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


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