Satellite telephony and broadband have long been the only choice for those living and working in remote regions of Australia. But as mainstream wired and wireless means of connectivity improve and penetrate further into these regional areas, what role will satellite play in the nation’s telecommunications infrastructure?
Satellite telephony and broadband have long been the only choice for those Australians that live and work outside of the bounds of our wired and wireless networks. While it can be used more or less anywhere, the costs involved are high and the bandwidth available is low, compared to these other technologies.
According to telco analyst Paul Budde, only about 1-2% of the Australian population use satellite services. A year ago, remote residential users and small businesses had about 30 service providers to choose from, many of which were only formed to capitalise on the government’s subsidy on satellite services. This pool of companies has since gone through a series of mergers, leaving customers with approximately seven serious large-scale providers.
“When you have a government subsidy you get lots of companies that then jump up and down and say, ‘I want a share of it’. They do a good marketing plan and then some of them fail, and then they merge,” Budde says.
Large companies - like mining companies with remote operations, or banks with remote branches - have so far drawn on a different group of services. They tend to use dedicated VSAT plans from Telstra or Optus, which provide more bandwidth than residential offerings but at a heftier cost, and are still much slower than other forms of broadband.
A shrinking target market
Generally speaking, as land-based wired and wireless technologies improve, they penetrate further into regional areas, encroaching on the domain of satellite. And we’ll soon experience another of these jumps in technology.
“In 5-10 years you will see that there will be more wireless broadband and fibre broadband in areas that are at the moment still covered by satellite,” Budde says.
Residential and corporate customers alike will turn to these cheaper and faster technologies, leading the satellite service providers into another round of mergers. So there will be two sources of service provider consolidation: the influence of better alternative technologies and the aforementioned market saturation, which will only increase.
“Once you have actually covered the 1 or 2% of the population, then that's it. That's your satellite market. There's not much more you can do,” Budde says.
Customers needn’t worry too much about a decrease in competition, though. The government subsidies which fuel these providers stipulate a ceiling on prices, Budde says, so any monopolies won’t necessarily mean inflated subscription fees.
But while the market for satellite services may shrink, it will never disappear completely; it’s inconceivable that any of the upcoming wired or wireless technologies could cover the entirety of Australia. Therefore, there will always be a small percentage of the Australian population that live and work outside the reach of traditional broadband infrastructure.
And if the number of users becomes so low that service providers lose interest, the government will inject funds into the market, Budde says, likely in the form of increased subsidies to attract service providers.
Similarly, there will always be businesses that require broadband access in remote areas, be it for a static operation (like a remote mine) or for a mobile agent (roving reporters).
New entrants
But despite the prospect of a shrinking customer base, there’s at least one new entrant in the satellite broadband market. Earlier this year, the local arm of global managed networking services provider Azzurri Communications launched its own set of satellite services, funnelling bandwidth from Inmarsat’s I4 satellites.
The I4 satellites form the backbone of Inmarsat’s Broadband Global Area Network (BGAN), which Azzurri’s Managing Director in Australia, Jon Evans, says is superior to the existing corporate satellite services. BGAN is IP based, can support downlink speeds of up to 492 Kbps and its terminals are about the size of a laptop, so they can easily be moved around by users. Existing VSAT services, on the other hand, use 1 m diameter dishes, which definitely cannot be carried on a journalist’s back.
And while branching out into this shrinking market is ostensibly an odd move, Evans says there’s a perfectly good reason: Azzurri is not looking to compete against traditional satellite providers. Instead, satellite services are an enhancement to the company’s existing network wired and wireless networks, used only when other means of connectivity fail.
“The BGAN Inmarsat services have filled any grey area or any area that’s been void before,” Evans says. “We would put terrestrial networks in as a preference, where we can.”
So if an existing client decides they’re sending someone to the middle of the Gibson Desert, Azzurri can provide a portable terminal which will integrate directly into the client’s existing corporate network.
Azzurri will showcase the Inmarsat technology in this year’s ultra competitive Sydney to Hobart yacht race. The company will provide a FleetBroadband 250 satellite terminal for Quest, the vessel that won last year’s race.
Not content to sail along blind to the competition’s progress, Quest’s crew will use the satellite broadband to monitor their competitors, via the official race website. The website will feature the locations and headings of each yacht, updated in real time.
Evans says the crew can also get “real-time updates on weather and tide information, so they can plan their next strategic move in terms of where they’re going to head and where they’re going to go”.
*Andrew Collins is a freelance writer.