ASSESSMENT OF C-BAND USAGE IN ASIAN COUNTRIESsatellite-spectrum-initiative.com/files/CASBAA_SIF_2014_-Pacome... · CASBAA Satellite Industry Forum 2014 – Assessment of C-band Usage

CASBAA Satellite Industry Forum 2014 – Assessment of C-band Usage in Asian Countries

Pacome Revillon, CEO Monday, June 16th, 2014

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ASSESSMENT OF C-BAND

USAGE

IN ASIAN COUNTRIES

CASBAA SATELLITE INDUSTRY

FORUM


Euroconsult, 30 years of expertise

WHO WE ARE

• Euroconsult is a global expert in satellite

market consulting & analysis

• Established in 1983, independently

owned and operated

• Three offices: Paris (HQ), Montreal and

Washington, D.C.

• Over 570 customers in 50 countries

WHAT WE DO

• First-class strategic consulting,

development of comprehensive

research reports and executive-level

events

• Mission to support decision-making for

private and government organizations in

the satellite and communications

industry

Euroconsult is trusted by over 570 clients in 50 countries

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EVENTS

SERVING CLIENTS IN 50 COUNTRIES

CONSULTING

OVER 20 RECURRING RESEARCH REPORTS

RESEARCH


Consulting: unique integrated capability

Over 450 consulting missions conducted in over 50 countries

• Market analysis and forecasts

• Market validation

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• Independent business case assessments

• Pricing valuations

• Revenue forecasts & DCF modeling

• A dozen due diligence missions already

completed in the last twelve months

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• Impact assessments

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practices

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development reviews & procurement

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optimization

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Operations Management Services


C-band assessment: background and methodology

METHODOLOGY

• Study conducted from March to May

2014

• Review of public information, including

third-party publication and our own past

research,

• Dedicated interview process:

We performed interviews or received

written data from 48 public & private

organizations, of which 40 located in the

focus countries.

These organizations involved:

• Government and public agencies,

• Broadcasters,

• Telecom operators,

• Satellite operators,

• Service providers and resellers,

• Equipment suppliers,

• End users

MANDATE / OBJECTIVES

• Independent assessment of C-band

usage in three focus countries namely

India, Indonesia and Papua New

Guinea,

• Our study assesses the number and

characteristics of user antennas

operating in C-band, as well as the

economic impact and socio-economic

benefits which accrue from the services,

STUDY TEAM

• Project management

Pacôme Révillon, CEO

• Lead consultant

Stéphane Chenard, Associate Senior

Consultant

• Main other contributors:

Deepu Krishnan, Senior Consultant

Dimitri Buchs, Consultant


C-band assessment: background and methodology

(continued)

LIMITATIONS

Our analysis relies in part on public information which cannot always be corroborated,

as well as on interviews with third parties made independently of this study on the

condition that such parties not be identified, or made without their explicit consent to be

identified, or made subject to non-disclosure agreements. The report also examines

questions on which we find prior research or available statistics to be extremely limited

or non-existent; the specific uncertainties which result are detailed in the full report.

As such, Euroconsult disclaims liability for any harm which may result from use of the

report. However, we believe that the information at our disposal was sufficient to support

our analysis within our normal standards of accuracy and for the purpose of our

engagement.


The C-band market represents a very important of the satellite activity in Asia:

• Close to 60 satellites covered at least part of Asia with C-band capacity in

2012. Overall, satellite operators supplied a total capacity of more than 33

GHz in C-band in 2012 in Asia. This figure further discounts part of the C-

band capacity carried on satellite offering coverage of both Asia and other

world regions,

• Satellite capacity usage in C-band stood over 27 GHz in Asia in 2012,

corresponding to a fill rate of more than 80% of capacity supplied, and to

around 47% of the total satellite capacity used in the region,

• We estimate that the C-band capacity market stands at more than $800M in

Asia, under a conservative assumption of global average of

~$2,500/MHz/month for leased capacity. Capacity pricing can largely vary

depending on the application.

Overview and rationale for C-band usage


Overview and rationale for C-band usage

(continued)

A B C D E F G H J K L M N

P- Q

drier wetter ITU rain zones

mm/hour of rain in rainiest 1% of year 2 3 5 8 6 8 11 20 12 15 22 35 >65

*dB of margin for 99.9% availability at 12 GHz (satellite at 25° elevation, rain at 5 km altitude)

1 1 1 1 1 1 2 4 4 4 4 7 15 dB of margin for 99.9% availability*

TWO PHYSICAL

CHARACTERISTICS

WITH A HIGH VALUE FOR

USERS:

High quality transmission / low

sensitivity

to rain fade,

Availability of large beams, enabling

coverage of a large country/maritime

sector or of the full Asian region,

Two physical characteristics with a high value for users


The three focus countries

India ~1.2BN inhabitants /~245M households

~155M TV households ~40K C-band VSATs

Indonesia ~245M inhabitants /~65M homes

~45M TV households ~125K C-band VSATs

Papua New Guinea ~7M inhabitants

Limited penetration of TV sets, but large collective viewing ~1,000 C-band VSAT sites


C-band impact for the broadcast sector

0

500

1,000

1,500

2,000

2,500

2005 2007 2009 2011 2013

TV signals distributed by satellite in C-band in Asia Pacific

Standard definition

High definition

While the distribution of TV signals is still largely in SD, the number of HD signals in C-band reached close to

200 in 2013

Broadcasting sector as large and

fast growing sector in Asia. Cable

alone reaches ~350M homes.

Distribution of TV channels through C-

band satellite capacity has been a fast

growing market.

Reported usages include:

Transmission of TV channels to the

head-end of terrestrial networks,

and in particular cable networks, as

well as to ground stations of DTH

platforms,

Broadcast of TV channels direct-to-

home (or to hotels etc.) either for

free-to-air or pay-TV reception.

This furthermore does not include

occasional use and satellite news

gathering.


Content delivery to distribution platforms

(cable, DTH)

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C-band impact for the broadcast sector (continued)

~750k pay-TV subscribers 12-17M homes for FTA reception

Direct TV reception

by households 10 antennas

The entire television industry and viewership depends on C-band transmissions*

Indonesia

Papua New Guinea

India

*Figures only state for fully confirmed usage and considered as a minimum reach

Likely use (up to ~2M homes)

~3.5M viewers, i.e. 50% of total viewers

~500k dishes for direct reception

~20K cable homes

110-130M cable / DTH pay-TV homes

Digicable Network India, New Delhi


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Communication services over C-band: overview

Public safety and security networks (disaster management, police, military forces)

~165,000 C-band VSAT sites for the three focus countries

Rural connectivity (mobile base stations, village centres)

Banking / finance sector (ATMs, office connectivity,

stock brokering)

Industrial, utilities and other private businesses (oil&gaz, mining, power, retail)

Most sites have stringent requirements for reliable

and uninterrupted communications that only

C-band can provide

Other public services (education, health, administrations etc.)


C-band communication services themselves constitute a high-technology industry,

supported in the user countries by a local ecosystem of companies and highly qualified

personnel:

• In India and Indonesia, C-band capacity is provided in large part by one or more

national satellite operator(s), in addition to foreign operators,

• In each focus country, at least 10 to 20 specialized service providers manage the

C-band links and networks of end-users,

• In India and Indonesia, local companies manufacture

a significant fraction of C-band television antennas,

• Finally, significant numbers of distributors and installers

benefit directly from the deployment of C-band solutions.

An ecosystem of companies involved in C-band

operations

Indonesia: C-band antenna manufacturing facility of PT. Stella Satindo, 2014


Banking and financial sector as large C-band user

segment Indonesia:

~75,000 ATM sites for different banks, are estimated

to handle ~15M transactions per day, for a value

>$400m

~4K C-band VSATs connect ~20% of total banks'

branches to headquarters for clearing and back-

office purposes,

In April 2014, BRI bank procured its own satellite,

BRISat,

India:

Financial/banking uses nearly 50% of all C-band

VSAT sites,

Trading: ~8,000 C-band terminals support >80K

trading terminals, generating >8M financial

transactions per day,

Banks: ~10,000 sites including ~5K for ATMs, in

support of ~22M bank visits and ~365M ATM

transactions per year,

Papua New Guinea:

Banks use ~55 C-band VSATs in main cities to

connect microwave networks which then connect

ATMs, and for back-office purposes.

C-band VSATs as only option for expansion of ATMs

in rural areas,

ATMs and convenience store in Jakarta, May 2014

Mobile ATM – Indonesia

C-band is key for banking networks and the inclusion

of all population in the financing system.


C-band networks leverage by multiple other

industrial business segments including…

Cumulative identified sites

for the three countries

Oil and gas, mining

(>1,500 sites) Real-time relay of

sensors, Exploration,

Personnel welfare

Retail (>30,000 sites)

Including for ATM operations in convenience

stores. Start of digital

signage etc

Agriculture (>250 sites) Production

monitoring, staff welfare

Power companies

(>1,500 sites) Monitoring, control of

electric grid


Rural connectivity, involving cellular backhaul and

USOs Indonesia:

A key use of C-band satellite capacity in Indonesia is in support of the

backhaul needs of cellular carriers and for public telephony in remote areas.

Over 1,000 sites serve ~6-15M subscribers, for a market value of $224-

558M,

Another 5,700 terminals have been deployed to provide telephony in rural

areas through the government-sponsored Universal Service Obligation

(USO) program.

India:

~100 C-band terminals are deployed to provide connectivity to rural India,

including as part of two ISRO projects (Gramsat and the Village Resource

Centres - VRCs),

Telecom carriers also use a substantial amount of C-band capacity to

backhaul traffic from areas with limited connectivity, such as the Andaman

and Nicobar islands, Jammu and Kashmir and the Northeastern States,

using ~100-150 stations.

Papua New Guinea:

~80 BTSs connected through C-band connecting at least 80-400k

subscribers. This must represent most rural subscribers or ~5-10% of total

mobile subscribers,

Extension of networks in rural areas will most likely involve more C-band

sites,

In 2013 the government also took steps to establish a universal service fund

to promote rural communications.


Health: from support to administration to

telemedicine India

Rural population of close to 700M with

very limited access to healthcare

facilities,

~4k fixed and mobile satellite sites

bring medical skills to rural areas,

connecting patients to

hospitals/medical centers,

~150,000 patients treated per year,

Benefits also include cost savings for

patients,

Papua New Guinea

~10 VSATs installed at hospitals

for office requirements

larger projects are being

considered by Telikom PNG and by

private companies. The draft

National Broadband Policy sets the

goal of providing a broadband

connection to all hospitals by 2018.

Apollo Telemedicine Network Foundation, Gujarat, India

Malabar Cancer Care Society Kerala, India


Improving the education system

India

National policy to promote education in

both urban and rural areas,

~8,000 satellite sites operated by

public and private organizations,

Supporting training for an estimate of

~1M students per year,

Evaluations showed that digital

classrooms improve the students’

performance

Papua New Guinea

~50 C-band sites 10 VSATs installed at

hospitals for office requirements

National Broadband Policy currently

under development tentatively sets the

objective of providing Internet access

to 80% of rural schools (and all urban

schools) by 2018

India: VSATs showcased in Educomp Solutions' promotion of its education service, 2014


Public safety and security – police and military

India

Large C-band networks support important national security and public safety

services. In total the Indian Army, Navy and police are estimated to operate

~7,000 C-band terminals, either themselves or through service providers,

The Indian Navy operates its own satellite – GSat 7, launched in 2013 – with

three of its transponders operating in C-band. In early 2014 it was said to have

outfitted at least 30 ships with C-band antennas,

The Indian police operates POLNET, a C-band network with 961 terminals as

of 2012 (with 3.8m antennas). POLNET is dimensioned for up to 1,500

terminals, but was due in 2013-14 to be upgraded so terminals could

eventually be installed in all police stations – potentially over 15,000 locations,

Indonesia

The deployment of 200 military terminals has been reported,

35 van-mounted terminals acquired by Indonesian police to support forensic

investigations on crime scenes as part of the Indonesia Automatic Fingerprint

Identification System (INAFIS)


C-band usage is key for disaster management

networks

Indonesia: Expanded after the tsunami of 2004, the

Tsunami Early Warning System (InaTEWS - run by the

BKMG) connects over 700 sensors via 161 VSATs to a

monitoring center in Jakarta. The center analyses data and

can disseminate warning messages within 5 minutes of an

earthquake. BMKG operates ~400 other C-band VSATs as

part of its other meteorological and geophysical networks,

as well as 35 mobile terminals for emergency use.

India: ISRO operates the Disaster Management Support

Network (DMSN - 36 C-band sites as of 2012). At the time

the DMSN was ultimately dimensioned for up to 600

terminals. The Meteorological Department operates the 17-

site Real Time Seismic Monitoring Network, which provides

early warning of tsunamis. Plans to expand and modernize

the DMSN have been under discussion, and in 2011 were

allocated over $150m with the aim of establishing a more

coherent, nationwide network by 2017.

Papua New Guinea: One network includes five C-band

sites maintained by the Department of Meteorology and

Geophysics to monitor earthquakes and some of the

country's ~15 active volcanoes. The National Disaster

Centre separately maintains a larger network with 60 C-

band sites;

Remote terminal connecting a tide gauge in Sadeng, E. Java

Rooftop of main operational center, Jakarta


A range of other public services supported by C-

band VSATs

Air navigation and safety: Airports and air traffic control centers in all three

countries are interconnected by C-band networks. These, in particular, are

critical to large investments made by India in new navigation satellites, and by

Papua New Guinea to permit airlines to transit its air space more efficiently;

e-Government: Indonesian citizens depend on a C-band government network of

6,000 sites operating in C-band to obtain and renew their new biometric identity

documents; so do civil servants in Papua New Guinea to receive their salaries in

rural areas; In PNG, a network of 260 sites is also installed for the Local Level

Governments (LLG) which manage each district;


Takeaways

• In both India, Indonesia and Papua New Guinea, we find that C-band is extensively

used for communication networks, often of critical importance to these

countries' economy, society or security, across a great variety of applications, for

both private companies and government organizations, and in both rural areas and

city centers;

• Most of these networks rely on C-band because of stringent requirements for

reliable and uninterrupted communications, which could not be met using higher

frequency bands with greater susceptibility to rain fade. Users are often ready to pay

for more expensive antennas and potentially higher priced capacity to benefit from

the advantages of the C-band;

• The governments of India, Indonesia and Papua New Guinea all have invested in

various C-band networks to optimize the efficiency of their operations and to support

key development and security policies. In total, we identify approximately 19,500

VSATs already installed as part of these networks, along with a number of additional

development projects;

• The availability of C-band satellite links is of clear, direct and often considerable

importance to a variety of economic sectors, in all three focus countries, including

for the broadcasting sector, the financial sector, for a variety of other large industry

sectors such as the oil and gaz and mining industries, for retail chains as well as

critical infrastructure such as the power grid;

• Even if alternatives were available, replacing millions of TVRO and hundreds of

thousands of VSATs would just not be feasible. The replacement cost would stand in

$ billions, and the process would take several years, during which vital services

would be disrupted.


THANK YOU!

linkedin.com/company/euroconsult

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Pacome Revillon CEO [email protected] Tel: +33 1 49 23 75 30

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