Fixed Satellite Communications: Market Dynamics and Trends

Abstract

The history of fixed satellite services (FSS) systems, in terms of technological and institutional development, has been previously provided in chapter “History of Satellite Communications” of this handbook to a very large extent. Thus, this chapter addresses the market trends related to FSS systems and also discusses how a variety of new types of satellite services has evolved out of the initial FSS networks over time.

The market dynamics and trends of FSS systems are particularly addressed in terms of four main factors: (1) the competitive impact of high-efficiency fiber-optic terrestrial and submarine cable communications networks; (2) the conversion of FSS systems from analogue to digital services that allowed FSS systems to be more cost-efficient and use spectrum more efficiently as well as migrate to spectrum in higher bands more effectively; (3) the move of FSS systems toward deployment of smaller and lower cost ground systems (variously called VSATs, VSAAs, USATs, and microterminals) that allowed services to migrate closer to the “edge” of telecommunication user networks (i.e., satellite services directly to end user facilities); and (4) a shift in regulatory policy that allows FSS systems to compete directly for services that has generally served to reduce cost and spur innovations in services and applications.

These four trends have combined to contribute to what has been previously described in chapter “History of Satellite Communications” as “technology inversion.” This “technology inversion” has thus seen FSS systems in space become larger, more complex, longer-lived, and more powerful as ground systems have become more user-friendly, lower in cost, and are designed to interface directly with users at localized office facilities or even small office/home office (SoHo) VSATs or microterminals. These technological, regulatory, and market-based trends have shaped the FSS networks and related market dynamics. All four of these trends have dramatically reshaped the nature of FSS services for both commercial markets and defense-related satellite networks around the world.

The historical trend in FSS markets has been the initial development of global networks since global connectivity was the highest value market and the most underserved by terrestrial telecommunications networks available in the 1960s. Over time, satellite technology matured and the economical viability of regional and domestic satellite systems evolved in the years that followed. Today there are some 300 FSS satellites, essentially all in GEO orbit where these systems provide a complex combination of global, regional, and domestic satellite services. Although broadcast satellite services have outstripped FSS in terms of market value and sales, the FSS is still a very large and growing multibillion dollar industry.