Satellite Broadband: Bridging The Digital Divide

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Although satellite broadband is mainly being touted as a consumer product to provide broadband in under-served areas, Hughes is taking a much broader view. According to Britton, the latency issue does not rule out satellite broadband being used within enterprises.

“I think the VNO [Virtual Network Operator] resellers that Avanti is signing are probably going to be looking at it as not-spot support, either long-term or short-term or infill. But I think for me and Hughes, I’ll be looking at it from a small to medium enterprise-type product offering, to enhance and grow those sectors,” said Britton.

“My focus will be on the business units. They are ideal for the sort of places where people hotdesk and all they want is Internet, but if they’re designing aircraft carriers they need to get back to the city where there’s glass fibre. But I think it will transcend quite nicely into small and medium-sized enterprises,” he added.

Enterprise and backhaul

Hughes already offers broadband solutions and managed services in North America, under the brand HughesNet, which gets a third of its revenues from SMEs. Unlike in Europe, Hughes has a vertically integrated business model in the US, in which it owns the satellite as well as the routes to market, allowing it to act more like a traditional Internet service provider.

“I don’t see there’s any reason why, in your BP garage, you couldn’t provide broadband along with a cup of coffee. I think it works for enterprises as well,” said Britton. “Where it doesn’t work for enterprise is you doing huge amounts of data transfer to data centres in Peru. It’s just not that. But it’s very good at the access layer, and it’s very good for broadband access.”

Satellite is also very good for dealing with backhaul, according to Britton. This allows users to access the Internet in the normal way using fibre or Wi-Fi, and then backhaul data to the Internet using the satellite. “It’s like an enabler rather than a product in its own right,” he said.

Hughes is confident enough in the future of satellite broadband in Europe that is has already signed a contract to provide ground equipment for the HYLAS 2, due to launch next year. The HYLAS 2 has a larger footprint covering Europe, North Africa and parts of the Middle East, and will provide satellite broadband to up to 30 million households.

Meanwhile, the Ka-SAT satellite was successfully lifted into orbit at the end of 2010. The ground network will use ViaSat’s SurfBeam technology, offering Eutelsat’s Tooway consumer broadband service with speeds of up to 10Mbps.

Bridging the digital divide

According to Britton, satellite broadband is an integral component in closing the digital divide, and in helping the UK government fulfil its aim of rolling out 2Mbps broadband to all British homes by 2015.

“If you’re sitting where BT is sitting and they’ve got this requirement to provide this unified access by 2015, they’ve got to consider all technologies,” he said. “But what satellite doesn’t do is provide a complete solution. I think it’s part of the equation. It’s not everything to everybody, but it’s certainly part of the solution.”

In October 2010, the government pledged to invest £530 million to support the UK’s broadband network and to enable the roll out of superfast broadband in areas that the private sector would not otherwise reach. In America, the government has already invested $54 million in satellite terminal equipment to help close the digital divide, and Hughes is hoping that European governments will now consider moving in the same direction.

“In the UK, Avanti is part-funded by European money, but we don’t have any subsidies currently. Subsidies are provided individually, area by area, council by council,” said Britton.

“The difference with VSAT is you’ve got the terminal equipment and it’s quite expensive. So if you’re looking from a social point of view and you want to provide low-cost broadband to everybody, which is the real objective here, certain people in certain income brackets are not going to want to pay out £300 for a dish on the back of their house. But if they receive a subsidy for it then clearly they would welcome that.”