competition between FSS and MSS. This is an opportunity for companies to join together to provide a service that fits the customers’ needs and budget.”
In any case, as technological advances continue to drive and reshape the satellite sector, operators across the board will be keen to chase new opportunities in this evolving playing field.
The increasing availability of high throughput satellites will bring operators of different sectors closer together, and new business dynamics will come into play on the back of this emerging application neutrality.
