Prices have yet to come down to earth

The satellite communications market has not lived up to the expectations set for it a few years ago. Satellite data traffic hasn’t grown as much as some analysts projected in 2000; a drop in equipment prices that was to have jump-started the residential satellite market has taken longer than hoped,

and the satellite phone business has gone through a crisis of confidence that began with the collapse of Iridium, the much-hyped pioneer of the sector.

The residential market for satellite data services is modest — for evidence look no farther than Hughes Electronics Corp.’s decision in December to shelve plans for broadband Internet access service by satellite in the United States. The business market is doing somewhat better, even if not as well as two- to three-year-old forecasts would have had us expect. And at least one major satellite phone service provider maintains the worst is over for that somewhat battle-scarred sector.

“”For us as a company it has gone very well,”” says Patrick Hinds, vice-president of sales at Quick Link Communications Ltd. in Calgary. Hinds says industry forecasts made around 2000 were built on the assumption that the cost of customer-premises equipment would drop to less than $500 by now. In reality, the equipment still costs a couple of thousand dollars.

Part of the problem has been a delay in the arrival of new Ka-band satellites, which promise more bandwidth and lower equipment costs on the ground. Telesat Canada’s Anik F2 satellite, the first to offer Ka-band service in Canada, is now expected to enter service in the first quarter of next year, according to Paul Bush, vice-president of corporate development at Telesat. Meanwhile sub-$500 customer equipment still hasn’t proven itself in testing.

When Ka-band becomes real, it will provide download speeds up to about 50 megabits per second (Mbps) and upload speeds to around 16 Mbps, according to Leslie Klein, president and chief executive officer of C-Com Satellite Systems Inc., an Ottawa-based satellite data service provider. Current Very Small Aperture Terminal (VSAT) technology can support download speeds of about 500 kilobits per second (Kbps) and upload speeds of around 165 Kbps, so Ka-band promises roughly a tenfold speed improvement in both directions.

While the industry waits for Ka-band, though, a number of business customers have already found satellites a good way to transmit data.

Oil and gas industry one of the key vertical markets

The obvious applications lie in those industries with substantial amounts of data to move and a need for that data to come from or go to out-of-the-way places. In Canada, the oil and gas industry is one of the most important vertical markets for satellite services. Hinds says there are actually four significant submarkets within the oil and gas industry. They include drilling rigs, which are usually located in remote areas and often in the Far North. Other submarkets include production sites,

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Jim Love, Chief Content Officer, IT World Canada

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Grant Buckler
Grant Buckler
Freelance journalist specializing in information technology, telecommunications, energy & clean tech. Theatre-lover & trainee hobby farmer.

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