Satellites emerge as broadband option

Satellites will emerge as a global option for broadband Internet and television services, edging past digital subscriber line (DSL) and gaining on cable modems through 2007, according to a new report.

Broadband satellite service will be more widely available starting in 2002 and demand, particularly from rural areas, is expected to push the fledgling market to 39.6 million subscriber homes by 2007, trailing cable modems, which are expected by Pioneer Consulting to be in 46.78 million homes by then.

While Pioneer analyst Scott Clavenna doesn't expect satellite to unseat cable modems for top place in the broadband access arena, satellite is more akin to the Internet and likely to draw online users who don't have reliable high-speed access from telephone companies or cable providers.

"It matches the ideals of the Internet in a way and I think that's what gives it this advantage in the long term," Clavenna said. "It's global. Access to it is non-discriminatory in a way. You don't have to wait for your telephone company or your cable company to build out to you. You just have to buy the dish."

The costs for buying a dish and receiving monthly service, which is likely to be offered in a bundled package including Internet and digital satellite TV, will be driven by the market, he predicted.

Satellites also have the advantage of allowing for more localised Internet content, making for a more global network than is currently available because so many sites are US based.

"Satellites do a much better job of redistributing content globally," Clavenna said.

Besides residential use, satellites will be a viable option for companies that have multiple offices and remote users, particularly in locations where DSL services aren't offered, according to Pioneer, which is based in Cambridge, Massachusetts. Users will be able to buy satellites offering various access speeds and that tiered approach also will be taken with how services are offered.

"Satellites don't obliterate all other technologies," Clavenna said, noting that cable modems are expected to dominate the global broadband market, "but they're much more than niche player."

While the Pioneer study intentionally set out to project broadband satellite use, a separate report from DataQuest predicts that the global cable modem market will grow 130 per cent this year.

Pushed by use in North America, cable modem shipments will amount to 79 per cent of the world's high-speed access market by the end of the year, according to the report, which forecasts 492,000 unit shipments in 1998 compared to 214,000 in 1997.

In 2002, cable modems shipments will top 2.4 million units worldwide, with half of the shipments in North America, said DataQuest.

Issues over standards have been largely resolved and so cable modem shipments are expected to jump during the first quarter of next year.

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