The coming wave of High Throughput Satellites (HTS) and O3b is leading to a market shift in the wireless backhaul via satellite market.  In fact, most legacy backhaul solutions running on classic C-band and Ku-band transponders will gradually be complemented and eventually replaced by next-generation HTS/O3b solutions.  In terms of ground equipment, the two dominant platforms - SCPC and TDMA – will be battling for future market share on both O3b and HTS systems, and here, the competition appears to be well under way.

Given the exponential growth of bandwidth provisioned for HTS systems and O3b (versus legacy capacity), the question arises - are current TDMA/SCPC platforms capable of serving ever-growing backhaul needs over this new capacity?  It would appear the answer is a resounding yes for HTS systems for two reasons:

• First, HTS systems in other market segments such as direct Internet access or broadband access platforms already exist where existing technologies can be “upscaled” (so to speak) to serve high bandwidth traffic needs for backhaul.
• Second, announcements indicate that HTS platforms will be backwards compatible such that upgrades to existing legacy equipment may be all it takes to be next-generation-enabled. Such upgrades could include simply changing the BUC and LNB, and all the other equipment features remain the same.

For O3b, however, a platform evolution similar to HTS may not be as simple, at least for now. On the terminal side, technical adaptation is indeed achievable via upgrades or changing out a few key elements, but the antenna system in terms of technical implementation as well as bringing down the cost structure are initial challenges that remain for the O3b program.

Despite the HTS market being in the early to nascent phase, and despite O3b still at least a year from launch, VSAT vendors are lining up deals to support this new capacity.  For example, O3b recently announced a partnership with Comtech EF Data for a line of modems and hub systems, which will be able to repurpose existing Comtech hardware for use with the O3b system where backhaul is a core focus. This is an important feature as Comtech can leverage existing customers who may choose to shift to O3b but once again, issues on the antenna system will have to be resolved.

In the HTS arena, Harris CapRock announced they will utilize the Intelsat EpicNG HTS platform for advanced fixed and mobile services. iDirect is Harris Caprock’s technology partner and in NSR’s view, this could be leveraged for land-based markets such as wireless backhaul for future contracts with a host of HTS providers. More importantly, Intelsat is the largest provider of satellite-based wireless backhaul bandwidth in the globe such that migration of traffic from its legacy C-band and Ku-band transponders onto EpicNG will translate to large equipment orders and/or upgrades going forward. Early inroads onto EpicNG could mean a highly competitive market position over the long term.

iDirect likewise announced in June that Bentley Walker Ltd. purchased a Universal 15000 series hub to enhance the company’s satellite service offerings in Iraq and Afghanistan where the new hub will be running on Avanti’s Ka-band HYLAS 2 (HTS) satellite. This should advance iDirect’s market position regionally. Finally, it is worth noting that iDirect launched the SCPC Return Channel technology available through its iDX 3.0 software in 2011, which enables service providers to manage TDMA and SCPC networks over the same platform. HTS satellites could use TDMA or SCPC return via the iDirect platform as a technology-agnostic and thus flexible solution.

In May, Comtech Xicom Technology received an order for $1.5 million for the company's Ka-band high-power amplifiers serving the HTS market. Comtech has already established inroads in Asia with its partnership with iPSTAR (the sole operational HTS program in Asia thus far) to provide integrated satellite backhaul solutions for mobile and WiMAX networks.  Asia is and will continue to be the largest wireless backhaul market in the globe where early market entry could translate to long term market leadership.

In NSR’s view, it is still too early and thus difficult to determine which technology or vendors have the edge or will win out in the battle for HTS and O3b wireless backhaul equipment. Discussions and negotiations are surely taking place behind the scenes where a wide open, competitive (as well as collaborative) field of players for future deployments will likely take shape for companies that include not only Comtech and iDirect but also Viasat, Gilat and General Dynamics, among others, that have existing partnerships. Over time (or perhaps already taking place) will be discussions with Intelsat for its upcoming EpicNG and perhaps Inmarsat for GlobalXpress as well as Yahsat and other regional HTS providers.

Bottom Line

The wireless backhaul market shift represents a highly dynamic and competitive landscape where technical solutions, price offerings and the ability to work with other vendors (both on the equipment and service side of the industry) may be some of the elements that could lead to market success.  For the moment, NSR views iDirect and Comtech as two leading companies in a narrow field that are well-positioned in the satellite backhaul equipment market for HTS and O3b. But with any nascent and shifting market, this situation can change very quickly.