The State of Satellite Internet in 2005

For those businesses unable can't get T1, Cable or DSL internet service for less than half a year's Gross Profit, vsat (very small aperture terminal) satellite internet is about the only way to obtain decent internet speed. Over the last two years or so many companies have advertised about upcoming solutions to this issue...after all, the business internet industry is huge and growing by giant leaps each year and there are potential profits out there.

Let's take a look at what is currently available and what is on the way:

Available Ku Band Enterprise Systems

This is a "catch all" phrase covering the more expensive equipment and service offered by several large uplink comapnies. It is characterized by larger satellite dishes (typically 1.0 meter or larger), more powerful transmitters (at least 2 watts) and less populated transponders than the "residential" or "small business" setup's available from Direcway, Starband and Wildblue. The result is more consistent, faster service.....what most businesses expect.

There are two general avenues you can take regarding speed and throughput: Shared or dedicated bandwidth - and the difference in price is staggering. For most business applications, shared bandwidth (the less expensive choice) will work fine - giving a company 1.5 kbps downloads and 256 kbps uploads over 90% of the time for prices in the $400-$1500 range. The crucial element of ANY offering is the "contention ratio" - how much they oversell the product or the number of concurrent users they allow on a transponder. Any company that does not put the ratio in writing is not worth doing business with - period...and any company with a contention ratio above 20-1 is not offering you true Enterprise service. With dedicated service (Guaranteed speeds) you will spend over $1,900 per month (up to several thousand per month), but will have service that is nearly bulletproof.

The most tested and dependable Enterprise setup available today in N. America is centered around a modem designed by iDirect Technologies http://www.idirect.net. This is a proven system that will give you what you pay for.

Other systems are coming into the marketplace like the ViaSat Surfbeam DOCSIS setup and another DOCSIS product from Telnor; however, this is very new technology and certainly qualifies as "Bleeding Edge". Only three companies have the equipment to make it work right now and there are bumps in the road. Surfbeam and Telnor's big promise is a better utilization of available ku bandwidth, but no field results have confirmed this yet to my knowledge.

If it provides similar speeds during field testing, it will force iDirect to rethink modem pricing as the DOCSIS setup can be installed for about $500-$1,000 less.

Wireless and Satellite Internet Technology On The Horizon

The Satellite Internet world could be turned on it's head in the coming years as WIMAX emerges. It is a grand plan by Intel and others to cover very large areas of the world with a brand of microwave technology capable of sending data extremely fast to small antennas at homes and businesses. The big difference between WIFI and WIMAX is the distance covered by the main antenna.....the claim is 15-30 miles! Talk about bleeding edge....many of the "Big Boys" including Nokia and Cisco have abandoned plans to invest in it and speak of it as a bad business model to try to replace DSL. They point out that there are currently over 15 "standards" for the technology, not exactly a harmoneous start!

Ka band satellite internet for Enterprise has some real promise. The ability to "reuse" bandwidth, if the concept works, will enable companies to have T1 speeds or greater at any business location for much less than a T1 cost. A unit of SkyTerra Communications - the company managing Hughes Network Systems now, is working on advanced ka band spot beam technology to that end.

The greatest challange facing the satellite internet industry during the next 24 months is figuring out how to make profit.....in the absence of someone finding a business model that can show consistant profit, all of the transponder space allocated to internet will quickly be redeployed to HDTV or other types of profitable communication....bet on it!