Northern Sky Research

HTS Beyond Broadband

Feb 13th, 2012

Given the recent emphasis placed on High Throughput Satellites (HTS) as an essential element of competitive satellite broadband access service, it should come as no surprise that many people only think of HTS within the context of this service. Yet, the industry is rapidly evolving, and individuals are more and more opening their eyes to other possible applications and revenue streams for HTS capacity.

A perfect illustration of this came in December 2011 when Eutelsat reported that mobile facilities company Jackshoot was the first to deliver TV rushes over its KA-SAT satellite for the UK’s Channel 4 “Live and Lost with Blackberry” program. Even NSR recognizes that this contract was but a drop in the bucket when compared to the total capacity on the KA-SAT. Still, drops add up over time, and NSR can see additional growth avenues in other services beyond contribution & occasional use on KA-SAT and other HTS including corporate VSAT, backhaul, commercial mobility, gov/mil services, and even potential for DTH and video distribution.

Satellite broadband access will dominate the use of capacity on the growing number of HTS entering the market in the coming years and account for nearly 90% of the expected leased HTS capacity forecast for 2020 in NSR’s recent “Global Assessment of Satellite Supply & Demand, 8th Edition” study. Still, as illustrated in the above chart and by the first announcements like the one for Jackshoot, there is real demand for HTS capacity in other applications. NSR projects that these first drops will grow into a steady stream in the coming ten years. Just as important, NSR believes that these other applications will generate much higher revenues per leased bit than broadband access services. While NSR estimates that only about 10% of the global base of leased HTS capacity in 2020 will be used for non-broadband access services, these same applications will likely account for 40 to 50% of the revenues generated on HTS capacity.

Bottom Line
For services like Tooway, WildBlue and HughesNet to be successful in the consumer world, they are moving rapidly to a “volumes” business where the key underlying business proposition is as low cost capacity as possible. Satellite broadband access will generate by far the largest volume of demand for HTS capacity in the coming ten years. Yet HTS capacity will increasingly be used to provision of other, non-broadband access applications. Lower cost capacity here will be important as well, though these services also bring more value to the end user and can be priced accordingly. In the coming months and years, NSR fully expects that there will be a steady drip, drip, drip of new and exciting uses of HTS capacity and, before anyone realizes it, this will accumulate into a roaring stream of revenues.