Procurement of a Satellite Service

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1 Procurement of a Satellite Service

2 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz Procuring a Satellite Service Cost Structure of a Satellite Network Comparison of Different Satellite Networks Not All Satellites Perform Equally

3 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz Procuring a Satellite Service Cost Structure of a Satellite Network Comparison of Different Satellite Networks Not All Satellites Perform Equally

4 Which Network is Best for My Network? Service Level Elements The most commonly discussed Service Level elements are those at the IP Layer: Committed Information Rate (CIR) Burstable Information Rate (BIR) Oversubscription Ratio (??) Quality of Service (??) The common Service Level Elements can be met only if the following are ensured: Latency Bit Error Rate (BER) Availability What is a 1Mbps Service?? 1Mbps dedicated outbound, 1Mpbs dedicated inbound?? 1Mbps dedicated outbound, 256kbps dedicated inbound?? 1Mbps shared (5:1) outbound with 256kbps CIR, 256kbps shared (5:1) inbound with 32kbps CIR??

5 Which Network is Best for My Network? Service Level Elements Latency Bit Error Rate (BER) Availability Optimizing The Satellite Link sufficient margins must be included to ensure link integrity

6 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz

7 Which Network is Best for My Network? Satellite Network Technology Options 1/4 Necessary Inputs to Determine Proper Solution Satellite Frequency Band Hub Antenna Size Hub Location Remote Antenna Size Remote Locations Service Level Latency, Jitter, etc. Availability, Downtime, etc. Voice Traffic Number of VoIP Lines % Usage on Average % Usage Maximum Data Traffic CIR BIR Oversubscription Ratio Video Traffic Quality

8 Which Network is Best for My Network? Satellite Network Technology Options 2/4 Hub-based shared mechanism (Statistical Multiplexing) Timing references, burst guard band etc to remotes creates overhead TDM / TDMA DVB, DVB-S2 IP Packet Switching over an MCPC Carrier Single Channel per Carrier (SCPC) Non-contended Capacity per site All bursts are traffic, one after another not overhead TDM/MF-SCPC

9 Which Network is Best for My Network? Satellite Network Technology Options 3/4 Advantage Dedicated bandwidth for each remote inbound Provides superior Quality of Service for mission critical applications Low Latency and Low Jitter Disadvantage Each remote requires its own space segment Expensive OPEX if each remote bandwidth is not fully utilized SCPC modems typically more expensive than TDMA modems Best transmission method for real-time applications, voice, data, video, broadcast, etc. Fixed data rates on the inbound links TDM/MF-SCPC Model

10 Which Network is Best for My Network? Satellite Network Technology Options 4/4 Advantage Sharing of satellite bandwidth Disadvantage High Latency and Increased Jitter Lower overall OPEX compared to dedicated pipes Good for low data rate applications Low cost remotes Demanding remotes can burden the system Fragmentation of packets. Less effective for voice and video Expensive hub equipment Large population of users All remotes must be designed around worst case link TDM/MF-TDMA Model

11 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz Procuring a Satellite Service Cost Structure of a Satellite Network Comparison of Different Satellite Networks Not All Satellites Perform Equally

12 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 1/11 Operating Expenses (OPEX) Satellite space segment Teleport operations Licensing Capital Expenses (CAPEX) Hardware Antenna, RF, HPA, Converters, Modem etc. Routers Switching equipment etc. Logistical Challenges Transport, Duties, Taxes etc Operating Expenses Operations & Maintenance Transmission OPEX Capital Expenses Network Equipment Site Equipment Site Rental Power Spares/Support Training Transmission Equipment Civil Works Network Operations + Depreciation Total Cost of Ownership

13 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 2/11 Satellite Segment New Satellites bring better peformance Better Modulation and Forward Error Correction Techniques Teleport operations Remote login options VNO Options Licensing OPEX COSTS Liberalisation of Markets reduces the licensing fees

14 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 3/11 Two models of hub hardware cost assignment Per project Over multiple projects Hub platform costs can introduce barriers to entry Entry Level Hubs introduced to reduce barrier Virtual Network Operator (VNO) concept Growth costs must also be considered Function of how many end customers a starter kit can support Equipment re-use CAPEX (Hub Hardware) Some platforms use the same hardware for hub and remote

15 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 4/11 CAPEX (Remote Hardware) Remote costs can be large part of the total cost of a network Portion of TCO grows with the size of the network Indoor Kit Low-cost TDMA/DVB-RCS Indoor Units (IDUs) have dropped in price to $1,000 SCPC modems $6,000+ Outdoor Kit Antenna and ODU sizing based on either shared carrier size or dedicated carrier size Logistical Challenges Shipping and installation in remote area

16 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 5/11 Two different data rates are important when sizing a TDMA network IP Rate IP Rate is the actual IP throughput including IP headers and data at Layer 3 of the OSI model Represents actual LAN traffic on both remote and hub LANs Information Rate Information Rate is the actual Layer 2 information, including TDMA framing overhead, sent over the satellite Link budgets must account for Information Rate, not IP Rate Different TDMA platforms have different IP Rate / Information Rate ratios Depends on TDMA satellite access method aloha, slotted aloha, deterministic, selective, etc.

17 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 6/11 Modulation FEC Layer 2 O/H Data Mbps Data Actual Information Layer 2 O/H Control Addressing * Guard Band * Reference Bursts * FEC Added Redundancy Modulation Number of Bits/Hz Mbps vs. MHz

18 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 7/11 Modulation FEC Layer 2 O/H Service REVENUE based upon IP Rate in Mbps Main OPEX cost based upon total MHz required Data Mbps An end user s service level requirements and per-site price points will determine what realistic margins may be achievable Mbps vs. MHz Revenue and Cost Bases

19 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 8/11 Spectral Efficiency vs. Eb/No Advances in technology brings us closer to the theoretical limit Mix of bandwidth and power: The industry is driving for the best spectral efficiency at the lowest Eb/No level.

20 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 9/11 Bandwidth vs. Power Allocated BW Portion of transponder actually used Linear function of modulation and FEC Decreases with higher order mods and FECs Bandwidth Limited links have greater allocated BW than PEB Power Equivalent BW Fraction of transponder power required to close link Complicated function of hub antenna, remote antenna and satellite specifics along with required Eb/No Increases with higher order mods and FECs Power Limited links have greater PEB than Allocated

21 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 9/11 Bandwidth vs. Power 16QAM 7/8 16QAM 3/4 8PSK 5/6 8PSK 2/3 QPSK 1/2 = 100% QPSK 7/8 QPSK 3/4 QPSK 1/ Relative Bandwidth (%) for same data rate

22 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 10/11 Forward Error Correction Advances in FEC can offer 3-5 db of performance over currently used methods 3 db of Coding Gain can: Reduce required bandwidth by 50% (OPEX) Increase data throughput by a factor of 2 (OPEX) Reduce antenna size by 30% (CAPEX) Reduce transmitter power by a factor of 2 (CAPEX) Provides more link margin (Service Level) What to look out for is Latency (Translates to Service Level) Eb/No Required (Translates to power; CAPEX) Bandwidth (Translates to allocated capacity on satellite; OPEX)

23 Which Network is Best for My Network? Total Cost of Ownership (OPEX Vs CAPEX) 11/11 Turbo Product Coding (TPC) Iterative decoding process produces a likelihood and confidence level measure for each bit Low latency (vs. TCC, Vit/RS) Due to the fact that there is no need to buffer for interleaving Turbo Product Coding Lower Eb/No requires less power Higher efficiency requires less bandwidth Viterbi / RS Low Density Parity Check (LDPC) Basis of new DVB-S2 standard Third-class of Turbo Code Turbo Product Coding (TPC) Turbo Convolutional Coding (TCC) Iteratively decoded block code Performs 0.7 db 1.2 db better than TPC at low FEC rates (3/4 and below) While coding gain is greater, processing delay can be an issue TPC Less BW Less Power

24 So Which Solution is Best?? 1/2 TDM / MF - SCPC TDM / MF-TDMA

25 So Which Solution is Best?? 2/2 Satellite Frequency Band Hub Antenna Size Hub Location Remote Antenna Size Remote Locations Service Level Latency, Jitter Availability, Downtime Voice Traffic Number of VoIP Lines % Usage on Average % Usage Maximum Data Traffic CIR BIR Oversubscription Ratio Video Traffic Quality only with this information can one determine the best option

26 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz Procuring a Satellite Service Cost Structure of a Satellite Network Comparison of Different Satellite Networks Not All Satellites Perform Equally

27 Procurement & Logistics Space Segment, Satellite Equipment Procure the correct beam Spot, Zone, Hemi or Zone beam for business requirement Procure Satellite Equipment according the linkbudget and business requirement Registration with local authorities Register the frequency and equipment with local authorities Logistics around equipment shipping and installation Find logistical solution to the deployment of the remote terminals

28 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz Procuring a Satellite Service Cost Structure of a Satellite Network Comparison of Different Satellite Networks Not All Satellites Perform Equally

29 Procuring a Satellite Service: The Full Story Alpha and Beta are competing Mobile Network Operators. They both need satellite connectivity to support their operations. However, they have a very different procurement approach. Alpha Beta 1. Selects the satellite operator which has the lowest price per MHz. 2. Then, buys the cheapest equipment available on the market. 3. Doesn t fully take into account future requirements in terms of equipment, coverage and bandwidth. 1. Designs the satellite network taking into consideration equipment and bandwidth requirements. 2. Performs a Total Cost of Ownership analysis including CAPEX and OPEX. 3. Considers future requirements to select an effective invest-asyou-grow solution. 4. Trains in-house satellite experts to keep optimizing the network

30 Procuring a Satellite Service: The Full Story What could be the consequences of the two different approaches? An initial cheap design may prove to be more expensive over time: Company Alpha may need to invest more than Beta to expand the network With limitations of ground equipment, bandwidth-saving techniques can hardly be implemented. Possible lower performance Service availability, satellite performance, technical support, matter. Always compare apples with apples!

31 Procuring a Satellite Service: The Full Story Example with Alpha and Beta s respective services : Alpha Beta Information Rate 10 x 1 Mbps 10 x 1 Mbps Efficiency 1.6 bps/hz 2.8 bps/hz Required bandwidth 6.25 MHz 3.57 MHz Price $/MHz 2,000 $/MHz* 2,500 $/MHz* Bandwidth MRC 12,500 $/month 8,929 $/month Equipment investment 100,000 $* 180,000 $* Contract length 36 months 36 months Total Cost of Ownership 550,000 $ 501,429 $ Equipment feature Entry-level modems, Modcod 8PSK 3/4, Roll-off factor 40% Advanced modems with Carrier Cancellation Technique and ACM, Modcod QPSK 7/8, Roll-off 25% Satellite performance C-band global beam low EIRP C-band zone beam high EIRP * Indicative figures

32 Procuring a Satellite Service: The Full Story In addition to saving more money despite a higher initial investment: Beta s service reaches virtually 100% availability thanks to ACM (Adaptive Coding and Modulation) Beta will require less bandwidth to increase the data rates, compared to Alpha easier growth Beta is more competitive in the market since its cost per Mbps is about 30% lower than Alpha s With the high performance satellite used by Beta, additional low-cost sites can be easily deployed with smaller antennas and less power.

33 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz Procuring a Satellite Service Cost Structure of a Satellite Network Comparison of Different Satellite Networks Not All Satellites Perform Equally

34 The Cost Structure of a Satellite Network As seen in the previous example, several parameters must be considered Equipment: Antenna size BUC size Modem capabilities Network topology: Star or Mesh Satellite bandwidth: Performance of the satellite Type of coverage: global, hemispheric, zone or spot beam Dedicated or shared bandwidth Other: license fees, installation, maintenance, international shipment, The performance requirements can significantly impact the network design thus the overall cost. Define them sensibly and be ready for tradeoffs! The good design of a network will consider the investment and recurring costs required to meet the requirements, while taking into consideration scalability.

35 The Cost Structure of a Satellite Network A link budget report typically provides information that help assessing the cost of the solution Required Carrier Information Required Transponder (depends on modem capabilities) Bandwidth Power (PEB) Designed Link Availability Satellite and transponde information Antenna size and required BUC power

36 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz Procuring a Satellite Service Cost Structure of a Satellite Network Comparison of Different Satellite Networks Not All Satellites Perform Equally

37 Dedicated SCPC Links SCPC = Single Channel Per Carrier Typically used for point-to-point links with dedicated bandwidth Example of a network: Hub to Remote 1: 2 Mbps Hub to Remote 2: 2 Mbps Remotes to Hub: 1 Mbps each All sites have a 2.4m antenna and entry-level modems. For 99.96% availability 6.8 MHz are required for the total network Efficiency is only 0.88 bps/hz

38 Improving Efficiency with Better Equipment Same network as previously, but with different hardware configuration Antenna sizes Now, if the requirements are modified a bit: Modems Bandwidth Efficiency Initial network 2.4m Entry-level 6.8 MHz 0.88 bps/hz Larger antennas 3.7m Entry-level 4.8 MHz 1.25 bps/hz Lower roll-off factor Carrier Cancellation Technique 3.7m Advanced 4.3 MHz 1.40 bps/hz 3.7m Advanced with CCT Using Adaptive Coding and Modulation (ACM) and Carrier Cancellation Technique Maximum throughput 2 Mbps /1 Mbps (95% of the time) Minimum throughput 1.6 Mbps /0.94 Mbps Required bandwidth is 2.4 MHz and efficiency is 2.5 bps/hz 2.9 MHz 2.07 bps/hz

39 Improving Efficiency with Better Equipment As seen in previous examples, using better equipment leads to higher efficiencies thus lower recurring costs. However: Only a Total Cost of Ownership (TCO) analysis can determine whether the investment on hardware is worth the bandwidth savings The size of the network, the required bandwidth and possible savings must be taken into consideration.

40 Agenda Which Network is Best for My Network? Service Level Discussion Satellite Network Technology Options Total Cost of Ownership (OPEX Vs CAPEX) Procurement & Logistics Space Segment, Satellite Equipment Registration with local authorities Logistics around equipment shipping and installation Satellite Economics Beyond the Cost per MHz Procuring a Satellite Service Cost Structure of a Satellite Network Comparison of Different Satellite Networks Not All Satellites Perform Equally

41 Not All Satellites Perform Equally The efficiency that can be achieved for a given satellite link also depends on the characteristics of the satellite and transponder: Power density and G/T The cost/mhz will typically vary Beam coverage: in function of The wider the beam, the larger the service area can be, but these parameters Wider beams (especially global beams) typically have lower power density Note that some satellite operators only have global C-band beams for services in Africa Elevation angle: preferably above 20 degrees Available capacity Intelsat s Epic NG satellites represent a major step forward: High throughput, increased power density, flexibility, vendor-agnostic, etc.

42 Not All Satellites Perform Equally What about Ka-band? 1/2 Ka-band is more susceptible to rain attenuation Ka-band Ku-band Legend: Link Margin required for 99.6% availability > 18 db

43 Not All Satellites Perform Equally What about Ka-band? 2/2 Most Ka-band spot beams are smaller than Ku-band beams: more beams required to cover an area In an attempt to cover the globe, some operators are stretching their beams, which reduces their power and efficiency A few myths on Ka-band: Higher frequencies provide higher throughput Myth: There is nothing fundamental in a frequency band which supports higher throughput Ka-band is more cost-effective because it allows us of smaller antennas Myth: Higher frequencies result in greater path loss between the antenna and the satellite, which nullifies the increase in antenna performance. For similar link performance, larger Ka-band terminals are required Attenuation mitigating techniques can compensate Ka-band rain fade Myth: There is a limit of how much rain fade ACM and UPC can address and these techniques are unlikely to be fully able to compensate for Ka-band rain fade. High Throughput Satellites (HTS) are Ka-band satellites Myth: An HTS satellite is one that uses significant frequency reuse techniques to multiply the effective throughput capacity of the satellite. Epic NG HTS satellites use C-, Ku- and Kabands.

44 Sharing Resources for Better Cost Efficiency Dedicated SCPC links are well-suited to: Connections that need to be up all the time Traffic patterns that do not have dynamic variations Sharing resources: Satellite bandwidth Modulators and demodulators hub cards Solutions with shared resources are preferable when: Network is large with a central hub: avoid having multiple modems at hub Traffic demand is dynamic and varies within the network

45 Sharing Resources for Better Cost Efficiency Typical configuration: Central hub with one or several modulator and demodulator cards Remote sites equipped with modems and possibly DVB receivers Shared outbound carrier (from hub to remotes), typically DVB-S2 Dedicated or shared inbound carriers (from remotes to hub): TDMA, MF-TDMA, dscpc, Mx-DMA Most equipment manufacturers have such solutions: Comtech Heights, Newtec Dialog, idirect Flex, Gilat SkyEdge, etc. Intelsat offers solutions based on Newtec and idirect hub equipment

46 Satellite Brings Benefits to Your Business Satellite technology should not be seen as last resort. It offers: Unmatched reliability Very high availability Short service implementation time in remote areas Wide coverage Easy point-to-multipoint communications Good value for money with state-of-the-art technology Opportunities for growth in untapped rural markets And so much more

47 Conclusion Do not focus solely on unit prices for satellite capacity Always ask: What is the satellite performance? What equipment takes full benefit of the satellite capacity? What network topology do I need for the service? What efficiency can I reach? What is the Total Cost of Ownership? What support can I get from the satellite operator? What revenues and benefits can I drive from this service?

48 Thank you! Questions?

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