According to strategic research by Frost & Sullivan, "World Broadband Satellite Service and Equipment Markets," corporate take-up of the technology to support enterprise networks will help to drive the market to $9.14 billion in worldwide service revenues in 2004 alone.

Furthermore, the emergence of the new broadband systems will be a bonanza for manufacturers of satellites and satellite earth stations. Frost & Sullivan estimates that cumulative investment in broadband satellites will reach $18.72 billion from 1998 to 2004. Moreover, cumulative investment in ground systems is forecasted to reach $7.06 billion from 1998 to 2004.

"In addition to the coming boom in infrastructure buildout, these new satellite services also promise ubiquitous, unwired access to high bandwidth on a global scale," says Greg Caressi, one of Frost & Sullivan's satellite industry analysts. "This is a significant technology change, since until now high-speed data has largely been feasible only through physical connections to the public network."

However, superior technology is not necessarily the key to success in the broadband market, cautions Caressi. "The Ka-band service providers with well-implemented international distribution networks and marketing plans will always win out over those that have a technically elegant solution which is not strongly supported by local service providers."

Although widespread deployment of geostationary and low-Earth orbit Ka-band satellites will not occur until early in the next decade, the market is already beginning to emerge through conventional satellite technology.

The most prominent example of this emergence is the growing use of satellites by Internet service providers (ISPs) outside the United States. These ISPs use a satellite link to bypass the multiple router hops and overseas fiber bottlenecks that normally would obstruct data communications.

Another rapidly growing market segment is local loop bypass, where corporate and consumer end users utilize satellites to bypass the congestion of the public phone network. This application parallels the ISDN, cable modem, and DSL markets. "Hughes Network Systems' DirecPC service is the earliest example of this service," said Caressi. "Although initial demand for the service was slow, DirecPC had reached 60,000 subscribers by the first quarter of 1998, with most of the growth occurring in the past three quarters."

One final factor that will drive the broadband market is that many of the traditional C-band and Ku-band satellite frequencies are rapidly becoming crowded, particularly in North America and Europe. This spectrum scarcity naturally will push satellite operators into the Ka-band frequencies.

But despite the early growth and high expectations of the broadband market, prospective service providers will face many challenges, with marketing foremost. "Low-cost broadband service is very new for any technology," said Caressi. "Landline equivalents to satellite services aren't widely available, so potential customers won't even know to seek these services out."

"Moreover, many satellite companies are unknown to the general populace," he said. This lack of customer awareness means that outlays for marketing and customer education must be substantial in the early years of any satellite-Internet service.

In terms of technology expenditures alone, the broadband satellite market represents a major growth avenue for the international satellite communications industry. Frost & Sullivan's "World Broadband Satellite Service and Equipment Markets" will help service providers and hardware vendors navigate this highly competitive landscape.

The technologies reviewed include cable modems, DSL, ATM, ISDN, frame relay, TCP/IP, FSS, LMDS, WLL, Teledesic, SkyBridge, Spaceway, Cyberstar, Astrolink, Lockheed Martin, Hughes, Motorola, Loral, Boeing, Intelsat, Astra, PanAmSat, and Eutelsat. Industry participants included an A-Z of companies activie in space hardware.

Frost & Sullivan

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