satellite broadband

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Satellite Broadband: Where now?Julian McGougan - Presentation to the Satellite Terminals Working Group18th August 2016

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The UK connectivity landscape2010 2015

Coverage of broadband at 2Mbit/s

86% c100%

Coverage of superfast broadband – 30Mbit/s

58% 83%

3G premises coverage by all operators

72% 88%

4G Coverage by all operators

0% 46%

3G land area coverage served by all operators

13% 37%

Average fixed download sync speed

7.5 Mbit/s 28 Mbit/s

Average monthly data usage per residential connection

17GB 82GB

Average mobile monthly data usage per SIM

0.24 GB 0.87GB


The Government’s priorities for the future

• Superfast to ‘near universal’• 100Mbit/s available to nearly all UK Premises• Introduction of a 10Mbit/s Universal Service

Obligation (USO)• Which socially beneficial services determine the

minimum downlink speed?• Who pays for this? And how?

• 4G to 98% population coverage• 90% geographic voice coverage• 70% of rail passengers to have access to free WiFi

• Reducing the number of people offline to under 10%• Getting more SMEs online


Fixed broadband sets the pace

• 10m fibre and cable connections. BT reported that 48% of its customers were on fibre products in Q4 2015.

• The number of superfast (>30Mbit/s) broadband connections rose by 2 million (28.7%) to 9.2 million. Just 2% of the UK has access to FTTP.

• BT plans to bring ultrafast broadband to 12 million homes and businesses by 2020, 2million of which will be connected using fibre to the premise (FTTP) technology.


Speed isn’t everything, but…

…but it is what prospective customers, the media & politicians focus on.

• Average UK fixed broadband download speed was 28.9Mbit/s in November 2015, up from 22.8Mbit/s (+26.9% YOY).

• But actual fixed broadband speeds are frequently lower than advertised speeds. 2.4 million households are unable to receive access line speeds of 10Mbit/s.


Mobile broadband reaches more consumers

• By the end of 2015, mobile subscriptions increased to 91.5 million, of which 39.5 million were 4G - an increase of 15.9 million (67.3%) YOY.

• The proportion of business calls that originated on mobile networks was 56.2%.


And mobile coverage keeps improving

• Mobile operators required to provide voice coverage across 90% of the UK’s landmass by the end of 2017.

• Separately O2 required to provide indoor 4G connectivity to at least 98% (outdoor equivalent >99%) population by 2017.

• EE has pledged to boost their 4G coverage to 95% geographic by 2020, taking broadband to areas that don’t even have 2G.

• c15% of residential premises have no active landline.

• But mobile coverage obligations are focussed on residential connectivity, ignoring road, rail, businesses, shopping areas, schools.


Mobile now offers the speed which a few years ago only fixed could offer

Average 4G download speed measured for Ofcom in Cardiff, Edinburgh, Liverpool, London and Norwich.

With 5G yet to come…


5G

5G likely to be deployed 2020-22.But will the poor returns from operating UK mobile networks justify the necessary investment?

Additionally delivering 5G will be a significant practical challenge:• >1 million small cells will be required to roll out 5G across the UK and

the upgrading of equipment at existing sited.• This will require deployment on a scale not seen before in the UK.• Many other major countries will be attempting to do the same in a

similar timeframe.

5G deployment will require: • developing the skills and the people to roll out the infrastructure at

scale • ensuring that the equipment and other parts of the supply chain are

scaled up and prepared for the delivery challenge.


The story of fixed & mobile broadband is that consumers demand more data as downlink speed increases

• EE states that in 2012, their subscribers’ average monthly data usage was 400Mb/month. Now it’s 2Gb.

• What’s satellite’s?


So what is satellite broadband’s target market?

How well could satellite compete with fixed or mobile?• HCS is a major development. Constellations may be, too.• Satellites/beams could be moved to address capacity

constraints.• MEO & LEO should reduce latency.• Monthly fee can be similar to that of 4G for similar data

cap.• But meeting current average fixed data use

expensive.• But how well is the satellite option marketed?

• Current Government voucher scheme receives only c400 requests/month. Why?


Without trying to compete with fixed or mobile:• Consumers who are unlikely ever to be offered

broadband by any other means• but do they know that? Need transparency from

Government?• Consumers who get slow and/or unreliable fixed

broadband• but they may be holding out for a “fibre answer”,

even if the fault is line length or internal wiring.• It’s very difficult to know the true length of your

line (some cabinets have been removed). Some rural consumers are connected (by long lines) directly to an exchange.

• Consumers who may get superfast sometime, but won’t or can’t wait.

• Rural business use, not targeted by BDUK.

So what is satellite broadband’s target market?


Could the Universal Service Obligation help?

• Broadband USO aims to provide a right to connectivity with download speeds of at least 10Mbit/s.

• Useful marketing to tap into.• 10Mbit/s is well within the capability of

satellite.• But is there a risk that the minimum speed

could be ratcheted up later?

• How much stimulated demand could be diverted to satellite?


Does Brexit offer an opportunity?

New Government wants to send signals that:• They’re going to make a success of Brexit• UK is open for business & receptive to FDI• Arguably ensuring the UK has World-class connectivity should

be part of that

With:• a Government more willing to be proactive• no/less need to clear everything with Brussels• (potentially) greater freedom on State Aids.

What could we achieve?And what could satellite broadband deliver?

satellite broadband

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