Rural SMBs get broadband boost with satellite launch

Thousands of Canadian small and medium sized businesses located in broadband-challenged rural areas ware set to get a boost.

A U.S.-built satellite launched yesterday afternoon from Kazakhstan will allow a Canada’s Xplornet Communications to offer 4G speeds to rural parts of the country that will come closer to what their city cousins can get.

ViaSat-1, whose footprint will cover much of southern Canada and the U.S., is scheduled to be hurled into space by an ILS Proton Breeze M missile just before 3 p.m. Eastern time today.

The Ka-band satellite will have 130 gigabits per second throughput and more bandwidth capacity than all the existing commercial broadband satellites over North America combined. It can handle as many as 1.5 million subscribers, and do it a drastically reduced price from current birds.

“This is why we’re so excited,” Avis Sokol, Xplornet’s vice-president of marketing said in an interview this week. Although the Woodstock, N.B.-based company has been in the broadband satellite provider business for years, “the capacity of this satellite is unlike anything that we’ve seen before.”

“What it enables us to do is start to move our capacity to eventually get 4G to everyone in [rural] Canada.

At least one Canadian telecommunications expert said this development has been a long time coming.

Many rural areas in Canada have remained underserved by Internet Service Providers (ISPs) for “purely economic reasons” said Roberta Fox, principal of Fox Group Consulting, a Mt. Albert, Ont.-based telecommunications technology consultancy.

“Traditional wired broadband services such as DSL and cable are not cost effective to install in rural or near rural area because there are not enough subscribers,” she said.

As the need for better speed broadband increases due to next generation Internet-based applications such as desktop video conferencing IP-based TV and as businesses and families move to replace legacy phone systems and migrate to voice over IP (VoIP) telecom systems, Fox see’s the service being offered by Xplornet becoming more critical.

 “Hopefully, this will drive the interest and demand within these areas so that SMBs will spend money to acquire the next generation broadband services that Xplornet will be able to offer,” she added.

Canadian pricing for Xplornet subscribers

Xplornet’s existing residential satellite subscribers pay $120 a month for download speeds of up to 1.5 megabits a second. When ViaSat-1 comes online later this year, they’ll be able to pay $55 a month for the same speed (plus a $249 up front charge), which includes 10 Gb of data. More importantly, there will be packages with speeds of up to 10 Mbps, twice the maximum that some subscribers can get now.

For business satellite customers, ViaSat-1 will enable Xplornet initially to offer a 1.5 Mbps package for $85 a month that includes 60 Gb of data and a static IP address, but by the end of 2012 there will be a business package offering up to 25 Mbps. (Prices include a monthly satellite dish and modem rental fee.)

“The economics of these new satellites are dramatically different,” Sokol said. “They’re so much more affordable for us, which means we can make it more affordable for Canadians.”

Iain Grant, managing director of the Montreal-based SeaBoard Group telecommunications consultancy, isn’t impressed with the uplink speed on the base package, which he said will only hit 256 kilobits a second. There will also be the standard 250 millisecond delay in each direction for satellite up and downlink, he added.

ViaSat-1 will cover half of British Columbia, the southern parts of Alberta, Saskatchewan, Ontario, Quebec and a small part of New Brunswick. Its service will start to selective areas before the end of the year, and to all of it by the end of February. With the launch of another satellite next year that footprint will be broadened to include more of B.C. and New Brunswick, as well as Newfoundland.

About half of Xplornet’s 150,000 customers are on satellite service and the company hopes to convert as many as it can to 4G. One way is by offering a US$50 discount off the upfront charge.
(The other half of Xplornet’s subscibers use its fixed wireless service, which is being converted to 4G WiMax)
Xplornet is buying the satellite capacity through Telesat Canada, which is partly-owned by the ViaSat-1’s manufacturer, Space Systems/Loral.

It’s part of a $500 million bet Xplornet is making over 15 years in contracting for capacity for two 4G satellites to blanket most of the country. The second, called Jupiter and built by Hughes Network Systems LLC, will be launched next spring.

Xplornet also had to build new ground stations near St. John’s, Nfld., and Fort McMurray, Alta., as well as upgrade existing ground stations.

But the company with the most on the line is ViaSat Corp. of Carlsbad, Calif., which paid US$400 million for the 6,740 kg ViaSat-1 as it moves from a satellite ground equipment maker to a rural U.S. broadband Internet provider through its Wild Blue Communications division. Passengers flying on select Continental and JetBlue airlines flights will also be able to buy in-air broadband service.

ViaSat-1 will sit in a geostationary orbit at 115.1 degrees West longitude, meaning a subscriber’s satellite dish needs an unobstructed view of the southern sky. The satellite has 72 spot beams, with 63 covering the U.S. and nine over Canada.

Broadband hurdles in rural areas

Fox, whose company is located in a rural area, said they use Xplornet as one of their four broadband service providers. “It takes four providers aggregated together to get the bandwidth and diversity for backup that we need as a technology dependent distributed company.”

She said the three main challenges faced by rural-based businesses that need internet service are:

  • Lack of knowledge about services available and what existing technology can do for their business
  • The shortage of dealers and value added resellers who can install systems and provider technical support
  • Having the spectrum to have the need Internet services available

Fox said it is great that Xplornet will have the spectrum needed to deliver higher broadband services now but she added that the company’s work is cut out for it.

“They will now need to invest in marketing, education and building channels that can install and deliver these services to the rural and near rural areas,” said Fox.

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