Tuesday, June 28, 2005

Bleeding Edge or Expensive Enterprise?

For those businesses unable can't get T1, Cable or DSL service for less than half a year's Gross Profit, vsat (very small aperture terminal) satellite internet is about the only way to obtain decent internet speed. Over the last two years or so many companies have advertised about upcoming solutions to this issue...after all, the internet industry is huge and growing by giant leaps each year.

Let's take a look at what is currently available and what is on the way:

Available Ku Band Enterprise Systems
This is a "catch all" phrase covering the more expensive equipment and service offered by several large uplink comapnies. It is characterized by larger satellite dishes (typically 1.0 meter or larger), more powerful transmitters (at least 2 watts) and less populated transponders than the "residential" or "small business" setup's available from Direcway, Starband and Wildblue. The result is more consistent, faster service.....what most businesses expect.
There are two general avenues you can take regarding speed and throughput: Shared or dedicated bandwidth - and the difference in price is staggering. For most business applications, shared bandwidth (the less expensive choice) will work fine - giving a company 1.5 kbps downloads and 256 kbps uploads over 90% of the time for prices in the $400-$1500 range. The crucial element of ANY offering is the "contention ratio" - how much they oversell the product or the number of concurrent users they allow on a transponder. Any company that does not put the ratio in writing is not worth doing business with - period...and any company with a contention ratio above 20-1 is not offering you true Enterprise service. With dedicated service (Guaranteed speeds) you will spend over $1,900 per month (up to several thousand per month), but will have service that is nearly bulletproof.
The most tested and dependable Enterprise setup available today in N. America is centered around a modem designed by iDirect Technologies http://www.idirect.net. This is a proven system that will give you what you pay for.
Other systems are coming into the marketplace like the ViaSat Surfbeam DOCSIS setup, a DOCSIS product from Telnor and the Direcway DW 7700; however, this is very new technology and certainly qualifies as "Bleeding Edge". Only four companies have the equipment to make it work right now and there are bumps in the road. Surfbeam and Telnor's big promise is a better utilization of available ku bandwidth, but no field results have confirmed this yet to my knowledge. Direcway has some beta equipment in the field right now producing strong results on empty transponders - not a good indication of long term results.
If any of these solutions can produce competitive results over time, it will force iDirect to rethink modem pricing as the DOCSIS and Direcway setups can be installed for about $500-$1,000 less.

Wireless and Satellite Internet Technology On The Horizon

The Satellite Internet world could be turned on it's head in the coming years as WIMAX emerges. It is a grand plan by Intel and others to cover very large areas of the world with a brand of microwave technology capable of sending data extremely fast to small antennas at homes and businesses. The big difference between WIFI and WIMAX is the distance covered by the main antenna.....the claim is 15-30 miles! Talk about bleeding edge....many of the "Big Boys" including Nokia and Cisco have abandoned plans to invest in it and speak of it as a bad business model to try to replace DSL. They point out that there are currently over 15 "standards" for the technology, not exactly a harmoneous start!
Ka band satellite internet for Enterprise has some real promise. The ability to "reuse" bandwidth, if the concept works, will enable companies to have T1 speeds or greater at any business location for much less than a T1 cost. A unit of SkyTerra Communications - the company managing Hughes Network Systems now, is working on advanced ka band spot beam technology to that end.
The greatest challange facing the satellite internet industry during the next 24 months is figuring out how to make profit.....in the absence of someone finding a business model that can show consistant profit, all of the transponder space allocated to internet will quickly be redeployed to HDTV or other types of profitable communication....bet on it!

Randy Scott
Owner VSAT U.S.
"Providing proven satellite internet solutions to business and consumers"

Sunday, June 05, 2005

Summer Update - VSAT Internet

As the summer of 2005 arrives, several new vsat internet companies have launched products and made promises that are frankly too optimistic and in some cases just plain untrue. In other cases, they have backed off initial upload speed predictions, downgraded the capabilities (such as voip & vpn) and pushed back program launch dates. What started as a very optimistic year for the deployment of faster and less expensive satellite broadband for underserved parts of the U.S. has begun to fizzle.
On the Consumer front, the product offering this year with the most publicity, long anticipated Ka Band spot beam internet, has started to roll out in Canadian markets and will soon begin limited installs in the U.S. by Wildblue Communications. The early users of Ka band in Canada are reporting acceptable download speeds, but the upload speeds are pedestrian by any standard...not very encouraging. The saving grace is that the service is less expensive than offerings like Direcway and Starband. The early tests of Wildblue customers in the U.S. have not been verified or widely published, so we will have to wait a bit; however, the service is coming from the same satellite used for Canadian customers, athough it is a different set of spot beams.
The greatest problem for the consumer sector is the inability of providers to earn a profit. This must change in 2005 or providers will abandon the market. SatMex, the Mexico based satellite owner and provider of a good deal of the consumer ku band service in North, Central and South America, was forced into Chapter 11 Bankruptcy court last week by creditors.
On the commercial front, there have been two new types of "Enterprise" priced services emerge this year. Ku Band Surfbeam internet (a ViaSat product- very similiar to the ka band modem but for Ku satellites) and a DVB-RCS product from Telnor out of Norway. Both offerings promise faster speeds for less money than their rivals. There haven't been any reliable test results offered by these companies yet to validate the claims. I've seen limited speed test results and nothing earth shattering has come to my attention thus far. There seems to be one thing missing from all of these less expensive commercial products - low contention ratios* - the key to consistent fast service.
*the number of concurrent users on a transponder, put in it's simplist terms.
For those who can't get terrestrial service, whether consumer or commercial, the equation hasn't changed - it still costs money to be guaranteed fast service! The kinds of things many people and companies want to do on an internet connection - connect to home office, use the internet for telephone calls, send or receive large files or stream video and transact business over the internet - remain difficult to do without a $2,500 + setup and monthly cost in the hundreds, when all the dust settles. I don't see that changing too much for two years or more... but I sure hope I'm wrong on this one!

Randy Scott