HTS expanding, say experts

Two new studies have examined the prospects for High Throughput Satellites (HTS). Euroconsult and Northern Sky Research have both been busy examining the potential for HTS in all of its guises.

According to Euroconsult’s latest report on HTS, 33 of these new craft will be launched between 2014 and 2016, a record high compared to the total 31 HTS systems that were launched over the past 10 years. Euroconsult says the growing popularity of HTS systems will bring the total cumulative investment to over $12 billion.

New HTS craft from the likes of Intelsat, Telenor and SES’ stake in O3b, will add to the bandwidth availability. Despite the fact that HTS systems have become a global trend, satellite operators have employed a variety of system architectures, in terms of size, coverage, frequency band, platform access and payload flexibility. “HTS systems will not be a ‘one-size- fits-all’ solution but are designed to the meet the specific needs of the targeted vertical market,” said Nathan de Ruiter, senior consultant at Euroconsult.

As a result of the large investments made by satellite operators, global HTS capacity supply is projected to nearly triple over the next three years to reach 1,400 Gbps in 2016. However, HTS capacity available to a single end-user in a given vertical market will not increase to the same extent as the available beam capacity differs between HTS systems.

The multiplication of HTS systems over the coming years will unlock growth opportunities in all major market verticals with global demand for HTS capacity expected to grow from around 85 Gbps in 2013 to nearly 980 Gbps in 2022, a CAGR of more than 30 per cent over the period.

Euroconsult says “The need for HTS capacity is undeniably growing in a world that is more and more connected and increasingly data thirsty,” said de Ruiter. As a result, total revenues from HTS capacity usage are forecasted to grow to approximately $5.6 billion in 2022, generating over $33 billion in aggregate revenue between 2013 and 2022.

Specifically, Euroconsult’s highlights from the 50-page report, cite:

– Consumer Broadband will remain the largest vertical market representing nearly 60 per cent of total HTS capacity usage in 2022.

– Cellular Backhaul & Trunking and Civil Government & Enterprise Networks are growing at a similar pace of ~35 per cent p.a. over 2013-2022, with demand driven by emerging regions.

– HTS demand for Video Services is expected to grow to 46 Gbps in 2022, with the majority of traffic carried in North America and Europe.

– HTS usage in Commercial Aviation, Commercial Maritime and Milsatcom should see a gradual take-up starting in 2014 after the launch of HTS systems designed to serve these markets.

Northern Sky Research (NSR), in its latest study, reminds us that its 2009 report estimated that global HTS demand would reach about 190 Gbps in 2018 out of a worldwide supply of 425 Gbps. Now in its latest market size estimate in its latest report (Global Assessment of Satellite Supply & Demand), NSR projects that global HTS demand has expanded three-fold and will hit 451 Gbps in 2018 on a supply of 1.6 Tbps. And this is independent from the separate MEO-HTS market vertical – constellations such as O3b Networks – that could add another 67 Gbps of global demand on about 240 Gbps of MEO-HTS supply in 2018.

“What has changed in the last several years is the breath of applications and services that are now being targeted for HTS and MEO-HTS capacity”, notes Patrick French, NSR Senior Analyst and the report author. French adds that “however impressive the satellite industry’s rush to develop the HTS market, it is less the Gbps of demand that are important than the dollars in revenues that these new services are expected to generate.” The NSR study currently forecasts that global HTS and MEO-HTS revenues will hit $3.3 billion in wholesale capacity terms by 2022. “These are mainly net new revenues that will come from new services and applications addressable by HTS and MEO-HTS capacity rather than cannibalisation of existing C/Ku FSS services as some have feared,” stated French.

NSR says it has gone to great lengths to assess as granularly as possible how different types of HTS capacity are applicable to different market applications. Plus, the reality that not all HTS capacity will be priced the same means that revenue potential very much depends on the application as well as the regional market served. “A Mbps of HTS capacity sold for a global mobility service is priced very differently and brings a different value to the end client than a Mbps of HTS capacity used for a consumer broadband Internet access service” explained French.

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