Satellite backhaul, once seen as last resort, is finally taking off

With only three countries in South East Asia having an internet penetration of around 80%, there is a high demand for fast, reliable connectivity within Asia. In this part of the world, many individuals are currently living in remote, rural areas that are unable to afford unlimited and stable internet services.

As a result, satellite backhaul, which was often seen as a last resort, is once again becoming big business. Able to serve isolated communities, which require vital communication, innovation has made satellite backhaul a relatively low cost, risk-free way of providing critical connectivity. With Mobile Network Operators (MNOs) facing increasing saturation within their core markets, this new challenge is particularly appealing as a way of increasing revenue and boosting profitability.

Transformation takes place
It is technological innovation which is driving this popularity. Historically, backhaul has been viewed by operators as too unaffordable. With limitations including high installation costs for ground sites, and poor performance from craft which operated in high geosynchronous orbit, they did not see the point of satellites. It was only when regulations meant MNOs would be targeted with penalties for underserving certain areas, that satellite was used to meet service requirements.

However, a decade of transformation has caused this to change. In the last ten years, the industry has seen the creation of high-throughput satellites (HTS) which boosted the amount of capacity per satellite by working at the higher frequencies. Next came the development of all-HTS spacecraft which saw the first competitive satellite broadband service develop.

Further innovation saw the development of highly specialized satellites which added even more capacity into the sky. Additionally, the latest creation of very high-throughput satellites by Hughes, Eutelsat and Viasat will see at least an extra three terabytes of capacity when launched later this year.

On the ground, it is now possible for operators to install sites with cost-effective antennas, and equipment, and have base stations that can be powered by batteries or solar panels reducing the cost further. Not only that, but issues regarding rain fade have been overcome so HTS satellites can operate with a higher performance in areas with moderate rainfall.

An attractive prospect
With all these developments, it is no wonder the industry has taken notice and is starting to deploy satellite backhaul at a rapid pace, with a total revenue of USD 30 billion over the next decade. Research firm NSR predicts costs for large deployments have now fallen to an average of USD 3 per gigabyte, making the prospect a far more enticing one for MNOs, particularly in South East Asia where connectivity is needed now more than ever.

Thanks to these innovations and improved economics, there are now a range of new business cases in which backhaul makes good business sense for MNOs and supplies the much-needed coverage and internet services.

The author of this article is Danny Lee, Vice President Sales Asia, Speedcast and has been first published in Disruptive Asia