Market Insight

Intelsat launches Epic

May 22, 2013

Przemek Bozek Przemek Bozek Associate Director – Research and Analysis, Service Provider Technology
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The Defence, Space and Security division of US aerospace company Boeing will build another four satellites for global satellite operator Intelsat to include in its 'Epic' fleet. Epic is planned as Intelsat's new Fixed Satellite Service (FSS), which traditionally has been used to enable the backhaul data transport that mobile and fixed-line consumer broadband services require. FSS is also used for enterprise services such as maritime, air and land terminal connection, and in government.  The agreement brings the tally of Boeing's Epic satellites to five. The first Epic spacecraft - Intelsat 29e, built on Boeing's medium power satellite platform BSS-702MP, will launch in 2015 and will cover the Americas and North Atlantic. Remaining Epic satellites are scheduled for take-off from 2016, with Intelsat 33e becoming operational in the same year.

Intelsat's Epic is a move to secure Intelsat's leading role in the FSS sector, Intelsat's largest source of revenue. Pressure from Inmarsat and O3b in this sector has grown over the past few years after both companies announced their intention of delivering Ka-band satellites capable of competing with Intelsat for its FSS customers. Since designing and building a satellite system involves time and requires enormous capital expenditure, Intelsat will be able to come with their own, new solution only a year after Inmarsat and O3b's constellations become operational. In launching Epic, Intelsat intends not only to keep  existing opportunities in the telcos, enterprise and government segments of the FSS market but also sends a clear signal to prospective customers that they offer a very competitive satellite solution. Once launched, Intelsat 29e together with Intelsat 33e will offer its services to clients across Americas, a passage on North Atlantic covering planes and vessels, EMEA and most part of Asia reaching North Australia via Indian Ocean. Subsequent Epic satellites will cover the remaining parts of the populated world and seas.

For its part, O3b has joined its operational efforts with SES, its largest investor and 47% stakeholder. The O3b satellites, manufactured by Thales Alenia Space, will be functioning in the Ka-band from the Medium Earth Orbit (MEO) and will deliver broadband based solutions for telcos, enterprise and government clients over satellite. Fundamentally, O3b will use its impending launches to target the same segment of the FSS market where Intelsat is attempting to consolidate its position. The first eight satellites are set for launch in 2013 while another four will be launched in 2014. When the system is fully operational, O3b anticipates being able to cover 70% of the world's population between 45 degrees of latitude north and south of the equator.

Inmarsat is developing its own growth strategy and client base in the L-band spectrum, focusing mostly on maritime, air and land enterprise, and government broadband communication. This year Inmarsat will launch the first satellite in its Inmarsat 5 series, active in the Ka-band. By the end of 2014 the full global Ka band coverage, provided by three Boeing-made 702HP satellites, with downlink speeds of up to 50Mbps and uplink speeds of up to 5Mbps from compact user terminals is on their agenda. With new capacity, Inmarsat is obliged to expand to new vertical markets. Within the FSS market, Inmarsat is attempting to address sub-segments that are not currently being addressed by their L-band satellites Inmarsat will be heading for new customers not only in areas not covered by terrestrial infrastructure, for instance ships and planes on the move, oil rigs or mines but also are going to compete with and complement terrestrial services.

More broadly, Inmarsat and O3b's use of the Ka-band has further potential consequences, above and beyond the FSS sector itself. In particular, use of the Ka-band may also disrupt revenues generated by Broadcasting Satellite Service (BSS) providers. The Ka-band has already been used for DTH transmission over North America, and given that its price per MHz is more economical by roughly a third over traditional DTH transmission spectrums in the Ku- and C- bands, this could apply pressure on Intelsat, Eutelsat, SES and other satellite operators' core broadcasting services markets. However, it may not prove to be worth shifting to the Ka-band by existing pay-TV operators as Ka-band signal comes with the issue of attenuation during raining seasons.

Geography
World
Organization
Inmarsat Intelsat O3b
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