Re-Discovering Satellite Capacity for IFC

Transcription

1 June 4, 2018 GCA 2018 Re-Discovering Satellite Capacity for IFC

2 Agenda About NSR State of the Satcom Industry Battle of the Bands Key Issues to Consider Anticipating Game Changers Bottom Line

3 3 Clients Across the Value-Chain About NSR Industry Leading Market Research & Consulting Services in Satellite and Related Industries to Clients Around the World. Satellite Operators Service Providers End-Users

4 Aeronautical SATCOM Markets, 6 th Edition Available Today Inflight connectivity (IFC) will generate $37 billion in cumulative revenue by NSR estimates only one-quarter of all IATA-registered airlines had some type of passenger IFC under contract at the end of to see a near-doubling of revenues and 50% more aircraft with inflight connectivity capabilities. 4

5 State of the Satcom Industry The Orbits The Bands The Prices What Goes into a Network?

6 The Orbits Geostationary Earth Orbit (GEO) ~35,786 km (22,236 miles) above Earth where majority of communications satellites are located today. Medium Earth Orbit (MEO) Area between LEO s 2,000 km (1,243 miles) and below geostationary orbit of 35,786 km (22,236 miles). O3b provides it s broadband connectivity from this orbit, and faces fewer competitors moving into this orbital area. ViaSat has announced plans to launch a MEO constellation. Low-Earth Orbit (LEO) ~ 2,000 Kilometers (1,200 miles) above Earth, where constellations such as Iridium and Globalstar operate providing satellite phone services. OneWeb, Telesat, SpaceX, and others looking to launch thousands of satellites to provide broadband internet connectivity with high throughput and low latency. 6

7 Architectures and Orbits In Space Traditional Satellites Ocean-Sized Coverage allows easy roaming, but comes at the cost of per-ship throughput. Legacy design first for Satellite Television, then adapted for mobility applications. High Throughput Satellites (HTS) Satellite s footprint (coverage area) divided into numerous smaller beams that allow higher enduser connection speeds and/or smaller antennas. Designed for Data-centric Applications, satellite operators in period of replacing traditional satellites with an HTS designs. 7

8 Insatiable Demand for Bandwidth Consolidation in Value-Chain Architectures & Orbits Major Changes in the Satellite Industry More Connectivity Across Entire SATCOM Industry Social Media, Streaming Video ABC s: Aeronautical (and Maritime), Backhaul, Consumer Broadband Service Providers Merging AND Satellite Operators Becoming Service Providers Modems & Ground Equipment Evolving Satellite Networks are Moving from GEO to MEO to LEO 3x More Satellites launched Over Next Ten years 10x Increase Satellite Capacity Added over Ten Years 8

9 A Growing Supply of Capacity in Space Global Satellite Capacity Supply in Gbps FSS, GEO-HTS, & Non-GEO HTS ,800 Gbps ,550 Gbps Gbps Today: 2,340 Gbps

10 A Growing Supply of Capacity in Space Satellite Capacity Supply (Gbps), by Orbits & Architectures Legacy GEO-HTS LEO+MEO Over next 10 years 60% of capacity will be from Non-GEO HTS Constellations, and will see a significant shift in the Orbits & Architectures of capacity which is available. 10

11 Price $/Mbps/Month Price $/MHZ/Month Price $/MHz/Month Capacity Prices Continue to Fall $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Mobility Ku-band - Price Index and Range- Q NAM LAM WEU CEEU MEA EA SA/SEA POR AOR IOR Source: NSR Mobility GEO-HTS - Price Index and Range- Q NAM LAM WEU CEEU MEA EA SA/SEA POR AOR IOR Source: NSR $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 Mobility: Global Mean Index Price $ e Mobility C ($/MHz/month) Mobility HTS ($/Mbps/month) Mobility Ku ($/MHz/month) Aero bulk capacity deals have major impact on broader satcom market Source: NSR 11

12 Building Blocks of a SATCOM Network Satellite Operators Launch and Operate Satellites in space, they are the owners of Satellite Capacity End-Users Cruise Ships, Airplanes, UAVs, Homes who require connectivity A Satellite in Space Service Providers Lease Satellite Capacity, they Integrate Hardware and Develop Connectivity Services for End-users A Remote Site to Connect A Shore-Side Location Connected to Internet 12

13 IFC Market Value Chain Operators More than 15 Growing aero capacity Service Providers 10 Major Players Highly competitive environment Airlines More than 70 One-third from Asia Number of players increasing across value chain, despite need for economies of scale 13

14 The Models are Changing- Vertically Integrated vs. Service Provider Model Service Provider Model Clear separation between the end-user and the satellite operator through the use of a service provider. Vertically-Integrated Model Satellite Operators move closer to end-users either through direct interaction or higher network management functions. End-user Requires Connectivity Service Provider manages end-to-end connection. Satellite Operator sells capacity to service providers. End-user Requires Connectivity Satellite Operators build a managed network offering to sell to End-users Service Providers may provide additional remote support and additional Value- Added Services 14

15 Battle of the Bands Ku vs. Ka-band Myths vs. Facts

16 Ku-band vs. Ka-band Ku-band Started in 1980s- replaced C-band for DTH and VSATs Has issues with rain fade in certain regions (availability is still greater than 90% globally) Orbital slot and frequency allocation becoming crowded Higher availability and more diversity Ku-band equipment can be certified and use up to 275 satellites (including inclined orbit) Optimization and better integration between modem, antenna and satellite is bringing greater efficiency (bit/hz) Ka-band Late 1990s (with ACTS), early in 2000s with Hughes (Spaceway) Ka-band is not just HTS (can be widebeam) & HTS is not only Ka-band (can be any frequency band) Has far more significant issues with rain fade in all regions Few(er) satellites with global coverage Higher number of smaller beams with higher throughput allowing for smaller terminals (in theory) Many Ka-band systems run on proprietary infrastructure/systems (Inmarsat, O3b, ViaSat) 16

17 HTS- What it Is & Is Not What it is Ka-band HTS is mostly proprietary networks Primarily for fixed Broadband Access (consumer and enterprise) and then Mobility (maritime, aero, land, gov t/mil.) Can be Ku-band or C-band or any other frequency Global Xpress, Intelsat EPIC, Thor-7, ViaSat-1/-2/-3, SES-17 Less expensive on a per Mbps basis What it s not Ka-band only Full replacement for FSS networks Better than FSS for certain applications Less expensive for all applications (eg. Low volume mobile data user) A silver bullet for all end-user applications (eg. video) Better throughput Enables smaller terminals Better throughput available everywhere in all frequencies The only way to enable smaller terminals Source: NSR 17

18 Aero Providers Use Wide Variety of Bandwidth Service Providers Capabilities & Offerings Service Providers Own Satellite ATG Ku-Band Ka-Band L-Band *Inclined orbit satellite GEE X* X X GoGo X* X X X X Inmarsat X X X X Panasonic Avionics X X X Rockwell Collins X X X SITAONAIR X X SmartSky Networks Taqnia Space X Thales X X ViaSat X X X X The IFC services providers all offer managed services and a diverse portfolio of capacity types, only a few own satellites, and they are the most vertically-integrated. X Source: NSR 18

19 Key Issues to Consider SLAs, SLAs, SLAs Business Models Issues with Onboard IFC Equipment

20 What REALLY Matters? Hot Topics Very Important Maybe Important Not Important Spectral efficiency between Ku and Ka? X Open vs closed Network Designs X Antenna issues/certification X Roaming in Ku-band (can use HTS and FSS) vs Kaband X Do you actually care what frequency you use? It s the SLA that Matters! 20

21 SLAs, SLAs, SLAs Practice and Contract Terms RFP Sets parameters required/desired in SLAs and Terms for Contract Level of detail still loose to enable a large swath of suppliers with different solutions to bid Proposal Indicates compliance with SLA requirements and acceptable T&Cs for contracts Provides some degree of SLA details Generalities: Definitions, responsabilities, management of SLA, mesured parameters, acronyms, coming into force, etc. API is the big thing so more of these are appearing in proposals to monitor overall network performance Contract Negotiation to finalize SLA terms and Contract T&Cs Usually a lot of «back & forth» during the negotiations Key satellite KPIs : throughput (down/up), availability, latency, coverage 21

22 Business Models: Money Maker or Experience Enhancer? IFC Business Models Market Share Retail 50% Hybrid 4% Airline- Directed 46% 100% 80% 60% IFC Business Model Market Share by Region 40% Source: NSR The retail model is the most used currently with 50% of airlines applying it. 20% Similar to JetBlue s hybrid model, a few airlines in North America and Asia have adopted a mix of paid and free (sponsored) IFC across their fleets. 0% NAM EU LAM MEA Asia Airline-Directed Retail Hybrid Source: NSR 22

23 Issues with Onboard IFEC Equipment Radome Leaks Troubleshooting Outages Terminal Weight IFEC Equipment Issues Bird-strike Challenges Installation Time Fleet Standardization 23

24 Anticipating Game Changers Lessons Learned from Cruise Industry Satellite Constellations FPAs

25 Ships and Planes Compete for Same Capacity Source: ESA Source: maritimetraffic.com Aero-Heavy Area Satellite Capacity among largest expense for Service Providers Maritime- Heavy Area Service providers are leveraging overlapping traffic patterns and are looking at both markets to improve their bottom lines 25

26 Maritime Cruise Shattering Record throughput levels. Focused on delivering an experience to the personal device (and application) Becoming more savvy around SATCOM (relationships with antenna manufacturers, hiring satcom experts, creating holistic experiences around connectivity.) 6/ Mbps 12/ Mbps 2/18 ~2.3 Gbps 5/18 ~3.2 Gbps 26

27 SLAs, SLAs, SLAs- The Cruise Example Cruise Ship Company Fleet-wide ships connectivity to/from shore Near global coverage with high regional/seasonal demand in Carribean, Alaska, Meditteranean, S.E. Asia. SLA terms: APIs to assist in SLAs monitoring and control Access to APIs (levels of transparency such as visibility in vendors netflow system) Voice and video connectivity bandwidth services Roundtrip Latency <600 ms. Bidirectional Jitter below 30ms Packet Loss (usually less than 0.1%). Ability to enable/disable TCP acceleration. Availability (end-to-end, bandwidth pooling), committed/maximum information rates, outages Process, procedures to detect/identify interference Support (ticket system, help desk mgmt, repair, spares) Remedies and compensation for SLA non-adherence 27

28 HTS & Constellations: History Satellite/ Program WildBlue-1, Spaceway-3 O3b Constellation HTS Communications Satellite Fleets and Constellations List Date Details Total HTS Capacity Introduction of Consumer Broadband centric satellites in the US First Non-GEO HTS Satellite Constellation Launches. Inmarsat 2016/17 Ka-band GEO-HTS designed for mobile satellite communications 10 Gbps 160 Gbps I5-F4:13.5 Gbps Intelsat s EpicNG Hybrid FSS/HTS satellite program from Intelsat. Other operators follow-suit with hybrid satellite designs. SES Hybrid FSS/DTH/HTS design programs OneWeb Next Likely Non-GEO HTS, although 2018 launch date has likely slipped into IS-29e: 24 Gbps IS-33e: 23 Gbps SES-12: 35 Gbps SES-15: 25 Gbps SES-14: 30 Gbps 5 + Tbps Source: NSR, Operators

29 Constellations in Development- More Until 2026 More constellations, many with higher capacity, longer life and multimode capabilities for new applications

30 Non-GEO Constellations- The List Grows Planned Non-GEO Communications Constellations Company Orbit Throughput # of Satellites Helios Wire LEO Very Low 30 Sky & Space Global LEO Low 200 Kepler LEO Medium 140 OneWeb/Intelsat LEO/MEO High 720-2,720 SpaceX LEO/vLEO High 1,600-11,943 LeoSat LEO Very High KasKilo LEO Medium 288 ViaSat MEO High / Very High 24 Telesat LEO Very High O3b Networks MEO Very High 48 Boeing LEO Medium 147-3,103 Samsung LEO - 4,600 Astrome Technologies LEO Xinwei LEO - 32 Yaliny LEO CAST LEO - 60 Lucky Star LEO Astrocast LEO - 64 Laser Light MEO High / Very High 12 30

31 Constellations- The Main Contenders LeoSat Telesat OneWeb SpaceX Starlink SES mpower Orbit LEO LEO LEO LEO MEO No. of Satellites* Satellite Mass (Kg)** End-User Spectral Bands spares spares spares 4, , *** ,200 Ka-band Ka-band Ku-band Ku-/Ka-band Ka-band *To be launched **Dry mass ***For demo but higher mass expected for operational satellites Both Announced Aero Plans Source: NSR 31

32 Challenges to Constellation Deployment Financing: baseline costs for constellation deployment are $2.5B, with many expected to cost much more. As seen with prior projects, cost overruns are likely and ongoing capital will be required to maintain the systems. Ground Terminal: a low footprint, low cost terminal capable of tracking and signal handoff is a cornerstone of proposed business models and does not yet exist in the market. Landing Rights: Each constellation needs to go through unique, country-specific process for every nation they want to provide connectivity a nearly impossible and time consuming task. Regulatory Access (ITU): Despite many API filings with the ITU, it remains a question whether projects can deploy within the deadline and coordinate interference with GEO players. Manufacturing: While satellite construction itself is not a key risk, the need to establish new manufacturing facilities and processes to increase production rates by two orders of magnitude is a challenge. Potential Market: The high market elasticity for broadband and backhaul that forms a premise of several constellations business case may not materialize, particularly within the payback periods expected. Competition: Terrestrial infrastructure, high altitude platforms, and GEO HTS systems continue to present alternative solutions that may be deployed on shorter timelines, lower costs, or for lower service prices. 32

33 Flat Panel Antennas- Key Performance Indicators Network Attributes GEO/MEO/LEO RF Attributes Power Density Efficiency Attributes Frequency Type Satcom/5G Hybrid Beam Width Beam Scanning Instantaneous Bandwidth Power Spectral Density Bits/Hz Delivered Physical Attributes C-SWaP Scalability/Modularity Source: NSR 33

34 FPAs- Who is Ready? Early Stage These companies are at early stage of their development, involved with technology R&D, and fund-raising Getting There NSR considers the following FPA manufacturing companies to be marketready soon Mature Technology The following FPA manufacturing companies are at the highest TRL, and have product currently on the market Performance of FPA depends on a systems approach to include especially the satellite modem and the satellite transmit EIRP Source: NSR 34

35 2027 Land- Mobile Maritime Consumer Broadband Enterprise Broadband Backhaul 2017 Land-Mobile Maritime Flat Panel Antennas- Aero is BIG Driver Aeronautical = $310 M 90% of Shipped Terminals for Broadband Access + Backhaul over next ten years, yet only 30% of Revenues. DTH Aeronautical = $975 M By the Markets: Commercial aviation expected to generate the lion s share of revenues Expectations for in-flight connectivity, plus need for a low-profile drive FPA adoption here Ku-band FPAs to maintain edge, 51% by 2026, due to early-mover advantage and better ground equipment ecosystem DTH 35

36 Bottom Line

37 Aero Connectivity in the Future Key Considerations Develop a comprehensive strategy around the "connectivity experience Satellite technology is changing faster than ever - but, don't let tomorrow's 'wiz-bang tech' stop you from executing strategy today. SLAs matter - for both pricing and experience. Continue developing deeper relationships with Satellite Industry - clear communications across all aspects value-chain only improves (your) product. 37

38 Contact NSR Thank Northern Sky Research, LLC One Mifflin Place, Suite 400 Cambridge, MA (617)