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RURAL WINGS Deliverable
WP2: Feasibility Study
SYNTHESIS - FEASIBILITY REPORT
Project Astrium, ICCS, Avanti, Hellas
FP6-IP 516161 Editing:
Reference: Sat, Eutelsat
Code: D 2.3 Approved by: <Review Committee>
Version & Date: V2.1, 26/09/2007 Process Owner: Astrium
Short Description:
The D2.3 deliverable (Synthesis – Feasibility Report) is the major outcome of the RW Feasibility Study
(WP2) that addresses technical and financial issues relevant to the overall viability of the use of advanced
satellite networks and infrastructure as introduced by the RW project:
The present version is an update of the initial document taking into account the EC Reviewers‟ comments
provided during the first RW Review.
The first part of the document presents a brief roadmap of the work carried out in WP2 up to now
as well as a technical review of the RW user needs. It attempts to correlate this work with the basic
outputs of WP3 in respect to the user needs and the user profiles in order to assess whether these needs
have been properly translated into technical requirements and therefore adequately addressed from the
technical solutions and the bandwidth profiles proposed by the project.
The second part of the document investigates the technical feasibility by identifying and analysing
possible broadband solutions, particularly based on hybrid satellite wireless technologies, to assess their
suitability with respect to the user requirement of the selected sites.
In a third part the report addresses financial feasibility issues. It analyses the business viability of RW
solutions proposed by satellite service providers through their broadband business models for two-way
satellite networking services. Cost factors related to satellite and terrestrial bandwidth, infrastructure,
marketing and financing levels of service pricing, have been investigated by each satellite service provider
involved in the project (AVANTI, EUTELSAT/TTSA and HELLAS SAT).
Finally the report concludes with a synthesis assessment of the overall viability of the use of satellite based
broadband solutions in order to meet RW requirements and objectives.
List of Recipients:
Authors: T. Barker (Avanti), T. Lohrey (Eutelsat), Yoani Matsakis (TTSA), Constantinos Kassianides (Hellas
Sat), Michael Gargalakos (ICCS). M. Zapata, L. Thomasson, A. Isoard, B. Durin, G. Verelst (ASTRIUM)
+ Rural Wings consortium + EC
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DOCUMENT CHANGE LOG
Issue/
Date Modified pages Observations
Revision
1.0 15/02/2007 Initial document
Update following comments at annual
2.0 31/07/2007 All sections
review
Update following comments of Rural
2.1 26/09/2007 All sections
Wings QA Review and WP3 Leader
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EXECUTIVE SUMMARY
The D2.3 deliverable (Synthesis – Feasibility Report) is the main outcome of the RW Feasibility
Study (WP2) and addresses technical and financial viability issues related to the use of advanced
satellite networks and infrastructures by the RW project.
The user needs and the user profiles as expressed in the final report of WP3 (D3.1) have been
analysed based on past experience coming from other market studies and similar research
projects in order to assess the current broadband development situation of candidate RW pilot
sites and derive a general bandwidth profile per learning hub.
RW communities already identified are small, isolated, economically underdeveloped (means
with limited financial resources), scarcely populated but with the same expectancy levels of
broadband service as in urban areas, especially for service pricing. Therefore flexibility,
scalability, easy implementation and cost efficiency are the key success factors for candidate
broadband solutions.
The user needs of these rural communities, as expressed in WP3 (Task 3.1), have been turned
into technical requirements and this has been reported in the D2.1 deliverable. This led to the
definition of the best broadband solution and services to be implemented for the RURAL WINGS
sites as this has been also described both in D2.1 and in D2.2
The technical feasibility analysis has led to conclude that satellite DVB/RCS broadband solutions
combined with a last mile wireless access network are the best answer to build the RW technical
solution. DVB-RCS satellite standard, that was the project‟s primary choice, is confirmed as the
best satellite technology to be adopted by the project to guarantee long term viability of
broadband networks deployed in RW validation sites.
No doubt also that WiFi is a standard wireless technology that the project can easily adopt with
a minimum risk and that enable cost efficient hybrid broadband infrastructure. Based on the
previous experience gained through trials or pre-competitive projects, sustainability of hybrid
satellite wireless for isolated rural communities has been demonstrated. Nevertheless technical
issues regarding architecture of networks (wireless coverage area) and their operation, quality of
service and bandwidth management have to be carefully investigated for each category of sites
and user communities selected by RW.
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In the third part of document, financial and business viability of RW solutions is addressed. A
market analysis shows that, under conservative assumptions, estimates of total market size for
satellite broadband solutions are sufficient for a commercially viable business.
The challenges for Satellite Service Providers are to get bandwidth and hardware prices to
acceptable levels. A strong focus on innovative ways of delivering connectivity and content is key
to success. Partnerships with bandwidth providers to make available low cost satellite capacity
will achieve this goal combined with expected increased sales and reduced cost in the DVB RCS
equipments.
Then a detailed view of the business model is provided by each Satellite Service Provider
involved in the RW project (AVANTI, EUTELSAT/TTSA and HELLAS SAT).
Based on the strong experience gained through several trials Avanti has a positive view about
the sustainability of its satellite Internet services. Nevertheless the sustainability of the project‟s
educational applications is more unclear for Avanti. Eutelsat is convinced that with their D Star
portfolio services all possible applications requested within the Rural Wings project will be
feasible to carry out. TELEMEDICINE TECHNOLOGIES (TTSA) distributor addresses the
fundamental issue of appropriate sizing of the required satellite bandwidth that is a key
component of the final price of services delivered to the end-users. For HELLAS SAT the
broadband satellite service market is fairly new but it is expected that the implementation of
hybrid satellite wireless solution will give the opportunity to tailor services to needs and to
optimize the cost for end-users.
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Table of Content
1. Introduction .................................................................................................. 11
1.1 Context ................................................................................................................. 11
1.2 Feasibility Report purpose and structure .............................................................. 11
2. Documentation ............................................................................................. 13
2.1 Applicable Documents .......................................................................................... 13
2.2 Reference Documents .......................................................................................... 13
2.3 Other Sources of Information ............................................................................... 14
2.3.1 Projects ......................................................................................................... 14
2.3.2 Study Reports ................................................................................................ 15
3. Technical review of the RW User Needs .................................................... 17
3.1 Review of the available input from WP2 and WP3................................................ 17
3.2 General assessment of RW validation sites selection............................................ 19
3.3 Country broadband development profiling vs RW site sustainability .................... 22
3.4 Technical services requirements definition ........................................................... 23
4. Technical feasibility assessment ................................................................ 28
4.1 Two-way broadband satellite solutions................................................................. 28
4.1.1 Assessment of DVB-RCS-based solutions ...................................................... 28
4.1.2 Assessment of Alternative DOCSIS Standard ................................................ 30
4.2 Local area network ............................................................................................... 31
4.2.1 Added value of local loop extension .............................................................. 31
4.2.2 Assessment of different last mile solutions.................................................... 34
4.3 Preliminary end-to-end network architecture considerations ................................ 36
4.3.1 Wireless Local Loop ....................................................................................... 37
4.3.2 Quality of Service .......................................................................................... 41
4.3.3 Deployment/exploitation/scalability requirements ......................................... 43
4.3.4 Next steps and further work .......................................................................... 43
5. Overview of Satellite Broadband Market ................................................... 44
5.1 Introduction .......................................................................................................... 44
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5.2 Market Background............................................................................................... 44
5.3 Market Analysis .................................................................................................... 45
5.3.1 Demand forecast ........................................................................................... 46
5.3.2 Demand mapping .......................................................................................... 53
5.3.3 Entry markets ................................................................................................ 55
5.3.4 Conclusion ..................................................................................................... 55
5.4 Terrestrial Infrastructure Competition Analysis .................................................... 56
5.4.1 Terrestrial Infrastructure Solutions ................................................................ 56
5.4.2 Terrestrial infrastructure SWOT Analysis ....................................................... 63
5.4.3 Conclusion ..................................................................................................... 63
6. RW SSP Broadband Business Modelling .................................................... 66
6.1 Avanti Broadband Business Modelling .................................................................. 66
6.1.1 Service Offering ............................................................................................. 67
6.1.2 Cost and Price Structure ................................................................................ 70
6.1.3 Service Partnerships ...................................................................................... 77
6.1.4 Sale strategy ................................................................................................. 82
6.1.5 Risk Analysis .................................................................................................. 85
6.1.6 Conclusion ..................................................................................................... 88
6.2 Hellas Sat Broadband Business Modelling............................................................. 89
6.2.1 Market Assessment ....................................................................................... 89
6.2.2 Service Offering ............................................................................................. 96
6.2.3 Cost and Price Structure ................................................................................ 99
6.2.4 Risk Analysis ................................................................................................ 105
6.2.5 Conclusion ................................................................................................... 111
6.3 Eutelsat, SKYLOGIC and TTSA Broadband Business Modelling ........................... 112
6.3.1 EUTELSAT/SKYLOGIC vs. TTSA ................................................................... 112
6.3.2 SKYLOGIC Service Offer ............................................................................. 116
6.3.3 Costs and Prices Structure........................................................................... 120
6.3.4 A Generic Business model for D Star ........................................................... 121
6.3.5 TELEMEDICINE TECHNOLOGIES Risk Assessment ...................................... 125
6.3.6 Conclusion ................................................................................................... 126
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7. “Pre-commercial” and Trials ..................................................................... 129
7.1 TWISTER ............................................................................................................ 129
7.1.1 The TWISTER project .................................................................................. 129
7.1.2 Major Project Achievements ........................................................................ 130
7.1.3 TWISTER Key Findings ................................................................................ 133
7.2 Broadband Access for Rural Regeneration Using DBV-RCS (BARRD) ................. 142
7.2.1 The BARRD Project ...................................................................................... 142
7.2.2 BARRD Key Findings .................................................................................... 145
7.3 INSPIRE .............................................................................................................. 147
7.3.1 The INSPIRE Project ................................................................................... 147
7.3.2 INSPIRE Key Findings.................................................................................. 148
7.4 ZEUS Project....................................................................................................... 149
7.4.1 Description of the ZEUS approach ............................................................... 149
7.4.2 Experiences for the implementation of the ZEUS project in Greece ............ 150
8. Conclusions ................................................................................................. 152
Appendix 1: List of Abbreviations and Acronyms.............................................. 156
Appendix 2: RW Answers to EC Reviewers’ Comments ................................... 158
EC Reviewers‟ Comments .............................................................................................. 158
General EC Reviewers comments on WP2 and D 2.3 ............................................. 158
Detailed EC Reviewers comments on D 2.3 ............................................................ 159
D2.3 Updates w.r.t. EC Reviewers‟ comments .............................................................. 160
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List of Figures
Figure 1 : General architecture of the whole system ................................................. 36
Figure 2 : Generic point-to-multipoint configuration .................................................. 37
Figure 3 : Generic wireless client installation ............................................................. 37
Figure 4 : Typical achieved distances in TWISTER ..................................................... 38
Figure 5 : Bandwidth Sharing ..................................................................................... 42
Figure 6 : Available SME Market - Baseline Scenario.................................................. 52
Figure 7: 24-Hour Activity Factor - Residential and SoHo (Left) an SME (Right)........ 53
Figure 8 : Residential demand (thousands) for 2007 ................................................. 54
Figure 9 : Residential demand (thousands) for 2010 ................................................. 54
Figure 10 : WiFi Hotspots in UK ................................................................................. 61
Figure 11: Relative Demand Capture by Price – Avanti .............................................. 75
Figure 12: Intelsat Satellite Coverage – Dish Sizes .................................................... 78
Figure 13: Hylas Coverage ......................................................................................... 79
Figure 14 : The Target Countries of South Eastern Europe for Hellas Sat ................. 89
Figure 15 : Hellas Sat coverage areas (EIRP) ............................................................ 90
Figure 16 : Hellas Sat Internet Service Provision Models ........................................... 97
Figure 17 : Weighted Average Cost Structure Breakdown ......................................... 99
Figure 18 : Example hybrid satellite-wireless installation at a camping ................... 104
Figure 19 : Eutelsat vs. TTSA positioning in the value chain .................................... 112
Figure 20 : Geographical distribution of TWISTER validation sites ........................... 131
Figure 21 : Broadband access solutions after the TWISTER project ........................ 131
Figure 22: BARRD Trial Sites .................................................................................... 144
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List of Tables
Table 1 : RW Applications and Traffic Profiles............................................................ 25
Table 2 : Correspondence of user profile categories .. Error! Bookmark not defined.26
Table 3 : CPE cost indications from two different network integrators ...................... 39
Table 4 : Wireless Network Infrastructure Costs ........................................................ 40
Table 5 : Backbone Equipment Costs ......................................................................... 40
Table 6 : Available Residential Market – Baseline Scenario ........................................ 46
Table 7 : Available Residential Market – Baseline Scenario ........................................ 47
Table 8 : SOHO /Teleworking Statistics ..................................................................... 48
Table 9: Available SOHO/Teleworker Market - Baseline scenario ............................... 49
Table 10 : Available SOHO Teleworker Market - Baseline Scenario ........................... 49
Table 11: SME Statistics ............................................................................................. 50
Table 12: Broadband in Enterprise ............................................................................. 51
Table 13: Available SME Market - Baseline Scenario .................................................. 52
Table 14: SWOT Analysis - Terrestrial Infrastructures ............................................... 63
Table 15 : Satellite infrastructure SWOT analysis ...................................................... 64
Table 16 : Indicative Costs of Satellite Infrastructure ................................................ 72
Table 17: GDP per Capita for Europe ......................................................................... 76
Table 18: Estimated SOHO Tariff Across Europe from Launch to 2020...................... 77
Table 19 : SWOT Analysis – Avanti ............................................................................ 86
Table 20 : Demographic Overview in Hellas Sat Target Areas ................................... 90
Table 21 : Existing Telecom Infrastructure In Hellas Sat Target Areas ...................... 91
Table 22 : Education Market for Satellite Broadband ................................................. 95
Table 23: HELLAS SAT Net! initial offerings ............................................................. 101
Table 24 : SWOT Analysis – Hellas Sat .................................................................... 105
Table 25 : Eutelsat/Skylogic portfolio of fixed interactive network services ............. 116
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Table 26 : IP Access Characteristics ......................................................................... 117
Table 27 : Satellite related facilities capital expenditure .......................................... 122
Table 28 : Satellite related facilities capital expenditure for additional transponder 123
Table 29 : Satellite related facilities operational expenditure ................................... 123
Table 30 : Detailed business plan for RW service .................................................... 124
Table 31 : Basic business costs ................................................................................ 125
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1. Introduction
1.1 Context
The RW project was proposed in full compliance with the work-programme of the FP6
Integration Program (IP) – Priority 4, “Aeronautics and Space”. The primary strategic
objective addressed is the “End-to-end satellite telecommunication systems for tele-education
applications”, while the secondary strategic action is the “Market assessment and cost
benefits”.
RW is an ambitious project that proposes to develop an advanced learning platform through
satellite access technologies, promoting a user-centred methodological approach which
constitutes its major innovation.
1.2 Feasibility Report purpose and structure
The D2.3 deliverable (Synthesis – Feasibility Report) is the major outcome of the RW
feasibility Study that addresses all the issues relevant to the overall viability of the use of
advanced satellite networks and infrastructure as introduced by the RW project.
The D2.3 (Synthesis – Feasibility Report) document is structured as follows:
• Section 2 provides a complete list of applicable and reference documents. Other
sources of information, either projects similar or related to RW, or study reports which
have been used to write this document are also provided.
• Section 3 presents a brief roadmap of the work carried out in WP2 up to now as
well as a technical review of the RW user needs. It attempts to correlate this work
with the basic outputs of WP3 in respect to the user needs and the user profiles in order
to assess whether these needs have been properly translated into technical requirements
and therefore adequately addressed from the technical solutions and bandwidth profiles
proposed by the project.
• Section 4 investigates the technical feasibility by identifying and analysing possible
broadband solutions, particularly based on hybrid satellite wireless technologies, to
assess their suitability with respect to the user requirement of the selected sites.
• Section 5 provides an overview of broadband satellite market and its sustainability
w.r.t. to terrestrial infrastructure competition.
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• Section 6 investigates the financial feasibility of RW solution w.r.t. the strategic and
business modelling approaches of each of the three Satellite Service Providers of the
project (AVANTI, EUTELSAT/TTSA and HELLAS SAT).
• Section 7 provides relevant inputs from “pre-commercial” or trial projects that
gained expertise in deploying similar satellite solutions in rural areas.
• Finally, Section 8 concludes with a global assessment of the overall viability of the
use of advanced satellite networks and infrastructure as introduced by the RW project
Appendix 1 provides a list of the Abbreviations and Acronyms that are used in the
document.
Appendix 2 is a section dedicated to give traceability between EC Reviewers comments
given after the first RW Review meeting and corresponding actions taken by the project to
deliver a new version of this document.
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2. Documentation
2.1 Applicable Documents
The applicable documents for this present report are listed below:
Item Title
AD01 RW Revised Technical Annex I – Description of Work M13-M30
AD02 WP2 D2.1: Available and Planned Applications and Satellite Scenarios definition report
AD03 WP2 D2.2: End-to-end satellite System Architecture; High level definition and adaptation
AD04 WP3 D3.1: User Needs Analysis and User Profiles report
2.2 Reference Documents
The reference documents for the present report are listed below:
Item Title
SIBIS Pocketbook 2002/2003, Measuring the Information Society in the EU, the EU Accession
RD01
Countries, Switzerland and the US
RD02 SMEs in Europe Candidate countries, Eurostat ,2003 edition
RD03 Enterprises in Europe - does size matter?, Eurostat , October 2002
RD04 Internet Usage by individuals and enterprises. Eurostat, October 2002
RD05 Broadband Satellite Services market, Frost & Sullivan, 2001
ETSI EN 302 307 (V1.1.1), Digital Video Broadcasting (DVB); Second generation framing
RD06 structure, channel coding and modulation systems for Broadcasting, Interactive Services,
News Gathering and other broadband satellite applications, March 2005
ETSI EN 300 421 (V.1.1.2), Digital Video Broadcasting (DVB); Framing structure, channel
RD07
coding and modulation for 11/12 GHz satellite services, August 1997
ETSI EN 301 790 (V1.4.1), Digital Video Broadcasting (DVB); Interaction channel for satellite
RD08
distribution systems, March 2006
ETSI TR 101 790 (V1.2.1) , Digital Video Broadcasting (DVB); Interaction channel for
RD09
Satellite Distribution Systems; Guidelines for the use of EN 301 790, January 2003
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2.3 Other Sources of Information
Additional Project/studies that are valuable sources of information about satellite internet
markets and that have been partly used in this document are listed below.
2.3.1 Projects
Project Sponsor/Year Description
EADS Astrium project provided 105 rural areas throughout various
European countries with hybrid satellite solutions. TWISTER
TWISTER EC, 2004-2007 demonstrated the technical and commercial sustainability of such
satellite based systems and more than 40% of sites are currently
continuing with satellite.
This study investigated the key commercial, technical and political
issues for the development of affordable satellite broadband services in
STRAND BNSC, 2005 Europe. The study assessed the demand profile for broadband services
in rural areas, with small and conventional satellite solutions and
demand- and policy- driven deployment scenarios:.
SMM looked at a proposed constellation of satellites to deliver
SMM broadband internet services to European markets that cannot access
terrestrial infrastructure. The study examined technical and cost drivers
(Scalable ESA, 2005 from space and ground segments, issues surrounding operation of the
MultiMedia system and business cases. Various scenarios were considered to cost
System) -affectively satisfy the requirements of European SMEs, home workers
and residential users.
A parallel study to SMM, carried out independently by a different
SMM (2) ESA, 2005
consortium, for comparison purposes.
DDSO (Digital This EADS Astrium study assessed how satellite could best be utilised
Divide Satellite ESA, 2004 to help bridge the „digital divide'. It encompassed a European-wide
Offer) market needs analysis, including user and service definitions.
Avanti‟s BARRD project provided 20 rural UK sites with Internet access
BARRD ESA, 2004
using RVB-RCS/WiFi.
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2.3.2 Study Reports
Study Sponsor/Year Description
Report from the South West Regional Authority in Ireland
(which is considered similar to the UK) that carried out:
A nationwide user survey to examine different types of
satellite broadband users and the range of applications
being employed by them. Users covered individual home
users, SMEs, tele-workers, SoHos, and users within the
PERISCOPE ESA, 2005 community, education and public domains. The survey
was complemented by follow-up, in-depth focus groups
and a number of illustrative case studies.
An industry and service provider study that analysed
likely short/medium-term developments taking place in
Satellite Broadband Technologies and evaluated how
such developments will impact the demand for satellite
broadband by different sectors and users.
Report on the awareness, understanding, ownership, use and
Consumer Panel [1]
OFCOM , 2005 satisfaction with digital communications in UK regions.
Research
Compares rural regions with dense urban and UK average.
Internet Usage by Report from the ICT household and enterprise surveys run by
Individuals and Eurostat, 2005 Eurostat, including the rate of take up of this technology and
Enterprises 2004 the use made of ICTs, across Europe.
Report from the Point-Topic consultancy, from a twice-yearly
Broadband User Point-Topic,
survey of 2000 households and 800 workplaces on the
Survey UK 2005 2005
demands for, and usage of, broadband in the UK.
Report from the Analysis consultancy. Examines the market
Sophisticated
DTI, 2005 for sophisticated broadband services across the G7, Australia,
Broadband Services
Ireland, South Korea and Sweden.
UK Broadband Report from the OVUM consultancy. The latest in an on-going
DTI, 2005 series of quarterly updates on the current state of the UK
Status Report
broadband market and its likely development over the next
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Study Sponsor/Year Description
ten years.
Cost Benefit
Report from PriceWaterhouseCoopers that considers the use
Analysis For
of space-based technologies to help bridge the „digital divide'.
Broadband ESA/EU, 2004
Contains a number of country and region profiles from
Connectivity in
Europe.
Europe
Report from USC Annenberg. The fourth annual survey of
Center for the
The Digital Future attitudes to, usage of, and trends in internet access. Whilst
Digital Future,
Report focusing on the USA there is now a European version of the
2004
report.
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3. Technical review of the RW User Needs
3.1 Review of the available input from WP2 and WP3
A review of the current situation in terms of available services and infrastructure for the
provisioning of the advanced broadcasting and telecommunication applications/services of all
countries participating in RW project has been carried out within WP2, D2.1 deliverable.
To this respect D2.1 has used as a source document the D3.1 (User Needs Analysis) and
especially the description of the user profiles and the sites that have been selected for the 1st
phase of the implementations.
Taking into consideration the work carried out within the framework of WP2 so far, one of
the basic objectives of the feasibility study has been to review the basic user profiles and
needs presented per country and try to investigate whether these user needs lead to feasible
technical solutions that can be implemented by the project. In parallel there was also an
attempt to analyze these needs adopting a more technical and market oriented approach in
order to answer briefly to some fundamental questions:
1. What is the basic ICT situation and broadband penetration in each of the
RURAL WINGS participating countries? How the broadband penetration in rural areas
affect the policy of each country and what are the consequent implications for the
RURAL WINGS project?
2. How does geographical morphology affect the rural development in each country
and the relevant ICT penetration? How must RURAL WINGS adapt its pilot sites
selection and implementations to this indisputable reality?
3. What are the basic categories of users identified in each country and what are the
fundamental associated user needs?
4. To what extend the selected sites are representative of the ICT situation in each
country‟s rural areas?
5. Are the initial pre-assumptions for the sites distribution per country and category of
users still valid and if not how this situation can be reversed in the second round of
implementations?
6. What are the business perspectives of the satellite in each country (this question is
further elaborated in section 6 of this document)?
7. In which cases is the combination of satellite and last mile broadband terrestrial
networks proposed and what are the criteria for the relevant selection?
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The answer to the above questions is basically “hidden” in the exhaustive analysis of D3.1
(questions 1-5) and the first deliverable of WP2 (D2.1) has tried to summarize and encode all
this information by using a more technical oriented approach. In addition D2.1 has further
elaborated on this series of questions by focusing more on their technical aspects (e.g.
question 7). From the other hand D2.3 being the concluding document of WP2 is going one
step further trying to show that the answer to all of the above questions is actually the key
that will define the feasibility of the selected technical solutions per site and country, the
compliance of the user needs and the user profiles identification with the general objectives
of the RURAL WINGS project, and the validity of the project‟s initial assumptions in terms of
site distribution and technological solutions up take.
In spite of the difficulty to address globally all the above questions, the analysis per country
that has been carried out in D3.1 has enabled to provide a general but concise overview of
the situation in each country and consequently to be able to better understand the next steps
of the project which are the definition of the technical solutions that will be implemented in
each country/site, the deeper site selection criteria and the targeted user scenarios that will
be carried out during the first round of the implementations.
Finally it should be noted that D2.3 may be the final document of WP2, but it is not the final
step in the chain of defining the business perspectives of the RURAL WINGS approach. As we
have said D3.1 (User Needs Analysis) has defined the basic needs of the RURAL WINGS
users. D2.1 and D2.2 have elaborated on these needs in order to draw the associated
technical requirements and define the most suitable preliminary architectures that could fulfil
these needs. D2.3 is going a step ahead by adding the “cost” factor to the proposed
solutions. This is very important because the analysis made so far has led to the conclusion
that the user needs identified can be backed up by feasible technical solutions, but the
financial aspect of these solutions had not been examined. So D2.3 apart from reviewing the
technical feasibility of the proposed solutions, is contributing towards the examination of
their financial viability by presenting the approach of each RW satellite operator for the
market penetration in Europe‟s rural areas. It is evident that this work can not be completed
at this stage of the project, since the RURAL WINGS service has not been formulated and
tested and therefore the work carried out for D2.3 will be continued in ongoing work
packages. In the framework of WP5 (Adaptation of Platform and Tools) the end-to-end
network architecture will be further refined and updated taking into account the feedback of
the Phase A usage evaluation test runs as well as additional system design and validation
work at test bed level. This will be reported in an updated version of deliverable
D2.2(=D5.1).In the framework of WP8 (Market Analysis) the detailed market strategy and
the business perspectives of the RURAL WINGS solution will be defined.
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3.2 General assessment of RW validation sites selection
The main criteria used for the selection of RW validation site were:
a) Its digital divide compared with the rest of the country and the absence of broadband
services of any kind
b) Its physical and geographical isolation and any associated severe climatic conditions that
enhances the criteria a)
c) The forecast that the roll out of broadband terrestrial networks of any kind is not
probable in the short term and also not cost effective in market terms.
d) The identification of a need for having a broadband access. This need can be for
improving the economical, societal or cultural development of the considered community
or any other reason, but if the broadband access does not bring any visible value to, and
is not awaited by the end users, there is no chance that it will be adopted and used.
So if the choices of sites made so far are carefully reviewed and examined (based on the
sites description of D3.1) it could be stated that the following general characteristics apply to
most of the cases:
• Small physically isolated communities, mainly mountain or island communities.
• These communities are not only physically isolated (cases of Greece, Estonia, Romania,
Poland) but they are also economically underdeveloped. Economic activities in these
areas are poor and local population is struggling to remain to its home land.
• In some cases and for a significant period of time during the year, the climatic
conditions are very severe and make the physical connection of these communities with
the rest of the world very difficult (e.g. the islands of Greece and Estonia, Sweden etc.)
• The population is scarce and may significantly vary from period to period (between
summer and winter in small isolated tourist islands) and its financial capacity is very
limited. This fact forbids any private initiative for the roll out of broadband services since
the expected gain from the usage of any type of broadband services from the local
population is very small and cannot in any case cover the investment that will be made.
Public investments from the other hand are usually made by governments using
population criteria. This means that a government may set a population criteria for the
ADSL coverage of the 95% of the permanent population of a region or a county, but in
some cases like Greece or Sweden where a small percentage of the population may be
distributed in very small villages, communities or isolated residences covering very large
geographical areas, this criteria may result in a significantly less geographical coverage of
the region or the country.
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Based on the above characteristics it is evident that the selected RW sites have very little
chances to raise their digital divide by using terrestrial networks that will be deployed
through private initiatives or by their governments because they do not fulfil the market
criteria or the population criteria that are usually posed for the selection and deployment of
these types of networks. So the only chance for these sites to bridge the digital gap with the
rest of their country and the rest of Europe is to rely on their own forces and take up local
initiatives.
In this case the most important fact that should be considered prior to the implementation of
any solution is the cost factor. As we have already said, these types of communities have
very limited financial resources. People that are usually struggling for their day to day
economic survival are very reluctant to pay money for services that are considered by them
as a luxury compared with other services that may be more essential for their survival (water
and power supply, increased costs for travelling to the country‟s regional capitals etc.).
So in these cases any technical solution that will be selected must be flexible, easy to
implement and maintain and above all cost effective. The initiative must be taken in any case
by the local authorities who will make the initial investment and will try to demonstrate to the
local residences the added value of a broadband network and persuade them to take up part
of the costs in the long term and secure by this way the viability of the implemented
technical solution.
In addition to the above another issue should be also highlighted. The D3.1 deliverable has
provided the user profiles per RW country. These profiles are general descriptions of the
candidate rural users in each country and they represent the current status in this field. D3.1
had also provided an analytical description of the 1st phase selected sites that comply with
the above mentioned user profiles. So, since the user profiles analysis is general and
representative of the rural situation in each country it is logical to assume that the sites that
will be selected for the next phases of the RURAL WINGS project will have more or less the
same characteristics with the ones already chosen and therefore what has already been
concluded for them will be also valid for the majority of the rest.
Taking into account all the above it is evident that any terrestrial solution acting
as the backbone broadband network is not viable because the associated
investment cannot be born by a small community. So for our case all the selected
sites (and those that will be selected in the future in terms of the next phase
implementations) are ideal for a satellite broadband connection.
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The cost for the connection of these sites with any standard ADSL backbone network is
excessively high if we take into account their geographical and morphological isolation and
therefore it will not be easily undertaken by any private company or government in the
foreseen future. On the other hand satellite networks are already covering every possible
geographic area anywhere in Europe with the small cost of the installation of the satellite
terminal (e.g. around 1200-1400 euro/terminal referring to 2005 prices) and providing
immediately any kind of broadband service with a reasonable monthly fee (e.g. around 300
euro for 1Mbit/512kbit download/upload rate).
This cost as we have said may be too much for a single house residence to pay, but it is
easily bearable by a local community. The use of WiFi or any equivalent wireless local area
network could serve this purpose by sharing the access among the different community
members. The community can cover this cost by its own budget or alternatively since this
cost is relatively small and contributes to the objective of the bridging of the digital divide,
communities can also use regional, national or European initiatives that fund these types of
small scale local investments.
RW project can contribute by installing, maintaining and operating for a fixed period of time
(18 months) a typical satellite broadband connection in order to demonstrate its added value
to the local residence through a bouquet of selected applications that have been customized
to their needs. In this way the local authorities will be offered not only the funds but also the
technical know how and the appropriate applications that will make the offered broadband
satellite service appealing to the eyes of the local community. Consequently, after the end of
the project the community will be more easily persuaded to take up the cost for the
maintenance of the service.
Concluding from the user needs analysis and the site selection procedure it can be
deducted that for the selected RW sites the satellite broadband connection seems
to be the only viable solution that can be easily and immediately implemented
and offer broadband services with a relatively small cost.
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3.3 Country broadband development profiling vs RW site sustainability
From the analysis that was carried out it was made evident that the RW participating
countries can be mainly separated in three different categories:
• The first category includes countries that are clearly and beyond any doubt digitally
deprived and for this reason many or almost all of the rural areas in these countries can
be initially regarded as RW potential sites. These countries are Greece, Cyprus,
Romania, Poland and the two new countries that have just entered the project as end
users i.e. Armenia and Georgia.
For these two latter cases, although the user needs profiles are currently being created,
it is more than evident from the general knowledge of their broadband status that are a
clear target for the RW implementations. Indeed Armenia and Georgia have passed
through a significant change of their political and economic system during the 1990‟s.
However they still have significant developments to undergo to achieve at least basic
access to broadband services. Furthermore in both countries because of geographic and
extreme climatic conditions (Caucasus region) the concept of “rural region” is valid in
large areas. Concluding it is foreseen that for the above mentioned countries the
deployment of the RW sites will be fully competitive with their current status of the
broadband penetration, and therefore these countries should be clearly prioritized in the
case that a site re-allocation is decided.
• The second category includes countries that are around the EU25 mean values for
broadband penetration and for this reason these countries can also be added to the pool
of the RW end users provided of course that a careful site selection has been made in
order to avoid cases in which the satellite will not be competitive. These countries are
Spain, Estonia and Israel. The basic common characteristic of these countries is that
they are rapidly converging with the most well digitally developed northern EU member
states, but the user needs analysis and the site survey carried out from their National
Coordinators has revealed rural areas and categories of users that are still digitally
isolated and thus can be perfect candidates for our project.
In the case of these countries special consideration should be given to the mid term roll
out of the terrestrial broadband networks because due to their high rate of digital
convergence it is possible that some sites that will be now selected can be proved not
sustainable for the near future. Hence, special attention should be given to the 2nd phase
site selection and the end user group‟s identification.
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• The third category of countries includes “old” well developed member states, UK,
Sweden and France, in which the use of satellite is controversial due to the very high
penetration of terrestrial broadband networks.
For Sweden the site selection procedure and the related user needs analysis has
revealed critical problems connected with the cost effectiveness of the offered satellite
services and therefore for this country a great part of its sites has been proposed to be
re-allocated to other countries belonging mainly to the 1st category. France is also a
difficult business case for the satellite and the most appropriate solution would be to go
ahead with the first round of implementations as planned and re-evaluate the necessity
for retaining all of the French sites after the end of this phase.
For UK the initially foreseen sites will be kept for the whole duration of the project, since
there are special circumstances involved that are mainly born by the nature of the UK
national coordinator which is Avanti, a large commercial company and the project‟s third
satellite operator. For this reason all of the UK sites will be kept since they will be very
good cases for the testing of the interoperability of the project‟s various applications.
3.4 Technical services requirements definition
Based on past experience from the satellite market operation and from projects similar to
RURAL WINGS that are described in detail in section 7 of this document, five general
categories of user profiles can be identified:
• Institutional users: employees of institutional bodies such as town halls, public
libraries, schools, tourism offices, cultural houses, medical centres, etc.
• Business users: employees of private SMEs, cooperatives, farmers, health care
professionals.
• Remote home-workers/teleworkers: users needing to be connected to their
company through a dedicated connection at home.
• Residential users: rural citizens connected either through a public Internet access point
(kiosk) installed for instance at their town hall premises, or through a dedicated
connection at home.
• Guest users: in general, laptop users visiting the validation site in an occasional way,
connected through the intermediary of a hotspot access point.
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To this end and based on the above categorization, different contexts of use according to
user profiles in term of expected data rates have been analysed. A common need, identified
for all the user categories, is the fast Internet connection for Web browsing, Emailing and file
downloading. Nevertheless in regards to their specific usage of broadband communication,
each user‟s group requires different services, especially with respect to performance and cost
as summarised below:
User Profile Typical Applications Expected Data Rate download/upload
Web access/browsing
E-mail Basic offer : 512 / 128 kbps
Banking
SME Intermediary offer : 1024 / 256 kbps
Government (tax, VAT etc)
E-commerce / Order taking Advanced offer : 2048 / 512 kbps
Conferencing (audio/video)
School : 512 / 128 kbps; 1024/512
Web access/browsing kbps for video conferencing and
advanced tele-education applications
Email
Institutional users Access to learning resources
Town Hall : 512 / 128 kbps
Access to inter-institutional network
Doctor office : 256 / 64 kbps
Web based video and audio conferencing
Library : 256 / 64 kbps
Web access/browsing
Large file exchange
Remote VPN access / Access team Basic offer : 256 / 64 kbps
website
SOHO/Teleworker Intermediary offer : 512 / 128 kbps
Cooperative working on document or
data Advanced offer : 1024 / 256 kbps
E-mail
Conferencing (audio/video)
Web access/browsing
Basic offer : 128 / 32 kbps
E-mail
Residential users Online gaming Intermediary offer : 256 / 64 kbps
Chatting
Advanced offer : 512 / 128 kbps
Peer-to-peer sharing
Guest users Web access/browsing
Typical offer : 128 / 32 kbps
E-mail
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Table 1 : RW Applications and Traffic Profiles
An analysis of the bandwidth requirement and connectivity, led to the following bandwidth
profiles:
• Education
Collection of educational information, assess to E Learning sites – This action requires
classical Internet access shared between the users in the network.
Virtual Classroom, Videoconferencing or advanced tele-education applications (e.g.
access to multimedia content from remote telescopes and from science museums) –
these actions require dedicated bandwidth with a CIR (Committed information Rate) of
about 384 kbps upload for a reasonable le quality. In these cases the optimum bandwidth
for schools would be 1024/512 kbps.
• Involvement
Contacting government and public services – This action requires classical Internet access
shared between the users of the network. For content on local servers it is to consider to
connectivity of the local server to the Internet. If there are only a few site in question it
might be advisable to cash the sites at the NOC or locally.
Community initiatives/information and taking part in national initiatives - This actions
requires priority Internet access with a low contention rate between the users in the
network. The user may host its own Web site on a server behind the terminal or regularly
upload content to community servers hosing regional Web sites. In this case the terminal
needs to get a public IP address to be accessible from the Internet.
• Business and Research
Tourism, Economy opportunities - This action requires priority Internet access with a low
contention rate between the users in the network. The user may host its own Web site
on a server behind the terminal or regularly upload content to community servers hosing
regional Web sites. In this case the terminal needs to get a public IP address to be
accessible from the Internet.
Communication with research institutes and upload of scientific data - This action
requires priority Internet access with a low contention rate between the users in the
network. The user may have the capability to upload big data files or to stream videos.
• Communication
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Gathering of information around the world, access to global borderless information. This
action requires classical Internet access shared between the users in the network.
As we have already mentioned the above categorization and the associated bandwidth
figures is general and is based on previous experience from market studies and other
relevant satellite research projects. The RURAL WINGS project has done a very thorough and
detailed analysis in WP3 and has identified more precisely the categories of users to which
the RURAL WINGS application will be addressed to during the project‟s implementations.
These categories are
• students and teachers in rural schools or multigrade schools or other rural educational
settings,
• farmers,
• SME entrepreneurs,
• doctors and health personnel working at rural health centres,
• local administrators/ public authorities‟ personnel, and
• rural citizens using different services at home.
It is obvious that the above identified categories are also covered by the previous table, but
the RURAL WINGS project based on it user needs analysis and the relevant user profiles has
focused its implementations on these 6 categories of users whose needs and behaviour has
been analysed with every detail.
Coming now to the technical solution offered by RURAL WINGS it is important to note that
RURAL WINGS is proposing the creation of the “learning hub” which is mainly a rural local
node providing access to all the 7 categories of users. So the learning hub is not addressed
specifically to only one category of users, but it can be potentially addressed to more
categories since the hybrid philosophy of the proposed architecture (broadband satellite +last
mile solution) can include many categories of users. For example in a rural community the
learning hub may be situated in a multigrade school and be used by the teacher and the
students, but at the same time through the WiFi network from farmers, rural citizens and
health personnel.
RURAL WINGS has created a bouquet of educational scenarios that can serve the needs of
many categories of users per community and learning hub. Of course for each selected pilot
site there is already a prior knowledge regarding the main user group targeted, but in the
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same time the project through its variety of scenarios and applications is offering the
opportunity to other categories of users to be also actively involved in the project.
Therefore based on Table 1 defining the bandwidth profile per context of use, it is logical to
assume that the maximum indicated bandwidth would be the required bandwidth for each
learning hub. This maximum bandwidth of the table is the mean value offered for the SME
context of usage which is 1024/256 kbps.
This bandwidth should be further elevated to 1024/512 kbps since RURAL WINGS is
targeting to some very advanced educational applications involving video-conferencing and
access to multimedia content which require broadband connectivity (science museums with
AR content, remote telescopes etc).
In conclusion, the basic bandwidth requirement for each learning hub covering all
RURAL WINGS categories of users and contexts of use is 1024/512 kbps. All types
of applications and bandwidth profiles as requested by user needs can be carried
out by satellite services such as ones proposed by the three satellite operators
(AVANTI, EUTELSAT/TTSA, and HELLAS SAT).
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4. Technical feasibility assessment
WP2 has also addressed feasibility issues related to the selection of the most appropriate
technical solution for the RW sites and compliance of hybrid satellite wireless solutions with
user needs expressed in WP3.
4.1 Two-way broadband satellite solutions
4.1.1 Assessment of DVB-RCS-based solutions
Based on the analysis of the user needs and the available satellite and terrestrial broadband
services, the Feasibility Study has come to the conclusion that the most suitable solution for
the first period of the project is the use of DVB-RCS or DVB-RCS type satellite technology
combined with a WiFi terrestrial network as justified in the section below.
The first point that should be mentioned is that the selected RW sites are going to install a
broadband satellite terminal as a medium to long term solution in order to decrease their
digital isolation. As we have already mentioned, these sites have been selected primarily
because the forecast for the availability of competitive terrestrial broadband solutions of
ADSL type is negative for the foreseeable future. This means that these sites have to find a
more “permanent” solution.
DVB/RCS has good performance; it is openly published and it is not owned by a single
industry company. Currently due to the fact that many large industries are investing
resources to the development of products that will comply with this standard it is more
probable that this standard will dominate the market in the long term.
Therefore since the RW sites are looking for a long term technical solution this standard
fits better their perspectives. From the other hand the sustainability of this solution is more
guaranteed from the project‟s point of view since the existence of many vendors in the
market will secure the maintenance and the easy replacement of the installed equipment
after the end of the project. This last issue is of major importance because the sustainability
of the offered technical solutions to the communities is one of the main objectives of the RW
project. Therefore the RW consortium must offer a solution that is viable; that is the most
promising for the future and that has strong chances of good technical support.
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It should be mentioned that the after-project technical support is a critical issue and should
be very carefully looked into from this stage because if problems occur at a later post-project
stage it is possible that the local communities will loose interest for the broadband satellite
services and the whole initiative will collapse. Therefore the RW project has to make sure
that the technical support will be handled properly after the end of the project. This fact,
can be achieved in two ways.
This first one has already been mentioned and is the choice of the most promising and viable
technology currently available in the market and the second is the existence in the
consortium of some very experienced satellite operators /providers (EUTELSAT, AVANTI
HELLAS SAT) that have already set up the proper support mechanisms for their sites and
have implemented to these sites all the appropriate procedures that would normally be
implemented to a regular customer.
Sites will be treated by the operators as real customers and that will give them the
opportunity to get familiarized with all the necessary support procedures and thus take up
more easily the full responsibility for the maintenance of the broadband satellite service after
the termination of the project.
The only disadvantage of the DVB/RCS standard seems to be the cost for the provision of
the satellite terminal which is currently elevated in comparison with other standards and
associated products (e.g. DOCSIS). This issue is not important for our case since the
terminals and the related broadband services are going to be offered by communities and
therefore a difference of a few hundreds of euros could not be significant for a community.
This issue would be important for a single house hold and could play a role in the final
selection, but this is clearly not the case in RW project.
From the other hand since as we have already said DVB/RCS is becoming a standardized
technology, more vendors are expected to enter the market in the years to come and the
related costs are expected to decrease due to the competition (in the past two years that the
RW has commenced, prices have already decreased significantly and very soon terminals are
expected to cost around 500-700 euros, almost half the price that was given at the
negotiation phase of the project). Therefore the assumption made that DVB/RCS is the most
probable technology to dominate the market in the near future will have a clear impact on
the product pricing and thus the currently reported cost disadvantage of DVB/RCS may be
turned into an actual advantage in the near future.
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The remaining of the market available satellite standards surely have significant perspectives,
but from the other hand are either proprietary technologies developed by a single
organization or are not well supported by the relevant compliance organizations. This means
that their long term viability is questionable and their foreseen penetration in market will be
somehow limited resulting in limited possibilities of developing a wide reliable support
network.
The latter is very important for the RW sites because due to their morphological nature and
their geographical isolation, support is a crucial issue that is inherently difficult to address.
Therefore any technical solution adopted for the RW sites must prioritize the post project
maintenance and support and thus DVB/RCS technology is the ideal candidate for the RW
business case.
4.1.2 Assessment of Alternative DOCSIS Standard
Feasibility analysis investigated the recent development of the SurfBeam Systems (US) that
applies the DOCSIS® standard modified for satellite.
The DOCIS Standard is an open standard for cable modem networking in wide use today
with more than 70M subscribers worldwide and it is continuously being upgraded to add
more value added services. DOCSIS has been designed mainly for implementing very large
networks.
The ViaSat company has adapted DOCSIS to satellite networks referring to their system as
SurfBeam or DOCSIS-S. In general the higher protocol layers are DOCSIS compatible, but all
the physical layers are satellite-specific and proprietary. Currently the two main operators
(Wild Blue and Telesat) have together more than 200.000 terminals in operation.
Eutelsat/Skylogic are about to commercialise this system in Europe.
The implementation of DOCSIS-S in the satellite SurfBeam system has several advantages:
increased capacity/transponder (utilisation of 8 PSK modulation in FW link and advanced fade
mitigation capability), reduced capital investment (development expenditure for standard and
mass IC production already done for the DOCSIS cable standard), reduced operation costs,
large selection of provisioning …
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After comparison of the DOCSIS service with the Rural Wings requirements, feasibility study
led to conclude that DOCSIS service is not suitable to satisfy the RW requirements.
Main reasons are as following:
• The DOCSIS service and hub lay out is focussed to provide accounts of shared Internet
access including volume limitation for Internet surfing and E-mails. Terminal to terminal
communication or managed networks as used in the Rural Wings Project in particular for
video conferencing are not possible with this service.
• The service is provided on HOT BIRD Ka band Spots and EURO BIRD 3 Spot D which do
not cover most of the regions of the pilot sites of the RW project.
In general it should be made clear that RURAL WINGS is an educational project that validates
the perspectives and the potential of the two-wat satellite technology in broadband
e-learning applications. In this sense the Rural Wings consortium and the WP4 have designed
some very advanced educational applications that are based on the relevant learning
@school, learning @home and learning @work scenarios. These scenarios presuppose the
ability of interconnecting satellite terminals, of having video conferencing tools and of
supporting point to multi point broadcast for training purposes. It is evident that all the
above demanding services cannot be offered by the DOCSIS networks which do not have the
technical capabilities to support these kind of applications, while at the same time DVB/RCS
technology seems to be the perfect candidate technology to support such activities.
In conclusion, so although DVB/RCS was the project‟s primary choice from the proposal level,
it is verified that this standard is even more favourable for the selected sites and for the
specific needs and priorities of the RW site communities.
4.2 Local area network
4.2.1 Added value of local loop extension
It was clearly stated from the project‟s beginning one of the RW main objective was the
creation of a learning “hub”. The term “learning hub” is a virtual term that refers to the key
node of the rural area network (inside RW project) where the main infrastructure (satellite
terminal, LAN network, WiFi shapers and transmitters) is situated along with all the offered
learning objects (e-platforms and e-tools).
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So the addition of any last mile network is clearly mentioned in the technical annex as an
essential component of the overall installed broadband access network that will expand and
enhance the perspectives of the satellite connection itself. Although one could argue that the
project‟s objectives could be served only with the creation of the learning hub the further
expansion of the satellite network with the addition of a last mile terrestrial broadband
access network is very essential for our case and with a significant added value.
The added value can be easily identified by the fact that a last mile access network can
achieve the following basic objectives:
1. Share the satellite monthly cost among many residences and thus decrease the
total cost per house hold
2. Bring in reality the broadband services inside every household of the rural community
and expand by this way the variety and the quality of the project‟s applications and
the user‟s participation
3. Contribute to the project‟s sustainability, since it makes the offered services more
appealing to the locals by addressing the necessity for “broadband for all”
4. In some cases where extreme climatic conditions exist (Sweden, Estonia, Poland) and
in addition the rural community is distributed in a large area and the physical
presence of the users in the learning hub may be difficult or impossible the last mile
network offers the possibility to form a “distributed learning hub”, to which the
project‟s foreseen applications will be implemented through the “learning at home
scenarios” that will be prepared by WP4.
It is clear that a last mile solution in combination with the satellite network is ideal for our
case because apart from the pre-selected activities that will be carried out within the learning
“hub” it gives the opportunity to all the local inhabitants with a very low cost (30-50 euro for
a PC WiFi card) to be always connected with the broadband network and explore for
themselves the capabilities of the offered service.
This fact will contribute very much to the change of the attitude of the local community
towards the new technology and will help the critical issue of the sustainability of the service
for the post project community activities. To this end, the cost sharing for the take up of the
offered service among as many residences as possible who will in the mean time have
identified through the project‟s test runs the added value of this service, is also another
critical factor that will contribute to the future sustainability of the project‟s outcomes.
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So from the moment that it was decided to create a “learning hub” and take up the satellite
service as a service offered to the whole community, the addition of the last mile wireless
solution contributes to the further promotion of the service among the members of the local
community and enhances the variety and the impact of the project‟s applications.
The RW partnership recognized the necessity of the terrestrial last mile network from the
beginning of the project and decided to equip 25 of the project‟s sites with a last mile
integrated solution. For the rest of the sites (100 sites) it was also decided to try to promote
the usefulness of this solution to the local communities and persuade them to invest a small
amount of money (typically around 1200-2000 euro for a simple case scenario) in order to
install and exploit the added value of such a solution.
It should be mentioned that in almost all of the EC countries there are many other sources of
funding available for the installation and the operation of a WiFi network. This funding mainly
comes from national projects or EC co-funded projects that promote the “broadband for all”
2010 Lisbon strategy. Therefore it is assumed that it will not be difficult for the local
communities to find additional sources of funding and support the installation of a WiFi
network in their area that will bring significant additional value to the existing satellite link.
For example in Greece there are already pilot rural communities (apart from those initially
planned to have a WiFi and be funded by the project) that have expressed their interest in
funding the deployment of WiFi networks from other sources and the relevant NC technical
coordinator (ICCS) is already planning these additional installations. In fact one first phase
pilot sites (Agios Nikolaos) has already designed and installed a WiFi network using its own
financial resources and local technical expertise, and a 2nd one (Mesta-Chios) is in the
process of doing the same thing. Similar cases will be found in other countries too, since as
we have already said for these types of applications there are many on going national or EC
funded initiatives.
In conclusion, the addition of a last mile broadband wireless access network in
every potential RW site is a solution that promotes the project’s sustainability,
fits perfect to the project sites’ special climatic and morphological conditions and
enhances its overall impact to the local communities and therefore this solution
should be examined for every site.
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4.2.2 Assessment of different last mile solutions
The feasibility study performed in WP 2 made an assessment of the different possible last
mile solutions. The study has highlighted the following points:
1. Technology standardisation and maturity
WiFi is the best documented and standardized last mile available technology in comparison
with WiMAX and PLC. As we have already mentioned in a previous paragraph the post-
project sustainability of the services is of utmost importance and therefore a technological
choice that has a long term viability is important.
The WiMAX solution, although it seems appealing and promising, is in an immature
marketing stage and its future market penetration is questionable, while at the same time
the full packet price for the installation of the whole network can reach up to the magnitude
of thousands of Euros depending on the technical solution that will be adopted and the type
of application that will be selected.
PLCs from the other hand still have standardization problems regarding EMC/EMI. in addition
although some pre-market offers are available in UK and other European countries there are
also several other European countries in which this solution is not licensed yet and cannot be
implemented at all (for example in Greece there is no commercial offering for such a service
and the usage of PLCs as a last mile terrestrial broadband solution or a stand alone solution
is still tested through research projects).
2. Compliance with RW sites geographical characteristics
Most of the RW chosen communities are small isolated communities concentrated in a
specific geographical mountain region or islands. The population of each community is
relatively small (in the range of hundreds of people). This geographical and population
distribution which has the characteristic of a few tens or hundreds of people living in a
relatively small area is ideal for a WiFi coverage.
WiFi is suitable for a small scale implementation (a few tens of households with a range of
approx. 1 km with line of sight) while WiMAX is more suitable for a large scale
implementation covering thousands of residence in a range of 30-45 kilometres. In reference
to D3.1 and the description of the selected sites it is evident that WIMAX although suitable
for almost all of RW sites could be considered a luxury compared with WiFi which can serve
the same needs for the project‟s communities and their special characteristics.
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So even if WIMAX could be used it would be preferable to choose a WiFi which presents
significant less technical complexity in installation and maintenance and for our sites will have
more or less the same effectiveness with WiMAX.
WiMAX would be ideal for a large geographical area with a very wide distribution of
residences. This could be the case for some sites in UK or France/Sweden that may present
these characteristics but the majority of the RW sites as we have already said can be very
well fitted in the WiFi installation criteria. From the other hand since WIMAX is a very
promising new technology it could be deployed in a later stage of the project in a small
number of suitable sites fulfilling the characteristics mentioned above.
3. Regulatory considerations
For some European Countries WIMAX has been licensed only very recently and this fact can
make the technical support of this solution difficult. Furthermore the relevant regulations
differ from country to country something that makes its global adoption impossible at the
current stage of the project.
Finally last mile PLC solutions are even more problematic since they are not supported at all
in many EU countries and are offered as a commercial solution in only a limited number of
countries (UK has reported a pre-commercial offer). This solution is dependant from the EDN
network of each country which in most cases is public and therefore the market opportunities
for this type of solutions could be exploited once private competition has entered this field in
a pan European level.
At the current stage this solution could be fit for the purposes of a research project and not
for RW which has the objective to validate the DVB/RCS technology and therefore it has to
rely on solid well documented and viable market ready solutions for the provision of the last
mile broadband accessibility.
In conclusion, WiFi is the most well documented simple and cost effective
currently available last mile wireless access technology to hit the market. It fits
better the profile of the RW sites, it can be easily installed and maintained and
the post project cost for the sustainability of the offered service is small and can
be easily taken up by the local population.
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4.3 Preliminary end-to-end network architecture considerations
The end-to-end system proposed for RW is a hybrid satellite-terrestrial wireless network
solution which allows combining the immediate and far-reaching connectivity of satellite
solutions with the flexibility of deployment and coverage of wireless networks to address
multiple access points, in order to achieve a seamless broadband coverage in rural areas.
The figure below shows one possible scenario for the user access to the RW system within a
small geographic area like a village.
Figure 1 : General architecture of the whole system
The satellite terminal, which is connected through the satellite to the hub station, provides
direct broadband connectivity to the offered e-platforms of the RW system either through
servers set up at the hub‟s location or through servers located at the platform providers‟
premises using the Internet backbone.
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4.3.1 Wireless Local Loop
4.3.1.1 Wireless Network Architecture
The typical Ruralwings wireless network architectures are expected to contain one or more of
the following wireless network modules, depending on the site requirements :
- Outdoor point-to-point wireless connectivity to interconnect two sites such as
for example wireless LANs in two different buildings of a school.
- Outdoor point-to-multipoint wireless connectivity allows multiple remote sites
to share a connection back to a single central site. If the central site has a sectorial
antenna it is possible to interconnect remote buildings within an angle of typically 60°.
Omnidirectional antennas, allow the interconnection of multiple remote buildings all
around the base station. Residential users or SOHO/SME can connect to the network
using a “Light user equipment” (HC) while professional users with a large LAN or users
who are located at more than 800 m from the central base station access the network
using a professional equipment.
- Relay module when there is no Line-of-Sight between two sites to be connected
and/or when the distance is too large.
- Hotspots offer wireless LAN connectivity to client devices (PCs/laptops) equipped with
wireless LAN client adapter such as PCI or PCMCIA cards. These hotspots can be
deployed indoor or outdoor, in the latter case a dedicated outdoor antenna is required.
Figure 3 : Generic wireless client
Figure 2 : Generic point-to-multipoint installation
configuration
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4.3.1.2 Network Coverage Area
The radio coverage of an outdoor wireless link depends on the transmitted EIRP, the receiver
sensitivity, the operating frequency and the path obstruction. Outdoor WiFi network operates
at the 2.4 GHz frequency band with a maximum power of 100 mW. Therefore, the receiver
sensitivity of the equipment and the antenna characteristics are key factors when deploying
an outdoor wireless network to match the radio coverage with the user needs identification.
Furthermore, a direct line-of-sight is required between the transmitter and receiver, and any
obstructions within the line-of-sight may degrade the performance. From the TWISTER
project experience, some typical distances for different wireless network topologies are
given:
- For outdoor hotspot using WiFi mass-market CPE typical maximum range is about
600-800 m,
- For point-to-point WiFi long distance using directional high gain antennas typical
maximum range is about 3-4 km.
The location of the outdoor access point shall be chosen carefully to prevent the presence of
obstacles (such as buildings, trees, hills and any other natural or manmade structures or
objects) in the direct visual line of sight between the transmitter and the receiver. Usually the
highest point of the area is chosen to install the access point. The selected high point can be
for instance on the top of a building, a church or a tower.
Figure 4 : Typical achieved distances in TWISTER
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Consequently, to avoid too expensive wireless network deployment the identification of users
that will share the satellite Internet access through an outdoor wireless network should take
into account the technical requirements listed above. The user‟s premises should be located
within an area of about 600m around the outdoor access point offering a direct line of sight
link. Although, longer distances can be achieved using more efficient WiFi equipment with
higher gain antennas and obstacles can be overcome with the use of relay stations, the
wireless network deployment costs will increase significantly.
4.3.1.3 Wireless network cost elements
This section provides some cost indications for wireless network equipments, based on the
experience of the TWISTER project.
Customer Premise Equipment costs
The Customer Premise Equipment is the wireless equipment installed at user home or
enterprise office in order to enable access to the hybrid satellite-wireless local network. Table
2 gives costs indicates for two types of wireless CPEs as proposed by two different network
integrators.
Description Type I Type II
Home Connect Kit: (Alvarion) including cabling
250 € 90 e
package
Outdoor installation 350 € 150 €
Total CPE cost 600 € 240 €
Table 2 : CPE cost indications from two different network integrators
Wireless Network Infrastructure costs
Hereafter is given a table with the costs of the major wireless equipments deployed to
implement the wireless local loop infrastructure.
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Equipment Cost
Wireless Backbone Hardware
(VAT excluded)
Alvarion BreezeNet Base Unit DS 11 or DS 11 D 1437
Alvarion BreezeNet Remote Bridge DS 11 or DS11-D 1206
Omni 5db - 8 - 12 + cable radio 182 - 187 - 284
20 dBi Antenna YAGI 290
21 dBi antenna planar 290
Sectorial antenna 360
Cabling package 370
UPS 250 VA -500 VA - 2000 VA 145 - 190 - 418
Cabinet 19" 15U 575
Table 3 : Wireless Network Infrastructure Costs
Backbone equipment costs
These costs are related to equipment installed for implementing QoS protocols or to provide
secure access and user authentication (AAA). Additional network equipments such as
switches or routers are in many cases also necessary.
Network Hardware
QOS-NetEnforcer KAC202/2M 4200
QOS-Planet Bandwidth Manager 2200
AAA Nomadix Gateway 933
Switch 2512 404
LAN-to-LAN router 860
Table 4 : Backbone Equipment Costs
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4.3.2 Quality of Service
The satellite solutions deployed in RW should be able to provide the services described
hereafter.
4.3.2.1 Service Profiles
The above mentioned User Trends and its traffic characteristics led to three different service
profiles with different bandwidth requirements.
• Classical Internet Access Service
This service is characterised by allowing only access to the Internet, surfing and e Mail
traffic, no P2P traffic, no public IP address, no streaming, possible limitation of volume,
maximum bandwidth about 512 kbps forward and 128 kbps return link.
• Priority Internet Access Service
This service is characterised by allowing unlimited access to the Internet, no IP protocol
restriction, no volume limitation, public IP address assigned, maximum bandwidth about
1024 kbps forward and 512 kbps return link.
• CIR Connect IP service
For this service the NOC assigns exclusive bandwidth to a single terminal or a group of
terminals. This is mainly used for videoconferencing type applications or content
streaming. Connection to the Internet backbone can be supplied on demand but is not
necessary in a lot of cases. The service allows also terminal to terminal connection.
When assigned this service has automatically priority over the other two services.
All these services are comparable to the existing ones that can be provided by the three
satellite service providers involved in the project (Avanti, Eutelsat, and Hellas Sat).
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4.3.2.2 Bandwidth Management Assessment
Past experience of satellite service providers has shown that even in peak hours only 10% of
the PCs connected are really generating traffic. Consequently there is sufficient bandwidth
available for a reasonable speed for accessing the Internet.
Past experience has also shown as well that only 5% of the PC‟s with an unfair access
behaviour (e.g. using extensively P2P applications) are sufficient to saturate the bandwidth of
the entire network. For this reason it is necessary to provide technical measures for traffic
management to enforce the respect of a „Fair access policy”.
The exclusive bandwidth assigned to the CIR Connect IP service will reduce accordingly the
remaining bandwidth for the IP Access services. It is to point out that a terminal to terminal
video conference of symmetrical 256 kbps will take the entire return capacity of 512 kbps
assigned to the network in the first phase. For this reason these kind of applications need to
be conducted only on a pre booking basis with information to all partners about reduced
network performance well in advance. However the application should be tested.
In the common interest to have the maximum speed to a maximum number of participants
the users should consider doing heavy down- and uploads during night hours and avoid
unnecessary heavy traffic during usual peak hours.
Network Architecture
Return 512 kbps Forward 1024 kbps
End
user
Internet
Backbone
Eutelsat/Skylogic:
Hub Infrastructure
Satellite link End
user
End Value Added services TTSA Satellite
user terminals,
Distribution
to end user End
user
Figure 5 : Bandwidth Sharing
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4.3.3 Deployment/exploitation/scalability requirements
Main drivers for deployment and exploitation of two-way satellite solutions are :
• Capability to use components available on the market and easy to procure in order to be
deployed in a short time frame;
• Flexibility to accommodate for changed market conditions with minimal impact on the
overall system;
• Implementation of appropriate monitoring tools in order to detect and correct failures;
• Implementation of tools able to automatically monitor and control system performances.
Main drivers related to scalability of two-way satellite solutions are the following ones:
• Sizing of the system enabling to support simultaneously connected users range from 4%
(off-peak) to 10% (peak) of the total subscriber base;
• Sizing of the system enabling to support traffic distributed over the day with a peak-to-
mean ratio of about 2.6:1 (download) and 3.4:1 (upload);
• Dimensioning and exploitation costs growing at most linearly with the number of
customers, and with global traffic increase;
• Capability to support a target number of subscribers up to 500.000 in the coverage area;
• Capability to support a target global traffic of 12 Gbps (forward) and 4 Gbps (return).
4.3.4 Next steps and further work
As described in the Annex I as updated after the first annual review, in the framework of
WP5 (Adaptation of Platform and Tools) the end-to-end network architecture will be further
refined. In particular the generic end-to-end system architecture will be updated taking into
account:
• Usage evaluation from phase A (WP 7.2)
• Results of functionality tests on equipment deployed at the pilot sites
• Results of the stes for optimisation of end-to-end system architecture
• Results of detailed analysis of network performance (WP 7.3, WP 5.4)
• Results of the feasibility to integrate and combine all the selected applications
This will be reported in an updated version of deliverable D2.2(=D5.1).
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5. Overview of Satellite Broadband Market
There is a significant potential demand for broadband access in European regions that may
not be reached by terrestrial services in the foreseeable future. To realise this demand, a
satellite offer needs to take account of the applications and services developing in the
terrestrial sector to ensure these can be supported. The satellite offer does not have to
match the capabilities of terrestrial broadband over the next fifteen years, but it does need to
offer a broadband experience at the right price.
The initial market analysis carried out by Avanti focused on the UK Rural Business Park
market. This focus was widened to incorporate other market sectors that became of interest.
In the meantime Avanti carried out additional studies of broadband markets under a number
of EU and UK Digital Divide initiatives.
5.1 Introduction
There are many potential applications and markets for the services deployed in RW. The
current climate for raising money for the commercial deployment of complex new
technology-based services is extremely difficult and it is therefore critical to focus very tightly
on a market segment which:
i) has clear and proven demand;
ii) is easily defined and segmented;
iii) can be marketed in a rapid and cost-effective way;
iv) can largely be served from operational cash-flow in the business without
requiring extensive external funding.
5.2 Market Background
Efforts to speed the provision of broadband services throughout Europe has been gathering
pace as governments try to promote the diffusion of ICT and to redress the socio-economic
disparity that is becoming more evident between rural and urban areas of the region.
Satellite based broadband Internet access is gaining increasing interest for provision of
service to those parts of the European land mass that are un(der)served by terrestrial means.
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This market is widely distributed, sparsely populated and at the lower end of the income
spectrum. The lack of economic density makes this market unattractive to terrestrial
broadband operators due to the difficulty in making economic returns. For this reason it is
not expected that comprehensive enablement of terrestrial broadband into scarcely
populated regions will take place for at least five years. By this time it is estimated that more
than 14% of rural households in the EU15 zone, and probably double this in the accession
states, will remain outside the terrestrial reach.
The sizeable, yet dispersed, market for rural broadband underlines the possibilities for a
satellite solution, particularly one that can be brought quickly to market. Because rural
broadband access has become a highly political issue, it depends extensively on government
backing. Owing to the intervention of regional governments, many local initiatives have
received grants to catalyse the uptake, using the funds to subsidise the costs of access, and
in some cases the hardware and software elements, incurred by the end user. Because the
funding flows through the regional government, non-metropolitan broadband has primarily
grown from within the community. So-called “broadband champions” take upon themselves
the responsibility to raise awareness and mobilise community resources and to gather
sufficient critical mass to make broadband provisioning an attractive proposition. However,
evidence shows that they are to difficult to sustain, partly because they exhibit a high degree
of localisation and partly because they are too small. In this case satellite can quickly realise
economies of scale by providing back-haul service to multiple, dispersed community nodes.
5.3 Market Analysis
The approach used to analyse the market is:
- Estimation of take up of broadband services in each country. Take up and
penetration rates are based on understanding the number of households, Gross
Domestic Product (GDP) per household, the number of SMEs and government offices.
From these numbers, and using current take up rates for broadband, projections to
2020 have been produced.
- Determination of uncovered demand in each country, based on nationally available
figures for broadband penetration for all the EU 25 and Turkey, and projections for
take up in the future.
- These activities yielded estimates of the addressable market, the potential broadband
users who are not (or will not be) covered by existing terrestrial services.
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- Based upon the above analysis, the next step was to determine the share of this
addressable market that will be available to a satellite solution. This estimation of
total potential satellite market is the available market, and was made using
projections in existing reports, the uncovered demand and consideration of the
competitive environment.
- Forecasts for actual market capture were then made using three scenarios with
different take up rates, enabling to define the demand forecast for each user type
and each country/group across our time line to 2020.
- Analysis of Activity Factors and satellite traffic.
Take up rate for the satellite solution is based on the take up rate for broadband in countries
where penetration is high enough for the market to be considered mature. The resulting
scenario estimates were produced for the period from 2004 to 2020. The estimates were
produced on a geographic basis in terms of user type (SME, SOHO, teleworker, consumer
and institutional).
5.3.1 Demand forecast
The demand forecast for three scenarios (residential, SOHO/Teleworkers and SME) is
illustrated in the following sections. The residential figures include consumer, SOHO and
teleworker demand.
5.3.1.1 Residential
The baseline case scenario assumes that 1/3 of the available market is taken up. The
numbers for the countries/groupings under analysis are as follows:
Source: Avanti Communications
Table 5 : Available Residential Market – Baseline Scenario
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Turkey
4500.00 Total Bulg/Rom
Total E Europe
4000.00
Poland
3500.00 Total Baltic
UK
3000.00 Sweden
Spain
2500.00 Portugal
Netherlands
2000.00
Luxembourg
1500.00 Italy
Ireland
1000.00 Greece
Germany
500.00 France
0.00 Finland
Denmark
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Belgium
Austria
Source: Avanti Communications
Table 6 : Available Residential Market – Baseline Scenario
In our baseline scenario the residential take up grows steadily from just below 500,000
households in 2004 to 3.86 million by 2020.
It can be observed that Germany accounts for a considerable proportion of the residential
market. This is due to a combination of factors including the large population, high demand
for broadband and relatively large proportion of the phone lines not DSL enabled at the
moment (10% of the lines). Deutsche Telecom is assessing various possibilities to tackle the
lack of availability including satellite, laying more copper lines in order to offer DSL or
upgrading the cable network.
At present and interim future however, satellite is the main alternative solution together with
fixed wireless, which was limited in 2003 but is expected to develop fast. It is also worth
noting that at the end of 2003 there were 45,000 broadband satellite connections, the vast
majority being one-way, and a few thousand two-way connections for SMEs.
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5.3.1.2 SOHO
The professional market has been split into SOHO/Teleworkers and SME. This section
provides an analysis on the approach used to estimate the take up for each segment for
these markets. Although SOHO and Teleworkers are essentially part of the residential
market, they must also be considered separately due to their user and traffic profile, which is
differentiated from a household and approaches one of a small SME.
Statistics for the proportion of the working population in each country working from a
household assumes at least one full day per week as well as the proportion of SOHO
1
teleworking were derived from the 2003 SIBIS survey . A further assumption has been made
that the number of Teleworkers and SOHO translates directly into a number of households
(i.e. one teleworker/household). The same study suggests that the number of teleworkers
has been increasing at an average rate of 3.45% annually. Therefore, an annual growth rate
of around 3% has been used for the forecast of the addressable market.
Table below shows the size of teleworking market for a number of countries:
Source: ESYS
2
Table 7 : SOHO /Teleworking Statistics
1
SIBIS Pocketbook 2002/2003, Measuring the Information Society in the EU, the EU Accession
Countries, Switzerland and the US
2
ESYS Own Data Set
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Teleworkers and SOHO are already part of the residential market. In order to avoid
considering the same market segment twice, they will be referred to as a proportion of the
available residential market for every country. This will be calculated from the baseline
proportion of the residential broadband population, based on above table, grown annually by
3% in addition to the broadband growth.
The baseline case scenario assumes that 1/3 of the available market is taken up.
The numbers for the countries/groupings under analysis are as follows:
Source: Avanti Communications
Table 8: Available SOHO/Teleworker Market - Baseline scenario
400,000 Turkey
Total Bulg/Rom
Total E Europe
350,000
Poland
Total Baltic
300,000
UK
Sweden
250,000
Spain
Portugal
200,000 Netherlands
Luxembourg
150,000 Italy
Ireland
100,000 Greece
Germany
50,000 France
Finland
- Denmark
Belgium
05
11
17
04
06
07
08
09
10
12
13
14
15
16
18
19
20
Austria
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Source: Avanti Communications
Table 9 : Available SOHO Teleworker Market - Baseline Scenario
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It can be seen that the available SOHO/Teleworker baseline scenario take up accelerates
quickly to 2007 and then begins a period of consistent growth throughout our analysis
period. In this baseline scenario we estimate the total available SOHO/Teleworker market in
2020 at nearly 341,000.
5.3.1.3 SME
SMEs employing more than 50 people are excluded from the forecast, on the assumption
that they will either be in urban locations or use alternative means for access such as leased
lines. For the new member states, micro enterprises considered are the ones with 5-9
employees rather than 1-9 for the EU15. Table 10 summarises the statistics used to calculate
the proportion of micro (1-9 employees) and small (10-50 employees) SMEs3 as well as
internet penetration for small SME4.
Source: ESYS
5
Table 10: SME Statistics
3
SMEs in Europe Candidate countries, Eurostat ,2003 edition
Enterprises in Europe - does size matter?, Eurostat , October 2002
Broadband Satellite Services market, Frost & Sullivan, 2001
4
Internet Usage by individuals and enterprises. Eurostat, October 2002
5
ESYS Own Data Set
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No growth has been assumed for the number of SMEs, as no statistics have been found
predicting a particular growth over the forecast period. On the contrary a recent Eurostat
report suggests that the number of SMEs in the new member states has reduced since 1995.
The addressable SME market is defined as the proportion of SMEs with Internet, located in
the uncovered area. It has been assumed that the proportion of uncovered SMEs is the same
as the proportion of phone lines that are not ADSL enabled.
Similar to the residential market, estimates on broadband take-up are based on statistical
6
data on broadband penetration for Enterprises (all technologies) , as well as statistics on the
growth of DSL lines for business7. Results are presented in Table 11 below:
Source: ESYS
8
Table 11: Broadband in Enterprise
6
Internet Usage by individuals and enterprises, Eurostat, April 2004
7
Point Topic Operators Source Service
8
ESYS Own Data Set
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As broadband is expected to gradually replace all current Internet technologies for SMEs, the
available market is calculated assuming that the addressable SME market can be served by
satellite by the end of the forecast period. This is then moderated by the assumptions of
each scenario to provide the demand. The market growth is calculated in a similar way to the
residential market, by fitting an S-curve through the historical business broadband growth.
In our analysis we have extrapolated the number of SME‟s for Ireland, Greece and
Luxembourg due to insufficient available data.
The baseline case scenario for SMEs assumes that 1/3 of the available market is taken up.
The numbers for the countries/groupings under analysis are as follows:
Source: Avanti Communications
Table 12: Available SME Market - Baseline Scenario
Turkey
800,000 Total Rom/Bulg
Total E Europe
700,000 Poland
Total Baltic
600,000 UK
Sweden
500,000 Spain
Portugal
400,000
Netherlands
Luxembourg
300,000
Italy
200,000 Ireland
Greece
100,000 Germany
France
- Finland
Denmark
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Belgium
Austria
Source: Avanti Communications
Figure 6 : Available SME Market - Baseline Scenario
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The baseline scenario shows a forecast peak take up SME market of 678,992 in 2009,
dropping slightly as DSL penetration increases to a consistent take up of approximately
614,000 by 2020.
5.3.1.4 Activity Factors
The total traffic offered to the satellite is estimated by averaging out the expected intensity
of use on a 24-hour basis. This is based on an activity factor, which is representative of the
number of active users in the system at any given time. The activity pattern adopted for our
traffic projections is illustrated below:
Source: Avanti Communications
Figure 7: 24-Hour Activity Factor - Residential and SoHo (Left) an SME (Right)
These patterns seek to take advantage of the complementary behaviour between residential
and SoHo/Enterprise users – which can be exploited to optimise the capacity demand placed
on the satellite platform. The behaviour shown above implies that day-time demand is more
likely to come from business users – coinciding with normal working hours but interspersed
with isolated peaks from residential customers – and which is progressively phased-out by
residential users, past-working hours.
The average number of active residential users is set at 10%; while the figure for SoHo users
is 28%. For the SME market, 24% of total users are assumed to be active, on average.
5.3.2 Demand mapping
In addition we include results from demand mapping work from STRAND which illustrates the
expected evolution of demand over time, enabling us to assess the most favourable entry
and growth markets
The map colour threshold values have been kept constant for the four years of interest to
permit visualisation of the increase in demand with time. The units are thousands of
subscribers.
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Source: BT
Figure 8 : Residential demand (thousands) for 2007
Source: BT
Figure 9 : Residential demand (thousands) for 2010
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5.3.3 Entry markets
The choice of entry markets is critical for the overall deployment strategy. It is vital, for
immediate commercial viability and long term sustainability, to initially address those areas
offering largest demand and economies of scale. Based on our analysis we have identified
three main countries that offer the largest demand pool, namely the UK, France and Italy.
From 2007 onwards these countries make up between 45% and 50% of the region‟s market.
In order to capitalise on the growth potential of the EU12 region, a second group of countries
have been identified as the dominant markets in this group, namely Hungary and the Czech
Republic.
5.3.4 Conclusion
“The analysis shows that, under conservative assumptions, estimates of total market size are
sufficient for a commercially viable business. Pan-European coverage can be gained
progressively as capacity is made available at a rate that mirrors service uptake.
Three main countries, namely the UK, France and Italy, appear to offer the largest demand
pool, whilst a second group of countries from Eastern Europe, including Hungary and the
Czech Republic, seem to offer the most significant growth potential of the EU12 region.
Since the study was done there have been changes in what is a very dynamic market. In the
first group of countries the extended roll-out of terrestrial networks has exceeded forecasts,
which means that the market for satellite broadband has probably narrowed. In the second
group of countries the rapid development, and thirst for broadband communications, has
made these countries more attractive than originally thought.
The pan-European market still offers an attractive opportunity for satellite-based broadband
services. But the most attractive markets for satellite broadband in general, and Rural Wings
in particular, would seem to be moving to the east.
We look forward to analysing the full effect of these changes in work package 8 of the
project.”
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5.4 Terrestrial Infrastructure Competition Analysis
Terrestrial technology is a competitive threat to satellite broadband solutions, but RW
satellite service providers are targeting areas where there is a lack of consistent and effective
coverage of terrestrial technologies solutions to deliver the broadband connection.
The following, mainly based on the strategic plan for the AVANTI Broadband service launch
project discusses the lack of terrestrial provision in non-metropolitan areas.
5.4.1 Terrestrial Infrastructure Solutions
5.4.1.1 DSL
BT has announced that it will cover 99.6% of the UK covered by next year. This means that
most exchanges are DSL enabled. It does not mean that everybody in the UK can get DSL.
In a review of global DSL coverage in the Financial Times (October 20th 2004) then UK does
not appear in a list of the top 20 countries world-wide by DSL penetration of telephone lines,
reflecting the problem the UK has with very old legacy infrastructure unsuitable for DSL.
Thus the UK penetrates less than 9.3% of its lines with DSL. BT did admit that they will have
to lay an additional 5,500km of wire which amounts to roughly a £275 mln investment.
Digging up roads and all related issues will make this a slow process. Note that the BT
network has a substantial amount of aluminium wires to end-users that will have to be
replaced. The statement that the 5,500 km is additional infrastructure implies that the
replacement issue is not included in this number.
Distance to the exchange is an issue. A user that lives between 3.5 and 6 km from the
exchange can today not get DSL. BT has a trial service that can extend the reach to 10km,
but it is not known what the results are and the pricing has not been fixed either. DSL will
eat into the rural market but it will not be very quickly. Responses that Avanti has received
so far under its AVANTI trial and otherwise confirm this view.
Also note that ADSL is limited in what it can deliver to customers. It is asymmetric and the
download speeds are restricted. If customers want very high bandwidth and symmetric they
need to upgrade to SDSL which is very limited in its availability and pricing is high. Satellite
can play a very competitive role in these high speed markets.
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Some other European countries are behind the UK in roll-out of DSL. Issues of a regulatory
nature where the wholesale prices charged by the incumbents are still too high to make
broadband a mass product are still around. Most countries in the EU10 will follow the UK‟s
path in terms of roll-put but at a slower pace. This leaves more opportunity for satellite
broadband.
The accession countries do not have a lot of cable and fixed line infrastructure. It will take a
lot of investment and time to enable these countries for DSL. What has been clear over the
past few years is that Mobile companies have been very successful in acquiring clients due to
the fact that mobile is a instant bypass product once rolled out compared to fixed line.
The investment in mobile systems is a lot lower then having to install a fixed line network
from scratch. Most EU10 countries have extensive legacy networks that have been built a
long time ago when digging up roads and getting planning consent was less of an issue and
much cheaper.
5.4.1.2 Cable
In the UK there are two main cable telephony companies in the UK following several years of
consolidation – Telewest and NTL. Between them they only have approximately thirty
percent of the UK within coverage. They are both now deploying cable modem services
although not in all franchise areas.
NTL passes 400,000 businesses and Telewest passes 233,000 therefore less than one fifth of
businesses in the UK are able potentially to receive service. The cable companies have
recently found themselves heavily cash constrained and struggle to expand their business
into new areas, forces by shareholders to execute existing business plans.
In other European countries like Germany and the Netherlands cable penetration is very high
and cable is used to provide users with Broadband. There are local opportunities where cable
is still analogue and where there is no immediate plan to upgrade the network to digital.
Avanti is in principle not targeting the urban areas and cable is therefore not a competitive
threat.
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5.4.1.3 Leased Line and Fibre
In theory anyone in the UK and most of Europe could receive leased line service but the
economics of laying dedicated lines and/or fibre optic cable outside built up areas are simply
very high for a commercial operation and telcos are not deploying fibre en mass in Europe,
especially not to rural areas.
5.4.1.4 Broadband Wireless Internet
Broadband fixed wireless access (BFWA) bypasses conventional phone lines and cables by
using radio transmitters to beam signals to receivers on buildings. BFWA works well under
certain conditions but it requires many base stations, leading to two issues:
1. The cost of infrastructure is high (as high as basic mobile networks, which cost several
billion $ each) and up-front and mainly has to be invested before any subscribers are
sold.
2. It is now getting very difficult to get consents from local authorities for large towers
In November 2000, auctions were held to provide broadband wireless Internet services
around the UK. Three licences for spectrum in the 28 GHz band were auctioned in each of
eleven English regions, with additional licences for Wales, Scotland and Northern Ireland
bringing the total number of licences to forty-two.
However, only 15 licences in eight areas were sold, raising £38m versus the government‟s
estimate of £1bn. The only licences sold were in cities, because of the two issues above.
Since this auction Broadband UK a subsidiary of PCCW, the Hong Kong based Telecoms
Company founded by Richard Lee, bought the 15 licenses and has started to roll-out service
in a soft launch in the Thames Valley. The price points are £ 18 for 512k and £ 28 for 1MB
connection. The terminals are £ 75 and are offered for £ 10 in the initial soft roll-out. It is
unclear whether this pricing is subsidised are not.
Initial results still need to be collected. Note that roll-out is expensive and takes time, while
satellite will be instantaneous once launched.
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WiMAX
IEEE 802.16 is working group number 16 of IEEE 802, specialising in point-to-point
broadband wireless access. It also is known as WiMAX, an acronym that stands for
Worldwide Interoperability for Microwave Access. What differentiates WiMAX from earlier
broadband wireless access (BWA) iterations is standardisation. Chipsets are currently
custom-built for each broadband wireless access vendor, adding time and cost to the
process. Its equivalent or competitor in Europe is HIPERMAN.
WiMAX does not conflict with WiFi but actually complements it. WiMAX is a wireless
metropolitan area network (MAN) technology that will connect IEEE 802.11(WiFi) hotspots to
the Internet and provide a wireless extension to cable and DSL for last mile (last km)
broadband access. IEEE 802.16 provides up to 50 km (31 miles) of linear service area range
and allows users connectivity without a direct line of sight to a base station. The technology
also provides shared data rates up to 70 Mbps, which, according to WiMAX proponents, is
enough bandwidth to simultaneously support more than 60 businesses with T1-type
connectivity and hundreds of homes at DSL-type connectivity.
An important aspect of the IEEE 802.16 is that it defines a MAC layer that supports multiple
physical layer (PHY) specifications. This is crucial to allow equipment makers to differentiate
their offerings.
The equipment is still expensive and the roll-out has just started in EU member states.
Practical testing is needed to verify its capabilities. Avanti will keep a close eye on the WIMAX
development and may use it in its own network at some point in time.
UMTS
There has been speculation about the possible uses of UMTS in fixed environment. This
development is slow for the following reasons:
The roll-out of UMTS is not proceeding very fast. 3 the UMTS only mobile company in
the UK has problems with network coverage and is selling it‟s service at the moment
as a cheap alternative to 2G. Current GPRS data pricing is still prohibitively high for a
general purpose service (typically 1 €/MByte).
One of the main reasons prices for spectrum went high is that incumbent operators
are running out of spectrum for voice traffic - much of the new 3G spectrum will be
used for this purpose. Many companies have written off all or part of their 3G
purchases over the last couple of years.
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UMTS operates at higher frequencies around 2 GHz and up. The higher the
frequency, the more base stations are required. This means that to offer very dense
coverage, massive capital investment is going to be required. Given that capital
markets are unlikely to be positive on the sector, services are likely to be deployed
slowly and incrementally inside big cities. Roll-out of services in rural areas will be
uneconomic for 3G players for a substantial period.
Although IMT-2000 can deliver data rates of up to 2 Mbps, this is highly sensitive to
how close you are to the base station. Rural areas are unlikely to have high speed
coverage for the foreseeable future.
In order for business plans to make sense, UMTS services are going to have to be
priced quite heavily, making it uncompetitive for fixed applications, as even the
2G/EDGE services from for example Vodafone prove.
An interesting enhancement to the UMTS standard is HSDPA (High Speed Downlink Packet
Access) that will, once fully utilized, provide a true alternative for local wireless networks.
Under optimal conditions current HSDPA deployments support down-link speeds of 1.8, 3.6,
7.2 and 14.4 Mbit/s, whilst being backwards compatible with existing UMTS networks.
Further speed increases are planned for the near future.
5.4.1.5 WiFi Hotspots
There are currently 10 UK operators offering wireless connection, WiFi Hotspots. If you refer
to www.zdnet.co.uk/specials /wifimap/ you can see a graphical map of the UK and also
operators and prices (a snap shot map is shown below). The 10 operators include - BT
Openzone, 2339 Hotspots (example partner is Hilton Hotels,), ReadytoSurf (Bagelmania and
Esquire café chains),The Cloud, Square Mile International (Marines), Broadscape, Swisscom
Eurospot (Moat House Hotel chain), not to mention the mobile operators such as T-Mobile
(Starbucks) and Vodaphone.
There are some 2500 Hotspots in the UK (www.hotspot-locations.com ) but most of these
services are in urban environments extending the reach of land line and mobile services. In
fact some of these operators could become channels for ABL.
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Figure 10 : WiFi Hotspots in UK
5.4.1.6 3G Broadband Network
An alternative solution identified in the feasibility study is the usage of 3G- broadband
terrestrial mobile networks. A characteristic example of the situation with 3G networks is
Sweden. Very recently a new Swedish mobile provider has announced some very appealing
offers “http://www.tre.se/templates/BroadbandCampaign.aspx?id=28250” (mobile
broadband all over Sweden, costing 10 euro/Month: for 0.384 Mbit/sec and 20 euros/months
for 3.4 Mbit/sec) with almost all Sweden covered and the new mobile provider giving further
options for mobile broadband applications It is evident that in these cases that of course are
not only confined in Sweden, the viability and the sustainability of the satellite solution is
questionable and therefore satellite cannot be prioritized.
Unfortunately these types of services and networks are being slowly deployed and currently
are fully operational with adequate coverage only in the most developed northern EU
member states and do not represent the average situation in EU member states. In many EU
countries (especially in the new east members and the “old” southern members) the
deployment and the take up of 3G mobile networks has been delayed although in the past
3G broadband networking was considered as one of the most promising broadband
technologies that could penetrate the market. So there are many EU countries in which 3G
networks are not fully deployed yet, and do not cover the rural and underdeveloped areas.
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Furthermore the 3G networks are deployed by private companies which have paid huge
amounts of money for licensing in EU governments, and therefore their primary target is to
expand in overpopulated urban and tourist areas in order to sell their services and not in
rural and underdeveloped areas where the demand for similar services is not so increased.
So what has been said for the deployment of ADSL networks in rural and underdeveloped
areas in the previous paragraphs is also valid for 3G networks, and the basic conclusion is
that rural areas cannot rely on these types of networks for the bridging of their digital divide
for the mid term future.
5.4.1.7 PLC Network
Another solution that theoretically could be implemented to the RW sites apart from the
widely known ADSL networks and the satellite broadband access networks could be the
usage of PLC networks. PLC networks have been very well addressed D2.1 deliverable and all
of their key characteristics have been very well highlighted.
Reference to D2.1 it is evident that PLCs do not have the disadvantage of the necessity to
build the backbone network because in most cases the EDN (Electricity Distribution Network)
is already available. Worldwide 80% of the population is covered by PLC networks but this
percentage is much higher in European Union. In fact almost all of the RW sites are covered
with a PLC network and this means that these sites could be candidates for the usage of this
technology. So, one main advantage of the PLC network in comparison with the standard
ADSL type network is that it does not need any significant additional investments for the
build up of the backbone network (e.g. local telecommunication centres).
From the other hand it is clear from the analysis that the PLC network as a stand along
solution could be used for a range of narrow-band home applications, but this is very far
from the scope and the perspectives of RW which aims to bring broadband services to
digitally deprived rural areas. In addition there are also a number of issues associated with
unclear regulations and problems with EMC/EMI that make the usage of PLCs even more
problematic.
So it is clear that use of PLCs as a stand along solution for telecommunications could be an
alternative option for a rural area, but in no case it is fit for the demand for broadband
services and applications posed by the RW sites. The use of PLC could only be adopted in the
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case that no telephone line was available in a rural place and thus telephone or similar
narrow band services could be provided through the EDN network. Of course such an
application is out of the question for the RW sites because as we have already said most of
them are equipped with the standard EDN and PSTN networks.
5.4.2 Terrestrial infrastructure SWOT Analysis
The table below attempts to summarise the competitive position of terrestrial infrastructures.
Strengths Weaknesses
Many large businesses with major customer Most under major pressure to execute core
service organisations and marketing business plans and not expand into new
functions product areas
Well established technology with large user
Lack of 100% geographic coverage
base
Lack of focus on niche environments in
pursuit of large consumer markets
High cost of network deployment before
customers are signed = high risk
Opportunities Threats
Market power may enable big telcos to seize
SSP exploits pricing/ quality opportunities
some business where networks provide
and finds niches
coverage
Most big telcos over borrowed and struggling
to repay debts
Table 13: SWOT Analysis - Terrestrial Infrastructures
5.4.3 Conclusion
In conclusion, following work done in the feasibility study the satellite broadband is
considered as the ideal solution particularly for the accession countries to connect to the
internet.
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The table below attempts to summarise the competitive position of satellite infrastructures.
Strengths Weaknesses
Large coverage Relatively High Cost/Performance ratio
Scalable and Easy deployable infrastructure Relatively high cost of user terminal
Less suitable for very high interactive
Very efficient for broadcast applications
applications
Opportunities Threats
New frequency band (e.g Ka) and
Adverse publicity from large terrestrial
modulation (e.g ACM) will improve
incumbent operator
bandwidth efficiency reducing cost
Lack of large operators/resources to execute
Bundled service with Satellite TV
quick roll out
Developing Countries in need of quick Quick Wireless Terrestrial technology
communications networks deployment deployment (WiMax, 3G/4G)
Table 14 : Satellite infrastructure SWOT analysis
The entrance into the non-metropolitan broadband market by satellite service providers is
timely. Support from Governments and the EU makes the timing even better. Many trials
have given SSP insights in the roll-out and implementation of a DVB RCS and WiFi network.
Early market entrants like Aramiska have paved the way and lessons have been learned that
Avanti can benefit from. As analyst house Ovum wrote: "The failure of Aramiska suggests
that the satellite-based broadband service providers are operating under perilously difficult
conditions with fragile business models."
Aramiska was confident that its business model of providing a mix of business grade services
(backed by SLAs) and backhaul services to community broadband providers was robust
enough to carve a sustainable niche, even though more conventional wired broadband was
becoming available. It is clear that they have probably over estimated the market take up
and set up a too expensive service machine.
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Avanti has taken into account the following lessons learnded:
• High Investments – Aramiska made large upfront capital investment for a full
redundant, very robust and complex satellite and networking infrastructure based on a
very new standard such as DVB-RCS. It also decided to offer value added services
establishing itself as a full ISP. In 2001 DVB-RCS was at its initial stage of shaping and
available systems on the market were neither particularly reliable nor cheap.
• High Operational Expenses – Aramiska used Eutelsat‟s Atlantic Bird satellite that
assured a large coverage over Europe but with cost per transponder lease more sized for
expensive DTH/Video or large Corporation VSAT communications rather than for the new
born broadband via satellite market.
• Pricing - Price per package were very high with an entry service level at 250 Euro per
month for a 512/128 Kbit/s shared connection. Far too expensive, we believe, for
business and communities, especially located in rural areas.
• Business Model - Aramiska adopted a direct sales strategy, maintaining the control of
the customers and establishing end users price so that there is no distributor mark up on
the system. Resellers and distributors were only paid on commission per contract and not
on a revenue sharing basis with the service provider. They derived most of their revenues
from installation and maintenance, thus not having any incentive to sell Aramiska
systems.
• Market coverage – Despite that Aramiska had very good service coverage over Europe,
It focused its commercial roll out on relatively rich, well served countries such as UK,
France, Spain, Belgium and the Netherlands. Two thirds of the declared 4000 thousand
customers were in UK. No efforts in differentiating their offer for developing countries
(e.g. in Eastern Europe) has been clearly elaborated.
The challenges for SSP are to get its bandwidth and hardware prices to acceptable levels. A
strong focus on innovative ways of delivering connectivity and content is key to success.
Partnerships with bandwidth providers to make available low cost satellite capacity will
achieve this goal combined with expected increased sales and reduced cost in the DVB RCS
CPE. Cost of WiFi equipment will keep coming down as well, based on the mainly urban
terrestrial roll-out. Management challenge will be to balance growth with financial capability
to get to a sustainable growth and to achieve scale in a balanced but as short as possible
timeframe.
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6. RW SSP Broadband Business Modelling
6.1 Avanti Broadband Business Modelling
This section forms the business strategy upon which is based Avanti‟s intention to deploy the
Avanti Broadband product as a commercial service. Avanti‟s business model has evolved over
the past four years, influenced by the following factors:
Experience from the following DVB-RCS technology trial projects:
o BARRD was a technology trial of the hybrid DVB-RCS/WiFi model in
providing broadband to rural business parks in the UK.
o INSPIRE is a bigger trial to test the scalability and commercial
feasibility of the model in addressing the residential market.
Experience from broadband market analysis projects, such as STRAND, which
forecast the market for broadband across Europe over the next few years.
Knowledge of broadband markets, which have in recent years been marked by
deregulation and the rapid spread of broadband (ADSL & cable) availability,
encouraged by government policy.
Technology evolution, which has in recent years caused the performance of the
DVB-RCS technology to improve and has enabled prices to fall.
The original business model was strongly influenced by the relatively high cost of the satellite
bandwidth and satellite terminal. The rationale was to share the cost of the terminal amongst
a number of users, through the use of cheap WiFi equipment, rather than provide every end
user with his own terminal. The cost of installation was effectively the cost of installation of
the satellite terminal since the WiFi equipment was easy-to-add. The commercial models
assumed a minimum number of end users to achieve break-even and some business models
assumed a measure of government support.
Experience showed that WiFi performance could be improved by using outdoor-mounted,
directional antennas but this adds significantly to the installation cost, particularly when the
users are not all added in one visit but gradually over time. The hybrid DVB-RCS/WiFi gave
rise to some practical and contractual questions, such as how, or whether, to service sites
with fewer end users.
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In the current situation, in which the prices of satellite terminals are falling and the cost of
WiFi equipment has reached its cost floor, people are starting to look at alternative models,
such as the direct model in which one every user has his own satellite terminal. Indeed this
direct model is the one that has been adopted, successfully, by WildBlue in the USA. The
main advantages of this approach are:
• Smaller communities and individual houses can be addressed;
• The installation of individual terminals increases the number of terminals deployed,
thus leading to greater economies of scale and further reductions in terminal prices.
• The extension of the services portfolio offered over the platform with multicast, virtual
network operator and business continuity services and thus targeting a larger and
more diverse user community.
• Issues associated with the maintenance of communal WiPoPs located on private
property are avoided.
• The sophisticated bandwidth sharing protocols of DVB-RCS can be more fully utilized.
Avanti is addressing the high costs of the satellite bandwidth by launching an own satellite.
6.1.1 Service Offering
6.1.1.1 Broadband Access
As a result of previous technology trials, Avanti is now able to offer a commercial broadband
Internet access service to SMEs and home users located in rural areas of the UK and Ireland,
using a satellite and Wireless LAN system. The service will in future be extended to other
European countries, indeed there are already some users in Italy. The products serve
companies‟ Local Area Networks with very robust Quality of Service parameters as well as
providing home users with a reliable and competitively priced service.
The products utilise DVB-RCS with satellite links for both forward paths at speeds of up to 8
Mbps and return paths at speeds of up to 2 Mbps; this bandwidth is distributed from a
central terminal to businesses and home users within a radius of several hundred metres by
a wireless network employing a high degree of security stability and high perceived speeds.
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6.1.1.2 Applications Providers
Avanti is keen to offer value-added services to its portfolio, since they will drive the next
phase in the development of the internet and they are a useful way to demonstrate the
benefits of new technologies. Avanti will therefore be introducing commercial partners with
interesting products into the Avanti Broadband product set. In the on-going INSPIRE project
Avanti has already started to provide some value-added services that have been sought by
trial participants, including:
• Hosted email. Hosted email offers a high degree of resilience and service level to
SMEs who otherwise would be forced to operate their own e-mail server to access the
same feature set.
• Hosted SAP Business One business operations system.
• VPN and Firewall.
• Remote storage.
• Enhanced security. Security is an increasing concern amongst SMEs and home users
alike. Recent reports on how much SMEs spend on security are a clear indication that
a hosted service at a reasonable price is very attractive to SMEs.
6.1.1.3 Typical Usage Scenarios
Avanti foresees that there will be four primary sources of installations, one of which was the
original target of the BARRD trial and three that have recently became more of interest.
Rural Business Parks
Rural Business Parks were the original target of the BARRD trial. One of the most discernible
social and economic trends of the last ten years has been a significant conceptual shift in
living, working and playing in the countryside. Increasingly, people are making investment
and lifestyle decisions that favour relocation to rural areas. The concept of developing a
significant amount of office accommodation in a rural location is now well established and it
has created a significant demand for broadband communications services.
An example of such a rural business park is shown by Broughton Hall, owned and operated
by Rural Solutions, a partner in the BARRD trial. Broughton Hall Business Park is set amidst
3000 acres of Yorkshire parkland and is within easy reach of Manchester, Leeds and
Harrogate.
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The historic listed buildings have been carefully and aesthetically converted to high quality
offices. The business park illustrates how an estate, largely dependent on agricultural
income, can be transformed into a significant and diverse commercial enterprise.
The DVB-RCS terminal is located at the main estate office, with each office building on the
estate receiving a WiPoP antenna, enabling each company to receive dedicated service and
private billing. For commercial service, Rural Solutions, owner of Broughton Hall will become
a reseller, investing in the equipment itself in each of the projects it develops, and selling
managed services to its tenants. Thus, the tenant will not need to enter into a long-term
contract with Avanti for services, which is important in a business park environment where
tenants can come and go quite frequently.
Rural Broadband Champion
There is a significant and quantifiable group of people who live in non-metropolitan areas
and have strong professional or hobby-based reason to need broadband access. The
individuals are usually highly motivated and have in many cases tried to get broadband from
existing providers to no avail or at a price that made it unattractive or even uneconomical.
These individuals can usually be identified by the presence of a community website or
through the minutes of Parish Council meetings which tend to promote the need for
enhanced local services. Avanti has long established contacts with bodies such as SEEDA
(South East England Development Agency) (http://www.seeda.co.uk/) and the CBN
(Community Broadband Network) (http://www.broadband-uk.coop/) , which have
relationships with these local champions and can thus deliver the contacts rapidly.
In this instance, the champion is delivered the service he or she has been campaigning for,
and is given incentives to generate at least 10 users from the shared infrastructure that will
be sited at the champion‟s residence/business or some other suitable civic building such as a
church, village shop or sub-post office.
Business Commercial Hub
Until April 2007, Avanti was successfully delivering satellite multicast services to pubs,
hairdressers, chemists and grocery shops, many of which are outside areas well served with
broadband. These commercial businesses are eager to seek new sources of revenues and to
be seen to be delivering value to the local community. By adding Avanti Broadband to their
existing multicast service packages, many objectives are achieved simultaneously.
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The best example is Enterprise Inns, which has 9,000 pubs in the UK, which fall primarily into
the “community” category, meaning that they are mainly located in residential areas outside
big towns. Enterprise has expressed a strong desire to become a rural broadband champion.
In April 2007 Avanti demerged into two separate companies, Avanti Communications (the
provider of Internet access services) and Avanti Screenmedia (the provider of data multicast
services). Avanti Communications still provides services to Avanti Screenmedia and will
continue to seek such synergies with other companies in future.
Governmental procurement
Under EU rules governmental bodies including schools, libraries, local councils, etc. need to
put their procurement for services like acquiring broadband out to tender. Avanti bids on
such Requests for Proposals/Tenders, depending on the set-up, which varies on a case-by-
case basis. As a result of one such procurement Avanti has successfully contracted with the
West Midlands Regional Authority to provide services to 70 locations.
6.1.1.4 Quality of Service
In order to make the communications infrastructure as attractive as its urban equivalent, it is
important to offer the user tools which offer:
a variety of levels of service at varying price points
a high degree of flexibility in adding users and managing billing issues.
real Quality of Service at protocol level to support new services such as VoIP
The Avanti Broadband evolution has built on the achievements of the trial and now achieves
further levels of technological sophistication in terms of Operational Support Systems which
few competing services can offer, enabling the product to compete with any technology in
DSL enabled business park environments.
6.1.2 Cost and Price Structure
Avanti‟s costs in deploying service are different to those of its terrestrial competitors. Those
companies need to install large amounts of network infrastructure before signing customers,
which makes network deployment speculative. By contrast, once the Avanti Broadband hub is
deployed, Avanti‟s CAPEX is highly incremental/marginal since bandwidth can be ramped-up
by the satellite operator directly in line with new business.
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The prices charged by terrestrial operators do provide benchmarks for broadband services,
and Avanti needs to be competitive with these prices, even in areas where there is no direct
competition between satellite and terrestrial services. It requires keeping up to date with
changing prices in a very dynamic and competitive market.
So far the pricing on internet services has been very competitive in order to attract
customers. Now operators are moving towards pricing internet access commercially. As the
operators attract bigger numbers of users on existing networks, bandwidth might become
scarce and this will be reflected in the prices charged. There are already the first signs of DSL
providers introducing usage caps and charging more for specific uses of the internet
connection. This is partially driven by users who do not use bandwidth “fairly” but download
excessive amounts of for example movies and music.
In pricing its services Avanti will need to educate users clearly on what can be expected from
the various service packages in order to maximise their perceived value and to avoid any
disappointment in performance. Users will need to understand that they can have exactly
what they want at a fair price.
6.1.2.1 Costs
Avanti‟s cost structure for offering the service is broken down into three elements:
hub infrastructure costs;
customer premises infrastructure costs;
marketing and customer acquisition costs.
By using creative business strategies Avanti intends to significantly mitigate or share many of
these costs in order to give the Avanti product the maximum chance of reaching operational
profitability at the earliest possible moment.
Hub Infrastructure Costs
Avanti has a detailed view of the costs of equipment, hub and terminals, from nearly all DVB-
RCS equipment manufacturers, as a result of a recent procurement. Avanti also has a clear
idea of other costs, such as cost of customer acquisition, from its past experience. However
this information is either covered by confidentiality clauses or is company confidential
information. Costs are, in any case, highly dependent on factors such as the current business
climate, the volumes of equipment required and the precise specification required.
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For all these reasons we give, below, only an indicative idea of the costs involved. These
costs assume a direct model in which WiFi is NOT used, but in which each end user has his
own satellite terminal.
Category Cost
Satellite bandwidth €4000 per Mb per month
Terrestrial bandwidth €100 per Mb per month
Hub equipment & subscriber €1,500 per terminal (including amortization of the hub
equipment equipment)
Infrastructure financing current interest rate is 10.5%
Installation €350 per terminal
Table 15 : Indicative Costs of Satellite Infrastructure
Considering the hybrid DVB-RCS / WiFi model, and making assumptions about the number of
site visits required for installation, we can draw the following conclusions:
1. When only one WiFi user is added the costs rise significantly due to the additional
cost of the WiFi equipment, especially the WiFi access point.
2. As more WiFi users are added additional costs for WiFi end user equipment are
accrued, but there is a reduction in „shared‟ costs of the satellite terminal and WiFi
access point.
3. With three WiFi users the costs of the direct and WiFi models are equivalent.
4. With more than three WiFi users, the WiFi model is more cost effective. The cost per
user falls slowly with each extra user.
Customer Premises Infrastructure Costs
Avanti operates an in-house team of 5 installation crews. It does not normally outsource the
installation of Avanti since the process is relatively complex and requires considerable skill.
Many of Avanti‟s installers are former soldiers of the Royal Engineers and have broad skills in
satellite and wireless devices. With experience, training, and volume-driven economies of
scale the fully loaded labour cost to Avanti per installation during commercial roll-out is €
350.
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Customer premises infrastructure costs include:
Core DVB-RCS and Wig-Pop infrastructure
Core installation cost
End user Wi-PoP equipment for on average 10 end users
End user installation cost for on average 10 end users
Cable and other consumables
Marketing and Customer Acquisition Costs
During the early commercialisation Avanti has needed to experiment with different price
levels and marketing approaches due to the new nature of the home user offer in the
satellite field. Experience from the terrestrial consumer market has been acquired.
During future commercialisation, marketing costs will need to increase substantially in order
to get product awareness at the level of the home user and SMEs. The present assumption
for general marketing is 5% of turn over with an initial fixed budget to start off. Customer
acquisition costs are set at € 100. All these numbers will be reviewed during the project.
Partnership demand aggregators like SEEDA and Enterprise Inns will be good opportunities
to expand the reach of product awareness rapidly with a resulting lower cost then just relying
on direct marketing. Direct Marketing will be highly targeted on users that are in the un-
served areas and are able of being connected to a WiFi network based on a thorough
analysis of a combination of digital elevation maps combined with data on users that can not
be connected to terrestrial services and post codes. The result will be that individual users
and companies can be targeted.
Marketing costs, including the cost of customer acquisition, are currently estimated to be
around €200 per terminal.
6.1.2.2 Prices
Avanti has defined the following products for the UK market based on the BARRD trial. The
prices are based on average prices throughout Europe. In some of the countries, especially
the new EU accession countries, where the broadband competition is less developed, pricing
for the service may be higher and connection charges might need lower subsidy than in the
UK. The connection charges will be lower on average in most of the European countries due
to the high cost of labour in the UK on which these numbers are based.
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Business direct broadband. This provides connection to the internet at flexible speeds
of up to 3Mb in the forward path and 768 Kb in the return path (a number of different
packages are available). In addition a number of value added services are supported,
including VPN, VOIP, Citrix, Email, Web Hosting and static public IP addresses. This does
not use WiFi and has lower contention rates than the Residential/Business Broadband
package below.
Prices range from £70 to £276 per month, depending on performance, with a one-off
connection fee of £1500. This service is subject to a 12 month minimum contract.
Residential/Business Broadband. This provides connection to the internet and a
limited support for value added services, such as email. There are three standard
packages, with different levels of forward channel speed, return channel speed and
download limit.
Prices range from £25 to £45 per month, with a one-off connection fee of £99. This
service is subject to a 12 month minimum contract.
Private Circuits. This provides a company with the ability to connect remote sites and
to operate the sites as an own network, using special monitoring and control tools.
These services bespoke pricing.
Business Internet Continuity. This provides a satellite backup to a terrestrial Internet
connection. The satellite connection is not normally in use but it is activated automatically
upon detection of a failure of the terrestrial network. This is a new service with a low
one-off cost installation fee and monthly fees.
The price for Business Internet Continuity, a new service, is currently being formulated.
Other services are currently under development.
Notes:
• An average number of users per DVB RCS terminal plus WiFi is assumed. Connection
price will come down with more users. The service packages will be offered to SMEs,
SOHOs and Rural Communities targeted to their requirements. Avanti will in all likelihood
sponsor the connection charges in order to increase sign-ups during promotional periods.
• These prices are based on existing terrestrial broadband prices in the UK. The prices have
been set at lower end levels in order to be able to get the roll-out speed required.
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Estimated Future Prices
Avanti has estimated future (post 2007) price points using the techniques of Price Banding
and Relative Pricing as described below.
Price Banding and Market Capture
Assuming a $/€ parity and €20 as the target price for a basic service, the Ipsos-Insight curve
implies that if a €20 price would capture all of the forecast demand, €30 would capture 44%
and €40 would capture 15.7%. This is illustrated by the following table and figure:
Price $ % Captured 120.0
100.0
% Strand Capture
55 4.6
5.6 80.0
50
45 8.8 60.0
40 15.7 40.0
35 25.5
30 44.0 20.0
25 71.8 0.0
23 88.0 55 50 45 40 35 30 25 23 22 20
22 94.9 Euro Price
20 100.0
Source: Avanti Communications
Figure 11: Relative Demand Capture by Price – Avanti
A pricing policy could therefore set price bands based on service/performance options to
capture the full potential market. For example, assuming that €20 is the target price for a
basic service (ie the price at which all of the demand would be captured), the Ipsos-Insight
curve would suggest a pricing strategy similar to:
A „Premium‟ service at €50 to capture ~5% of the demand
A „3*‟ service at €40 to capture ~10% of the demand
A „2*‟ service at €30 to capture ~30% of the demand
A „1*‟ service at €25 to capture ~25% of the demand
A basic service at €20 to capture ~30% of the demand
The actual service content of each of the services would need to be defined, but our findings
indicate that these should be at least the equivalent of services currently on offer at similar
prices in the terrestrial market.
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However some care must also be taken with this approach because:
Different markets across Europe are in different states of maturity, and it will take
time for them to converge.
Different markets traditionally have a price differential across Europe, which would
indicate that some markets would prices higher than those above for equivalent
services.
Rural demand may be prepared to pay a premium above terrestrial prices for similar services.
Unlike Consumer broadband, it can be seen there is a wide variation in tariffs across Europe
even in a „mature‟ market, reflecting the differences in demand and national operators.
Relative Pricing
As well as statistics on the disposable income, Eurostat maintain statistics on the GDP per
capita for most of the EU states and a number of the other countries of interest to STRAND.
The table below9 shows the GDP per Capita relative to an average across all countries
(average = 100), together with a spread indicating high and low values for regions within
that country.
GDP PPS
Hi Lo Avg multiplier
Austria 1.07
Belgium 250 81 123 1.07
Denmark 136 136 136 1.19
Finland 163 87 118 1.03
France 180 60 116 1.01
Germany 166 79 124 1.08
Greece 97 62 80 0.70
Ireland 143 96 130 1.14
Italy 156 71 117 1.02
Luxembourg 1.92
Netherlands 171 94 134 1.17
Portugal 104 62 78 0.68
Spain 130 60 96 0.84
Sweden 156 104 118 1.03
UK 153 76 118 1.03
Baltic 46 35 41 0.36
Poland 68 32 45 0.39
E Europe 112 36 59 0.52
Bul/Rom 39 21 27 0.24
Turkey 0.46
Table 16: GDP per Capita for Europe
9
Taken from Eurostat Statistics in Focus Theme 1; 04/2002 and 07/2003
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We have based our pricing for professional broadband upon these averages as they better
reflect the „economy‟ of a country that an SME or SOHO will be operating within.
Averaging the assumed prices to €60 for SOHO, and applying the multipliers from tables
above we see the following tariffs from 2007 to 2020:
GDP
Multiplying STRAND Country Year:
Country / Group Factor Start price Start Price 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Austria 1.07 60.00 64.48 64.48 60.61 56.97 56.79 56.61 56.43 56.25 56.07 55.90 55.72 55.54 55.36 55.18 55.00
Belgium 1.07 60.00 64.48 64.48 60.61 56.97 56.79 56.61 56.43 56.25 56.07 55.90 55.72 55.54 55.36 55.18 55.00
Denmark 1.19 60.00 71.29 71.29 67.01 62.99 62.27 61.54 60.81 60.09 59.36 58.63 57.91 57.18 56.45 55.73 55.00
Finland 1.03 60.00 61.85 61.85 58.14 54.65 54.69 54.72 54.75 54.78 54.81 54.84 54.87 54.91 54.94 54.97 55.00
France 1.01 60.00 60.81 60.81 57.16 53.73 53.84 53.96 54.08 54.19 54.31 54.42 54.54 54.65 54.77 54.88 55.00
Germany 1.08 60.00 65.00 65.00 61.10 57.43 57.21 56.99 56.77 56.55 56.33 56.11 55.89 55.66 55.44 55.22 55.00
Greece 0.70 60.00 41.94 41.94 39.42 37.05 38.69 40.32 41.95 43.58 45.21 46.84 48.47 50.11 51.74 53.37 55.00
Ireland 1.14 60.00 68.15 68.15 64.06 60.21 59.74 59.27 58.79 58.32 57.84 57.37 56.90 56.42 55.95 55.47 55.00
Italy 1.02 60.00 61.33 61.33 57.65 54.19 54.27 54.34 54.41 54.49 54.56 54.63 54.71 54.78 54.85 54.93 55.00
Luxembourg 1.92 60.00 115.46 115.46 108.53 102.02 97.74 93.47 89.20 84.92 80.65 76.37 72.10 67.82 63.55 59.27 55.00
Netherlands 1.17 60.00 70.24 70.24 66.03 62.07 61.42 60.78 60.14 59.50 58.85 58.21 57.57 56.93 56.28 55.64 55.00
Portugal 0.68 60.00 40.89 40.89 38.43 36.13 37.84 39.56 41.27 42.99 44.71 46.42 48.14 49.85 51.57 53.28 55.00
Spain 0.84 60.00 50.32 50.32 47.30 44.47 45.42 46.38 47.34 48.30 49.25 50.21 51.17 52.13 53.08 54.04 55.00
Sweden 1.03 60.00 61.85 61.85 58.14 54.65 54.69 54.72 54.75 54.78 54.81 54.84 54.87 54.91 54.94 54.97 55.00
UK 1.03 60.00 61.85 61.85 58.14 54.65 54.69 54.72 54.75 54.78 54.81 54.84 54.87 54.91 54.94 54.97 55.00
Baltic Avg 0.36 60.00 21.32 21.32 20.04 18.84 22.12 25.41 28.70 31.99 35.27 38.56 41.85 45.14 48.42 51.71 55.00
Poland 0.39 60.00 23.59 23.59 22.17 20.84 23.95 27.05 30.16 33.26 36.37 39.47 42.58 45.68 48.79 51.89 55.00
E Europe Avg 0.52 60.00 31.10 31.10 29.24 27.48 29.98 32.49 34.99 37.49 39.99 42.49 44.99 47.50 50.00 52.50 55.00
Rom/Bulg Avg 0.24 60.00 14.15 14.15 13.30 12.51 16.37 20.23 24.10 27.96 31.82 35.68 39.55 43.41 47.27 51.14 55.00
Turkey 0.46 60.00 27.35 27.35 25.70 24.16 26.97 29.77 32.57 35.38 38.18 40.98 43.79 46.59 49.39 52.20 55.00
Table 17: Estimated SOHO Tariff Across Europe from Launch to 2020
6.1.3 Service Partnerships
Avanti has long recognised the importance, to small companies, of establishing service
partnerships, which facilitate fast growth. Within its former DVB-S Internet business Avanti
had three operational reseller agreements that helped it to deploy the Avanti technology into
new markets, for example with the Federation of Small Businesses that operated a VSP with
40,000 customers into which the Avanti product was sold. In order to deploy the BARRD trial
Avanti made agreements with partners in two key areas
Technical infrastructure and bandwidth;
Suppliers of value-added applications.
For its commercial roll-out it is likely that Avanti will further extend its partnerships in these
and other areas, described below.
6.1.3.1 Bandwidth Provider
During the BARRD trial Avanti relied on a service partnership with an existing provider of
satellite bandwidth suitable for satellite broadband delivery via DVB-RCS. The bandwidth was
provided by Eutelsat, through its W3 satellite, and the DVB-RCS equipment was from Nera.
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Post trial Avanti ran an ITT to ascertain the best supplier for the commercialisation phase and
chose to rent bandwidth from Intelsat, through its IS-903 satellite, which gives coverage of
Western Europe and parts of Eastern Europe and Northern Africa. At the same time Avanti
purchased a hub from Newtec, which it currently operates from a site in north London.
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Figure 12: Intelsat Satellite Coverage – Dish Sizes
Figure 12 shows the coverage in terms of different sizes of satellite dish that will be required
for optimum performance. As one moves towards the edges of the satellite coverage the
required satellite dish for a given performance gets larger.
Avanti is currently procuring its own satellite, HYLAS, to provide bandwidth from late 2008.
HYLAS is expected to significantly reduce the costs of satellite bandwidth but expected
savings are company confidential information.
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HYLAS is an innovative multimedia communications system based on Astrium‟s highly flexible
payload onboard the ISRO I-2K small satellite platform (up to 3kW). The HYLAS system will
provide broadcast and fixed satellite services with a European footprint, and will provide a
high degree of in-orbit flexibility to enable the re-allocation of satellite resources across
missions as needed.
HYLAS will be based on a dual-mission concept, providing access capabilities at both Ku and
Ka frequency bands, the communications payload offering:
8 Ka-band spot beams capable of delivering broadband and interactive TV services as
well as High Definition TV (HDTV) broadcasting across the UK, Ireland, the Iberian
Peninsula and Central Europe;
A single Ku-band (BSS) European beam suitable for traditional Direct-To-Home (DTH)
TV, HDTV and data multicast services over all of Western and Central Europe.
HYLAS has capacity to support the traffic of up to 300,000 broadband users. The Hylas
coverage is shown in Figure 13.
Figure 13: Hylas Coverage
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6.1.3.2 Content provision
Avanti will continue working with companies like Azur to supply SMEs with Business One, an
integrated business management software product that allows SMEs to run a completely
integrated solution from sales to ordering to finance to invoicing, help desk, etc.
Avanti will team up with other content and service providers where it sees fit. Logical choices
are telephony operators to be able to integrate voice traffic in the Avanti service provision,
security solutions, content filter, VPN, firewall, remote storage, Asps, gaming, etc.
6.1.3.3 Local Sales and Marketing
Local sales and marketing are hard to run from one central location. Local sales and
marketing teams will therefore need to be employed in order to service the local markets
best. The sales strategy will vary per country. This can be done by partnering with a local
firm in the field or by starting a local operation. The local sales activities will tie in with the
sales strategy.
Global branding and advertising promoting the Avanti brand will be centrally coordinated.
6.1.3.4 Installation
Avanti can not rely just on its own team of installers in the medium term. In future
installation will continue to be driven by a dedicated team of installers at Avanti but in
addition partnerships with existing install companies will have to be forged. In this process
Avanti will work with targeted install companies and supply the company with exact written
instructions to what is required to perform a successful install. This may mean that Avanti will
have to train the installers at the existing firms in order to make sure that the quality of
installations is not compromised. Avanti is talking to one of the biggest installation companies
for satellite solutions in the UK to enhance the roll-out capability.
The importance of installation is very high. Feedback from installations, whether from
Avanti‟s own team or a local partner, will be analysed and further improvements made to
procedures where necessary.
The novel approach used by Avanti is to base the initial assessment of the viability of an
effective installation on a GIS system. It combines aerial photography with a digital elevation
model to see where the combination of DVB RCS is possible. This, combined with post code
information, leads to a clear list of properties that can be clearly targeted. This novel
approach helps in reducing the costs of surveys and installations.
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6.1.3.5 Help Desk and Call Centres
The help desk and call centre functions are crucial. Avanti will have to keep control of this
function. Outsourcing and/or partnering on this aspect will only be effective once all issues
have been scripted and the majority of the problems can be dealt with on a standardised
basis. It is important to be able to escalate a support call to an engineer of a business
manager once it becomes clear that the user has a specifically difficult question. The
escalation procedures are crucial. Many call centres lack the latter which leaves users
frustrated and inclined to churn. Avanti has a good track record in terms of help desk. The
operations need to be scaled up to deal with a major roll-out.
In terms of European expansion a model can be chosen where the help desk and call centre
is centralised and employs staff with local language skills or a model where local call centres
will be erected in order to deal with local support issues. The choice will be driven by a
combination of cost, availability and quality.
Outsourcing may be a solution, although the experiences of companies having entered into
these agreements vary widely and this type of service agreement will have to be approached
with great caution.
6.1.3.6 Local Partners
Avanti is seeking more partners in additional countries to facilitate a full commercial roll-out
in other European countries. There is a particular interest from the accession countries in
satellite based broadband services. Avanti is talking to one particular operator that has
excellent coverage in many of these countries.
6.1.3.7 Other Routes to Market
Besides direct sales and marketing, other routes to market in a European setting are crucial.
Some of the routes are listed below:
Links with eris@ and other regionally based initiatives across Europe.
Opportunities with the EC
Local satellite or general telecom operators and resellers.
Local broadband champions in the form of individuals, towns or regions.
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6.1.4 Sale strategy
6.1.4.1 Introduction
The objective of the Sales Strategy is to communicate the commercial model to customers in
terms of a well-researched set of propositions. The key to the Avanti proposition is two-fold:
shared access to bandwidth enables application providers to access broadband
service at a fraction of the cost of a dedicated connection;
re-use of bandwidth by offering Internet access to Internet users with different usage
patterns and creating incentives for users to download during quiet hours in the late
evening and at night.
In communicating the benefits of Avanti Broadband to potential customers, further work will
continue to be done in refining the proposition and in creating a suitable sales and marketing
structure.
In refining the commercial proposition into a form that can be easily understood by potential
customers, account is taken of:
Proposition – Avanti‟s experience in recent years has taught it that strong technology
and pricing are not sufficient. Without defining a proposition very clearly through a
classic product management process, and communicating to the market in the right
way technology per se does not sell, regardless of price.
Product Feature Set – beginning with the existing market research, a further exercise
is conducted to translate raw data on total market size into specific outputs to
calculate the quantified and addressable demand for services. When products are
clearly defined and prices set, this data can be further analysed to establish accurate
forecasts of achievable revenues per market and to establish the appropriate sales
channels.
Competition – the competitive environment will continue to be monitored to
determine priority markets and to respond to changing market demands and
competition in what is a fast moving market
Market research – market research will continue to be carried out, by means of focus
groups and questionnaires, in order to determine which elements of the service and
which applications are most highly value by users. Feature sets and tariffs should only
be changed based on solid evidence from market research.
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6.1.4.2 UK Sales and Marketing
The UK market for Avanti Broadband is characterised by:
The existence of a significant niche of citizens whose locations continue to be unserved
by other broadband technologies
The existence of niches that can be addressed by satellite, regardless of existing or
planned other broadband services.
The strategies needed to address these markets are tailored to take into account the
different types of customer. There are two separate sales activities.
A larger team of sales personnel, tasked with closing sales amongst broadband
champions. These are regionally based and are organised in a matrix management
structure. The generation of leads is by a field marketing manager, whose team works to
identify initial leads through regional market research and through the co-operation of
bodies such as SEEDA. Leads are qualified before passing them to the sales personnel.
A small team of key account sales managers, tasked to recruit customers able to deliver
large volume, for example the schools mentioned above. Again these personnel regionally
based.
6.1.4.3 Field Sales Marketing
During commercialisation Avanti targets users in specific areas of the UK in the initial roll-out.
The sales strategy targets Broadband Aggregation boards, Community Champions and Direct
Marketing in areas earmarked as high potential.
Avanti uses a combination of sources to identify communities that are unserved by terrestrial
broadband technologies. Many sources of information are publicly available.
The targeting of specific uses is based on a combination of assessment of the availability of
DSL based on Postal code. Once the areas have been identified, maps based on Aerial
Infrared Photography are provided by Infoterra in the UK and by others in Europe. These
maps are combined with Digital Elevation Models in order to assess which are the best
possible areas where a combination of DVB RCS and WiFi is possible and how many end-
users are potentially reachable. Once this assessment has been made direct mailing and calls
are made to the end-users in those areas and users are signed up.
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6.1.4.4 Key Account Marketing
A range of activities are utilised to support key account marketing including:
Public relations campaigns
Public speaking engagements
Direct mail campaigns
Brochures
6.1.4.5 Website
Avanti has started to prepare for roll-out on a general scale in the UK and other targeted
areas in Europe. An important tool in the Direct Marketing area is a Web-site for selected
regions containing inter-alia:
An explanation of services offered and pricing
Registration for potential hosts.
A GIS tool is used to assess the install situation, enabling Avanti to decide whether the install
is viable on a WiFi basis. If not it can still be possible to offer service, albeit at a higher
equipment and installation price.
6.1.4.6 European Sales and Marketing
Avanti will not open offices in countries outside the UK since the cost is too high initially.
However the market definition work will produce a detailed view enabling accurate decisions
to be made on which markets are priorities and how products should be defined for these
markets. Several international business development managers will be retained to seek
franchise partners in those markets. The partners will be offered:
Low entry cost of service- payment for hardware and service only when customers are
signed up
Marketing materials including translated brochures, local language web pages and
business planning tools
Area exclusivity for a defined period of time (initially one year)
Support from back office systems such as the Customer Relationship Management
System
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A partner will be chosen according to its:
• Existing sales presence in the telecommunications market
• Ability to carry out installations, first line customer support and billing
• Ambition
This represents a low risk strategy by which Avanti Broadband can build scale in the UK and
enter other markets.
6.1.5 Risk Analysis
6.1.5.1 SWOT Analysis
The following analysis, in table below attempts to summarise the competitive position with
specific regard to the use of the Avanti product.
Strengths Weaknesses
Eight years experience in team of 65 staff working
Not yet launched a DVB-RCS service. Limited
with DVB-S and DVB-RCS with a profitable and
corporate resources.
rapidly growing business in hand
Significant partnership agreed with SEEDA for Avanti, as a relatively small UK based business,
marketing which can deliver major installation that may lack credibility in front of some
volumes without large sales operation International customers
The trial has provided essential experience to enter Not commercial operational in satellite broadband
the next phase of development and roll-out Lessons area, but experience in rolling out DVB-RCS
have been learned from early entrants. broadcast- and wireless network.
Supportive partnerships with equipment vendors and
Development work on product still required
bandwidth supplier agreed
SME and corporate marketing skills in Screenmedia Lack of consumer marketing experience.
Management strong in the area of satellite
entrepreneurship in the UK, with significant
experience of developing and deploying two-way
satellite systems and credibility in the capital markets
Previous experience of deploying rural internet Large pub market gives opportunity for
services on RIA trial and commercial operations competitors to enter market
Able to react to client and market developments very
quickly due to smaller size and experienced team
Combination of WiFi with DVB RCS lowers connection
costs compared to pure DVB RCS play
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Strengths Weaknesses
End user focussed as opposed to larger competitors
Marketing agreements with Telewest and Federation
of Small Business for DVB-S can be leveraged during
commercial roll-out.
Originality of services, products and business model is Avanti is a small business that may lack credibility
differentiating Avanti from competitors in front of some customers
Opportunities Threats
Closing the Rural/digital Divide supported by EU and Interest of Governments vis-à-vis rural/digital
local governments. Financial and market access divide diminishes. Note that this will only happen
support when gap is closed, which will not happen soon.
Exploit first mover advantage and marketing strength Other service providers seeing market potential
in pub market to seize market share could move in.
Exploit other partnerships in different sectors to Risk of over-expansion too soon may threaten
expand beyond initial RBP focus Avanti‟s existing profitable business.
First mover advantage and proven business model will Fast moving product and pricing developments in
enable Avanti to expand its offering over seas with the terrestrial DSL area, which has effects on
the right partnerships. pricing rural broadband access
Available bandwidth and hardware at high prices.
Limited competition in the rural access product area
Launching own satellite and using open standard
gives significant advantage
hardware will mitigate this threat.
Using open standards like DVB RCS helps lowering Big telcos have staying power although are not
future prices for hardware focussed on the truly unconnected clients
Fast moving market. Avanti exploits pricing/ quality
opportunities and finds niches where big telcos lag. Market power may enable big telcos to seize
Smaller nimble companies like Avanti can react quickly some business where networks provide coverage
and effectively
Use partnerships to expand abroad, with nimble
service focussed partners.
Table 18 : SWOT Analysis – Avanti
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6.1.5.2 Risk Factors in Avanti’s business
The following attempts to quantify the principle risk factors and how they are mitigated.
Risk 1: Reliance on Core Management team members
Mitigation: Avanti has previously been reliant on two or three key directors. However it
took the decision to invest significantly in high quality managers who can grow the business
rapidly and securely. Avanti now has a larger, more well-rounded and senior management
team than even most medium sized businesses can claim. Key man insurance is being
implemented for all senior management team members.
Risk 2: Technology Risk
Mitigation: DVB-RCS is a tried and tested technology. On the WiFi side the technology is
in flux. The tried and tested technologies 802.111a and b are the technologies implemented
by Avanti at the moment. There are security related issues with these technologies that are
being remedied by the manufacturers of the software and equipment. Moving to more secure
versions within the 802.11 standards and software solutions will happen.
Risk 3: Operational Risk
Mitigation: Typically small companies can make mistakes in execution. This is why Avanti
has hired a very highly specified management team. Besides its longstanding experience in
the industry, this team does have access to the existing experience of Avanti as an additional
source of knowledge and practical skills.
Risk 4: Competition
Mitigation: Avanti has learned from the experiences of Avanti and market players. The
service proposal and rigorous implementation of high Quality of Service are crucial in
acquiring and especially retaining clients. By having its own dedicated satellite hub, caching
and dedicated backhaul, Avanti can control its QoS better then competing resellers who do
not have this advantage. Besides guarding its QoS, Avanti is dedicated to keeping the cost of
providing the service down in order to be able to compete effectively on price when
compared to its direct and indirect competitors.
Risk 5: Security
Mitigation: Tampering and misuse of any network lead to considerable risks of losing
valuable information and damaging the nominal operation of the core network components
and the service. The sharp increase in DOS attacks, worm- and virus infection in the recent
years illustrates the need for a hardened security infrastructure and up-to-date security
policies. Avanti acknowledges these issues and prioritises the data integrity and security in
the design of the service.
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6.1.6 Conclusion
Avanti has a positive view about the sustainability of its satellite Internet services. And they
are not the only ones. Since the Company floated on the London stock market, three years
ago, Avanti has attracted substantial external funding to support its growth in this and other
areas. Avanti continues to develop its systems, especially in the areas of value added services
and in its operational systems. This optimism is backed by a substantial body of information
gathered from governments, business consultancies and market analysts. It is also been
tested by sophisticated financial models. The experience of early entrants in the satellite
Internet market has been taken into account.
Avanti is expecting to significantly reduce the costs of satellite bandwidth by launching its
own satellite, called HYLAS, in late 2008. HYLAS is an innovative multimedia communications
system based on Astrium‟s highly flexible payload onboard the ISRO I-2K small satellite
platform (up to 3kW). The HYLAS system will provide broadcast and fixed satellite services
with a European footprint, and will provide a high degree of in-orbit flexibility to enable the
re-allocation of satellite resources across missions as needed. HYLAS will be based on a dual-
mission concept, providing access capabilities at both Ku and Ka frequency bands. HYLAS has
capacity to support the traffic of up to 300,000 broadband users.
The sustainability of the project‟s educational applications is unclear. It is uncertain whether
such applications will fit into the portfolio of commercially-viable value-added services to be
directly offered by Avanti and, if so, which business model might be used for the purpose. It
is likely that such applications would be marketed by a different organisation with specialist
educational experience and which would utilise the satellite broadband as a virtual network
operator.
A number of issues have been identified that need to be addressed, for example:
How to define a compelling commercial offer when many educational applications are
already available through the standard Internet.
Whether to accommodate a variety of licensing models, including open source.
Whether support by the appropriate authorities will be required and how such support
can be harnessed.
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6.2 Hellas Sat Broadband Business Modelling
6.2.1 Market Assessment
6.2.1.1 Target Counries
The offering of broadband services of HELLAS SAT is focused on the countries of South
Eastern Europe where Hellas Sat has strong coverage (Albania, Bosnia - Herzekovina,
Bulgaria,Croatia, Cyprus, FYROM, Greece, Romania, Serbia) -Figure 14. These countries with
the exception of Greece, and Cyprus where telecom infrastructure is more developed, have
many similarities in population density, terrain, and, partly as a result of these factors,
telecommunications infrastructure.
Slovenia Romania
Croatia
Bosnia
Yugoslavia
Bulgaria
FYROM
Albania
Greece
Cyprus
Figure 14 : The Target Countries of South Eastern Europe for Hellas Sat
The area combines a mixture of countries already within the EU, as well as acceding states
and nations that intend to join the EU over the next 5 years. As such, they all have either
open telecommunications markets or have accepted the EU Acquis, which demands the
opening of these markets as a condition of membership.
The commercial offering of broadband services of HELLAS SAT started at the beginning of
2006 and it was the result of the project “Hellenic Offering for Satellite Telecommunications”
(HOST). HOST is a project funded by ESA. The geographic area that Hellas Sat 2 covers is
characterized by isolated communities and less favoured regions that lack access and supply
of information communication technologies (ICT), including Internet access, broadband
connections, in some cases even basic TV and mobile services.
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Figure 15 : Hellas Sat coverage areas (EIRP)
A general overview of the main geographic, demographic and economic parameters
ispresented in Table 19. The geographical coverage of the region sums up to approximately
412 sq. km with a total population of almost 70 million people with an average GDP per
capita of 8,500 € over a wide range.
Area
Population Inhabitants GDP per
Country (000 sq (m) (per sqkm) capita ($)
km)
Albania 29 4,0 138 2.000
Bosnia 51 4,1 80 1.400
Bulgaria 110 9,0 81 6.500
Croatia 56 4,8 85 9.800
Cyprus 9 0,8 85 15.000
FYROM 25 2,1 82 5.100
Greece 132 11,0 83 19.100
Romania 237 22,3 94 7.600
Serbia 102 10,7 104 10.156
Table 19 : Demographic Overview in Hellas Sat Target Areas
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Table 20 indicates the key telecom metrics for the Hellas sat target countries. Mainly due to
the geographical peculiarities of the region, the distribution of the fixed line infrastructure is
concentrated in most of the countries ranging from 78-99% in urban areas. This
concentration conflicts with the population distribution.
This conflicting characteristic can be identified by the distribution of population per sq. km
which although in most countries ranges between 80 and 85, the equivalent ratio for wireline
spans from 7-52 lines per sq. km. The picture is similar when looking at mobile market data
with the exception of Albania where there is a big discrepancy between the mean distribution
of wireline and mobile wireless infrastructure. Additionally, even in countries like Bulgaria
where there seems to be an increase of internet-industry related activities, the digital divide
is even greater within the same country with the use of internet being correlated with higher
education and wealth in big cities as only 3% of the internet users are from smaller cities and
rural areas.
Mobile Telephone
Country Fixed Tel Lines ISPs Internet Users
Lines
Intern
Tota Lines Lines et Internet
Lines Total Lines Total
l /100 /100 Users Users
/sqkm (mn) /sqkm (mn)
(m) inhab inhab /100 /sqkm
inhab
Albania 0,1 5 6,9 0,8 19 26,2 6 0,08 2,0 2,8
Bosnia 0,9 11 8,8 0,0 9 7,2 3 0,05 2,4 1,9
Bulgaria 3,2 37 30,0 1,1 30 24,5 112 0,64 8,2 6,6
Croatia 1,8 38 32,3 2,0 47 40,0 4 1,10 16,2 13,8
Cyprus 0,4 61 51,9 0,4 60 51,0 6 0,20 30,0 25,5
FYROM 0,6 27 22,1 0,4 19 15,6 6 0,10 4,3 3,5
Greece 6,0 57 47,3 9,0 75 62,3 27 1,70 15,8 13,1
Romania 4,4 19 17,9 4,9 22 20,7 40 2,00 8,9 8,4
Serbia 2,5 24 24,5 2,7 26 26,6 8 0,60 6,0 6,2
Table 20 : Existing Telecom Infrastructure In Hellas Sat Target Areas
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The picture of the internet market across the target region generally varies not only due to
variations in infrastructure but also to the penetration of ICT as well as the e-readiness
indicators for each country including computer literacy. The wide range of GDP per capita will
have a dramatic impact on the affordability of advanced telecoms applications in the different
nations. Additionally, it is expected to have an impact on the eReadiness indicators that for
the target region in terms of internet users only span from 2% to 40% and ICT expenditure
as a percentage of GDP from 2% to 6% (ITU 2002). The number of fixed telephone lines
provides a coarse guide for the extent of terrestrial network infrastructure.
The Telecom Sector is characterized by continuous and rapid changes in technology,
products, services, needs, user culture, as well as the way the market and businesses are
organized. The key factor is the convergence of technologies, products and services (telecom
and IT) and the merger of the relevant markets. The demand is transposed from fixed
wireline telephony to wireless and value-adding services as well as systems that can transmit
all voice, data, and image.
6.2.1.2 Educational Market
The broadband offering from HELLAS SAT has deployed pilot-sites in areas that are
considered to be critical for the evolution and success deployment of the e-Europe plan. In
the Frame of RW, HELLAS SAT will evaluate the “Educational Market”. For this reason, during
the project the key-figures involved will be updated for the target area, which is Greece, and
the offering business model adjusted to the highlighted requirements in meeting these
targets.
It is challenging to determine precisely what could be fuelling the rapid growth in demand for
satellite services. Possible explanations can be described following the analysis of both
consumer appetite and demand and the offering by new innovative and competitive
technologies.
Growth in social prosperity and business competitiveness has generated a desire and
consequently a need for faster, better, cheaper and more powerful communications.
However, the convergence revolution (especially as expressed by EU in order to bridging the
digital divide, to improve daily life, to improve the provision of social services and finally
securing an effective competition framework) is expected to help grow services over satellite.
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User Demand and Market Analysis determine the markets and their respective sizes for a
range of satcom applications.
The pilot sites/learning hubs will be able to produce a user feedback summary of findings
which in effect will ensure a higher level of user needs‟ and market understanding. This will
be beneficial but also crucial in the assessment and finding process for suitable service
propositions.
The segmentation of the Satellite Services market is described in terms of applications, users
and geography. In general however, it is necessary to combine space segment on a
particular satellite, use appropriate equipment (the HUB) and supply content or service. It is
common that the end user buys a turn-key solution from a telecomm operator or a provider
who owns the HUB, who in turn buys capacity from a satellite operator. In the case of
offering satellite broadband services, HELLAS SAT is the service provider as well. HELLAS
SAT, owns and operates a hub/teleport and sells services directly to the customers.
Owning and operating a satellite hub is a costly investment with high expenses. The business
structure is more complicated and besides marketing and support, hub operations and
network administration is essential. It is possible though to offer customized services allowing
better flexibility and customer satisfaction. As mentioned, this requires a higher starting
investment and more complicated organization as well as specialized personnel for hub
management and support. On the other hand, profit margins are considerable higher and the
targeted group is larger due to more and better offered services.
The objective of the pilot applications is the assessment and validation of potential demand
for satellite services among the population of the target area. The key factors influencing the
penetration of satellite services are the following:
Need and ability to pay for broadband satellite applications and services
Relative wealth of each country (GDP, GDP per capita, % GDP spent on services
baring in mind that eServices are not a new sector but just an alternative way to
deliver existing services).
Existing familiarity with IT systems either for work or entertainment purposes
Relative penetration of PC‟s and solutions that new media technologies provide (e.g
internet, multichannel TV etc)
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Significant presence of corporate entities with communication needs across multiple
locations
Share of the region‟s population workforce and economic activity.
The output of pilot applications will be the user-profile which will describe a number of
characteristics (such as geographical distribution, requirements of their needs, expectations,
skills and qualifications, social – economical background) of potential users whose needs,
expectations and requirements must be met by providing satcom services. The purpose of
the user profile is to ensure that potential user disabilities are taken into account and that the
satcom services suits to potential end users.
Based on the pilot trials in the frame of RW, HELLAS SAT will be able to tailor service
packages that meet better the educational market requirements.
Education
In the 21st century, people will have to learn more than ever before. Especially for global
organizations, live classroom-based training is becoming too costly and cumbersome. Even if
employees had the time to attend all the courses and seminars and to read all the books and
reports they should to remain up-to-date in their area of work, the cost of such learning
would be prohibitive. The need to transform organizations‟ learning practices points to a
more modern, efficient, and flexible alternative: e-Learning. The mission of corporate e-
Learning is to supply the workforce with an up-to-date and cost-effective program that yields
motivated, skilled, and loyal knowledgeable workers. The market for e-learning services can
be partitioned according to the potential customer segments. These are:
Education Authorities (both public and private)
Corporate ( enterprises that need to provide e-training to their employees)
Students (retail end-clients)
The following table contains the official data from the Greek Ministry of Education and
EOMMEX (Hellenic Small and Medium Enterprises Organization) regarding the education
addressable market. Medium sized businesses are receivers of training and information from
the chambers of commerce, while the larger organisations provide e-training programmes for
their employees.
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Players Level Number
Education Authorities Primary 11.768
Secondary 3.921
Tertiary 167
Corporate Small 462.351
Medium 2.531
Large 256
Students Primary 791.041
Secondary 750.891
Tertiary 240.336
Table 21 : Education Market for Satellite Broadband
It can be estimated from the above table that around 3500 installations can be targeted. The
estimates given in the last column of the above table for the targeted Hellas Sat broadband
services market, assume usage mainly by primary and secondary level education authorities
as the universities have already substantial connectivity infrastructure (at least in Greece, this
needs to be further examined for the Balkans). In addition medium and large corporate users
are expected to represent a good customer base.
6.2.1.3 DORY project : case-study of government driven demand
The main goal of DORY project is to expand and modernise Greece‟s public administration
units in remote areas through a satellite broadband network supporting advanced added
value services. Thanks to satellite technology, this network will close the “digital gap”
connecting remote sites to an IP broadband network.
Thirteen (13) governmental agencies have to be connected to remote offices through a
terrestrial access network to reach the HUB and then through IP satellite network to reach
the remote sites. This is called the IP network. This IP network should enable to provide
administrations with Intranet/Internet/Voip services/added value applications
(Videoconference, video streaming).
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In addition, a dedicated VSAT network have to be build for the civil aviation needs (radar
monitoring and transmission ).
The IP proposed network is mainly made of :
• a terrestrial access network (connecting the 13 agencies to the central land station)
• 1620 remote sites (1551 fixed terminals, 17 mobile on ships terminals, 11 on vehicle
terminals, 41transportable terminals)
• a central land station (RF 6.3m/200W + DVB RCS HUB, IT equipment, Management
network, Voip platform) with a new refurbished building to host equipment and
operations teams
• a state of the art Voip network
The proposed VSAT network is mainly made of :
• a hub station (2.4m/16W RF + baseband modems)
• 53 remote sites (40 terminals for transmission network, 13 for monitoring network)
Satellite capacity will be used from Hellas Sat 2 satellite.
6.2.2 Service Offering
Internet is traditionally provided to the end-customer via ISPs. However, the new model of
internet provision that has already been adopted by some telecom operators integrates the
internet connectivity into the basic service, where the relationship with the customer is, and
all other services are offered additionally to that. Likewise, in the case of HELLAS SAT net!
we assume the internet feed being an integral part of the basic service.
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Figure 16 : Hellas Sat Internet Service Provision Models
According to this model, Hellas Sat will have to assume an aggregator role for:
Automation and support of business operations
Development and support of Offerings Portfolio
New Service Development
Customer Support
Cost–effectiveness of operational system.
The past few years there have been significant investment and development in such systems
by other companies in the OTE Group and especially the ISP provider. Some of the
important IT infrastructure components that have been adopted or are in the process of
adoption to be used for the HELLAS SAT broadband commercial offering are the following:
SLA management (Trouble ticketing, monitoring, SLA)
ERP inventory, procurement
Content Management/Application server
Postpaid & Bill project
CRM Sales administration
Reporting - Business Intelligence
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During the RW project the modelling of the various business elements of the offering are
evaluated and trade-offs are made, taking into account the results from the pilot trials in
terms of user requirements and type of use, pricing policy, service level requirements etc.
The initial baseline for the HELLAS SAT broadband offering is to offer “Managed BB Access
Connectivity” (including the satellite capacity, the hub services, the user terminals and the
related management aspects).
At the start of the commercial phase of the HELLAS SAT Net!, which is the broadband
offering of HELLAS SAT, a range of services are used as a baseline for a more precise
determination of the offerings according to the combined results on user demand from the
pilots as well as the market investigation. HELLAS SAT Net! Is offering services “families” that
include:
1. HELLAS SAT NET! basic offering - Fast Internet
2. HELLAS SAT NET! - VPN connectivity
3. HELLAS SAT NET! + Wi-fi
Value added services include : Teleconference, Telemedicine, Teleducation, VOIP, Email,
FTP, Web Hosting, Video Streaming, Video on Demand, VPN. Value- added services (VAS,)
like the ones applied in the pilot set-ups, will be offered in addition to the basic HELLAS SAT
Net! services families. The initial standpoint is that Hellas Sat serves a role of a holistic
satellite services provider (aggregator) with back-to-back agreements with the application,
content, as well as vertical service providers.
The successful completion of the RW project will result in the comprehensive modelling of
the commercial offerings for the services for educational purposes based on a user-centric
approach. This might suggest a different and more cost-effective approach of delivery the
services to the educational sector.
HELLAS SAT broadband offering addresses more than one specific market and, thus it may
have multiple positioning strategies. The initial guidelines for this positioning are as follows:
Provide Broadband Internet Access to areas lagging behind in broadband penetration.
Provide Alternative Access at competitive prices by ”filling-in” the gaps in current
offerings portfolio.
Reach the retail end-user through B2B clients
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Its basic offering model be VAS – ready
Encourage TV clients to gradually turn into resellers for telecom services and provide
the interactivity interface with the end-user.
Competition is distinguished into the following categories:
in terms of speed: upload / download, or symmetry
ISP related Services
VAS Services
6.2.3 Cost and Price Structure
6.2.3.1 Cost
The % contribution of each component has to the final monthly fee formed, as well as what
range of profit margin exists for each one are generally given below. The cost breakdown
weighted average services are based on the following cost structure:
Weighted Average Cost Stucture
Cost of ISP; 19%
Cost of HUB
operations; 37% Cost of ISP
Cost of HUB operations
Transponder cost
Transponder cost;
44%
Figure 17 : Weighted Average Cost Structure Breakdown
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The key cost elements are:
Satellite Bandwidth: Cost of Bandwidth
DVB-RCS Hub: Basic HUB cost + RF cost
ISP Backhaul + Terrestrial connections: Cost of Backhaul
The initial costing approach takes into consideration the market analysis of the region as well
as other factors such as:
Profit of providing the service
The cost of the satellite capacity. The cost for hiring a 36 MHz satellite transponder
(space capacity) is around 1500000 Euro per year
The cost of internet bandwidth. The DVB-RCS hub, needs to be connected to the
internet backbone to be able to connect the customers, through the satellite, to the
internet. Connecting the DVB-RCS hub to the internet backbone i.e. the backhaul cost
is estimated to 26000 Euro per year per E1. This is the actual market price in Greece
The cost of the antenna, LNB and satellite modem, i.e. the price of a complete
Satellite Interactive Terminal (SIT) which is 1499 Euros
The cost to the customer of the Wi-Fi HUB that will be installed at customer premises
which is 1650 Euros
The average cost of installation per SIT throughout Greece which is 400 Euros
The cost of Billing and CRM per customer that can be from around 350 to 500 Euro
The Marketing Cost that will be in order to acquire one customer which is assumed to
be 200 Euros
Infrastructure cost
Personnel cost – Network management cost. Network management is based on a
man/year cost per 24/7
Training cost
Rent expenses
Operational cost
Hub Maintenance cost
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In the financial considerations the cost for connecting the DVB-RCS hub to the internet
backbone i.e. the backhaul cost is estimated to 26000 Euro per year per E1. This is the actual
market price in Greece. The hub maintenance cost refers to the maintenance of the DVB-RCS
Hub and the training cost that needs to be considered is the cost to train the personnel in
order to be able to operate the DVB-RCS hub and to be always updated with new additions
on the hub, from the Hub manufacturer. Rent expenses are referred to the renting of the
buildings etc. that the DVB-RCS hub is installed as well as the offices rent. The infrastructure
cost refers to the Hub cost, the cost of the RF chain for uplink and downlink of the hub signal
from and to the Hub, to the satellite.
6.2.3.2 Prices
The offerings in table below were defined from an initial market investigation based on
corporate client demand. However, this will be again further defined in the future based on
the customer demand and their needs.
This pricing is based on the market analysis of Greece. HELLAS SAT is currently working on
the pricing and regulatory issues involved in the different countries in the target area.
Inst. Monthly
Product Max. speed Equip. Fee Contract Traffic
Company Fee Fee
Name kbps € Period restr.
€ €
Hellas Sat
512 256 119 1 year/6months unlimited
net! 500
HELLAS Hellas Sat
1024 256 199 1 year/6months unlimited
SAT Two net! 1000 DVB-RCS
way terminal = 250-400
Satellite Hellas Sat 1.499
1024 512 299 1 year/6months unlimited
Internet net! 1000+
Hellas Sat
2048 512 549 1 year/6months unlimited
net! 2000
Table 22: HELLAS SAT Net! initial offerings
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Offering considerations:
The service offering is determined by a number of factors:
Throughput (Gigabytes)
Speed (Kilobits or Megabits per second)
Time (Minutes)
Contention Rates (various factors affecting this)
The geographic location
or a combination of the above.
Contention ratios are different according to the type of usage. From observing the traffic
activity of ISP‟s, the ratio of sending information to receiving information is normally 1:4. If
the connection is used mainly for large and constant downloads, then the ratio can be 1:8 or
greater. If the connection is also used for an e-mail server then the ratio can be 1:1 or 1:2
due to the large number of e-mails.
The symmetric services would normally be used for applications such as video conferencing
or FTP connectivity, VOIP.
There will be a unified price throughout Europe and M. East for the basic line of services.
Custom made solutions and dedicated networks will be priced accordingly.
Regarding the pricing position of the HELLAS SAT Net! services platform and taking into
consideration the addressable market, it can be concluded that the price should be
competitive to terrestrial Broadband offerings as well as other satellite offerings in the target
area. However, it can not be neglected that part of the targeted market corresponds to low
purchase capability customers.
Therefore, the initial positioning of the offerings is such that, HELLAS SAT Net! primarily
targets the Corporate and Government users though which residential customers will be
retained with time.
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6.2.3.3 Proposals for service price reduction
Hybrid Satellite-WiFi networks
In order to reduce the high cost of the terminal equipment as well as the monthly fee for the
service, hybrid satellite WiFi networks, using the 2.4 GHz band, can be deployed. This can
reduce the cost for having broadband access a lot and even reduce the cost for each
customer to levels even below the price that terrestrial providers offer.
Using the 2.4 GHz band has proven to be an effective and profitable means to offer high-
speed wireless Internet access to customers at fixed locations. The three main advantages
this band offers is that it is license free, it supports high data rates, and the equipment is
affordable. The primary disadvantage is that for long range, clear, unobstructed line-of-sight
must exist between the base antenna and the client antenna. This can be overcome by
designing the wireless network in a way that covers the target customers/users in the best
possible way.
The hybrid satellite WiFi solution can be deployed to serve small communities in remote
villages. The WiFi hub can be installed in a central point, either on the municipality building
or the school building or even on a users building, and the other users using a personal WiFi
antenna to be connected to the WiFi hub and then through the satellite interactive terminal
to the broadband internet. In the frame of RW project there are examples of such an
architecture, where the SIT and the WIFI hub have been installed on the municipality
building and the small community of the village is served in a shared manner from that point.
Another example of where the hybrid satellite WiFi architecture can be used is given in the
example below. The hybrid system is installed in a holiday camp and the business man that
owns the camp, offers to the residences broadband access on a constant fee. HELLAS SAT in
cooperation with a business man that owns a camping in the Peloponnese in Greece and with
another private company was deployed a WiFi network in the camping area to serve the
customers of the camping. The investment has been done by the business man, owner of the
camping. In more details, a DVB-RCS terminal has been installed on the central building of
the camping and is connected to Omni directional WiFi antenna and covers all the area of the
camping, as shown in the following photos. The advertisement of his camping and the
demand for broadband by the sea is very high and even bigger than the owner‟s
expectations. The sharing of the cost between the users makes the available service very
attractive. It is worth mentioning that the installation of the whole system took just 4 hours.
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Figure 18 : Example hybrid satellite-wireless installation at a camping
Subsidization
Subsidization of broadband internet access is a policy that needs to be followed by the
European counties in order to help bridging the digital divide. Subsidization can take two
forms. These are the Subsidization of the usage of the service, i.e. the customers or
subsidizing the infrastructure i.e. the service provider to develop the network and be able to
provide cheaper service to the customers. The subsidization of the infrastructure can include
the cables, the satellite, the hub. In countries where the telecom infrastructure is not
developed, countries like the Balkans and Eastern Europe, the best approach is to subsidize
infrastructures. The initial investment is very high and may keep back companies to invest.
The creation of public/private partnership to develop the infrastructure and in a later stage to
sell the service to ISP that will actually target the market. This will be beneficial as these
countries with limited telecom infrastructure will be able to develop such infrastructures and
help the roll out of broadband services. This will also help entities to enter the market and
previously had not the ability and financial power to invest in infrastructure. The creation of
competition between the various entities/service providers will help to further lower the price
of the service and drive the demand higher.
Developing of cheaper terminals
In a later stage the cost of the satellite terminals have to be considered. The developing of
cheaper terminals in the near future is a must.
This can be done by reducing as much as possible to power of the Block Up Converter, which
will drive the price down, and by reducing the cost of the satellite modem. The advances in
electronics and the mass production will help achieve that.
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6.2.4 Risk Analysis
6.2.4.1 SWOT analysis
The table below attempts to summarise the competitive position with specific regard to the
use of the Hellas Sat product and services.
Strengths Weaknesses
Satellite operator offering end-to-end Pricing (with respect to customers ability to
services in the region pay)
Ability to combine with VAS in an Capital availability in the addressable market
integrated service offering
Lack of an established VAS and distributor
Privileged access to main shareholder (OTE) network
and its client basis
Regulatory framework in some of the
Partner applications and know-how countries of the target area
Opportunities Threats
Weak terrestrial infrastructure in the target
area
Expansion of Greek businesses in the area
Cost of the equipment to the end user
needing telecom services
Cost of equipment over the long run (the
European Framework Programs and EU
cost is not projected to significantly drop
Accession States
over the short term)
Hellas Sat footprints (areas that Hellas Sat
Penetration of DSL infrastructure
covers have great potentials for growth ex.
Balkans, SE. Europe, and Middle East) Capacity and pricing competitiveness of DSL
Cooperation between Hellas Sat and DVB-
RCS service providers in W. Europe which
can result in providing a unified DVB-RCS
service to both Europe and M. East)
Table 23 : SWOT Analysis – Hellas Sat
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6.2.4.2 Critical Success Factors
It is also crucial during the development of a Business Plan to identify critical factors which
can lead to success (CSF). Hence HELLA SAT will focus on the Critical Success Factors of the
categories that play a significant role in the penetration of the most promising satcom
scenarios such as:
1. Network Costs: The amount of bandwidth (more bandwidth costs more) alongside the
chosen frequency band will have an effect on the overall cost: when the system
requires the use of C-band satellite communications, it is understood that the cost for
installation of Earth terminals will be higher. The choice of satellite position (and its
inherent coverage and power) will also influence the cost of the Earth station (eg, size
of antenna).
2. Operational Costs: Choosing the applications that you want to provide, the technology
to support them and a communications medium, always brings a number of related
costs that should not be underestimated. Computers in the classroom require for
example, maintenance, upgrades, security provisions, initial training, additional
peripherals etc.
3. Contribution: By contribution we mean the way by which the original content and/ or
value added service is brought to the place within reach of the end-user: the
transmission point. Course providers and content creators need a priority access to
the repository where the materials are kept and from where they are distributed. In
the case where the content is distributed via IP-based transport, the producers need
to have sufficient bandwidth to upload to the servers. In the case of a
videoconferencing type application, the originating site may need adaptations in order
to enhance the effectiveness of providing service. It is therefore necessary to take
into account the specific requirements of the service contributors because they may
affect the choice and architecture of the network.
4. Quality: Satellite communication can be tailored exactly to the needs of the users.
Bandwidth and coverage are the most important factors of interest. Different levels of
service can provide scalable levels of quality of service: fixed and privately allocated
amounts of bandwidth or flexible bandwidth allocation whether always-on or available
upon request. In addition control and management can be done effectively and
easily.
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5. Time: There are many time issues related to technology-supported applications. The
application may require synchronous (instant) feedback (by telephone), or
asynchronous feedback (by email), or no feedback at all. This influences the choice of
network application. The use of a satellite service that relies on a geostationary
satellite implies certain latency in the communications path, caused by the distance
between Earth stations and the satellite. This delay can be crucial in some
applications (such as remote process control), cumbersome (in telephone
conversations or videoconferencing) or unimportant (eg, in web browsing or in
emailing).
The roll out of terrestrial networks is highly dependent on costly infrastructure works
that build incrementally on existing structures. Satellite communications and
especially broadband services via satellite may overcome the long wait and may
deliver the user an almost instantly available solution to connect according to his/her
requirements.
6. Location: So far it has been demonstrated that satellite communication is ideal to
overcome distances. ICT-based applications gives the user the impression that time
and place are becoming irrelevant. However, careful consideration of the geographical
requirements of a network application can avoid high costs or inefficiency.
The design of a distance education network for example can involve the use of a
central location from where the teaching contents are distributed.
Whenever a networked application such as distance education or telemedicine is
planned, a geographical plan should be part of the total project, because of the close
relationship between costs of investment, network architecture, communications and
operation.
7. Availability: When the satellite system is properly designed at all sides, satellite is able
to guarantee an almost unparalleled availability.
8. Energy: Power and access to telecommunications are considered readily available
commodities in regions like Europe and North America. This is not the case in many
other regions such as Albania or Bulgaria. While satellite can bring access to
telecommunications surpassing territorial and geographical barriers, energy will still
be needed on the ground to receive process and apply the contents.
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9. Security: Satellite Communication systems are highly secure systems. The only part of
the transmission chain that is exposed and in some way vulnerable is the outdoor
antenna.
10. Hardware Installation and Maintenance: The use of advanced technologies has a
certain element of risk in it because of the lack of experienced support people in the
field. In many cases where satellite communications are used for the first time, more
initial support is required. Networks based on terrestrial communications on the other
hand, are built more incrementally and allow both service-provider and end-user
support services to become fully acquainted with all service and support issues.
The selection of a particular communications service (eg broadcast TV vs VSAT or
Internet via satellite) brings a different support requirement. It will probably require
the set-up of a new and quite extensive support structure (including remote
assistance, help-desk etc). Because this system is aimed at end-users, support
structures close to the end-users (local and regional sales and support services) are
required. Customers have learnt to expect and appreciate a certain level of support
from ICT providers, and they will not compromise for a new service such as Internet
via satellite. This may represent a considerable cost factor.
11. Support: An efficient service relies on quality support mechanisms.
12. Training: Depending on the selection of the technology and the applications, the
parties involved may require a certain amount of training. It should be clear that very
little training is required for the specific satellite part of the chain. Regardless of the
transmission path (terrestrial or satellite), most applications require some training or
at least some raising of awareness.
Using satellite communication technology may necessitate specific training for those
working at the side of the originating Earth station or the hub server where it may be
necessary to make the satellite service provider‟s staff aware of specific applications
issues. At the end-user side there may be a requirement for training in specific
hardware-related topics such as the set-up of the Earth station (antenna pointing or
software updates).
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13. Sustainability: When considering the total cost of a technology application, all too
often only the initial investment cost is taken into account. However, when setting up
an ongoing service solution, operational costs including support, network
communications costs, replacement scalability and upgrade costs are all important
factors. Satellite communications services are perceived as being expensive.
Satellite communications however, in general score very well with regard to
operational costs: telecommunications networks, for example, have a lifetime of more
than 5 years before the network requires extensive upgrades or changes. In remote /
rural areas where access technologies will not become available within the short to
medium term, satellite Internet may be a solution for at least 10 years. The problem
with this type of technology however, is that many operators and service suppliers
are relatively unfamiliar with supplying services to the end-user, and the sustainability
of this has to be proven.
14. Pricing: Costs in the ICT world have come down dramatically over the last 10 years.
Personal computers are costing less than 15 years ago and can come down much
further. Competition in the telecommunications sector has brought the price of a
telephone call down. The cost of Internet access has gone down significantly in the
decade that it has become widely available to the public. While this trend towards
lower costs will probably continue, end-users are recognizing more and more that
there is no such thing as a „free lunch‟. Although free Internet access was very
appealing to users, many providers have gone out of business. For professional or
mission-critical applications a price has to be paid for a certain level of quality and
service.
The same applies to satellite communications. While objectively speaking the costs
has come down, a threshold seems to have been reached. Prices in the satellite
communications industry have reached a level that can be compared to terrestrial
services such as ADSL or leased lines. Service suppliers in any of these technologies
will watch each other‟s price settings in order to stay competitive. When new
technologies or players enter the market, they will again set their prices according to
the service levels and quality guarantees they are able to deliver.
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15. Revenue: It is a crucial factor for all the involved actors (satellite operators, service
providers, broadcasters). It is crucial to estimate the revenue from these services and
of course to identify and implement methods of revenue generation and for this
reason the generic value chain model we propose will be fully utilised in order to
optimise the definition of roles and cash-flows between the stakeholders of the
services offered.
16. Regulatory Issues: While satellite communications offer immediate cost-effective
solutions, some countries‟ policies, rather than facilitating satellite communications,
hinder or prevent their deployment. In many countries regulation procedures are
outdated, expensive or cumbersome. In some countries, the national public telephone
operator is the only entity that may install and service, or even own, operate and
maintain communications network. In other countries a local commercial presence is
required by administrations as a precondition for licensing.
Licensing fees also remain too high in many countries. Furthermore, many countries
still apply unnecessary burdensome licence application processes resulting in
unnecessary delays issuing regulatory licences.
On the regional level, service providers are required to seek out a multiplicity of
application forms – as well as contact details for the officials responsible for
processing them – among the jurisdictions where they provide services. In general, it
has become apparent that the more regulations, fees and other requirements that are
imposed on providers of telecommunication applications and services, the fewer
communications options will be provided in the individual country.
In conclusion, all CSFs will be systematically taken into consideration. It is expected that their
relative contribution to the business and service proposition will vary according to the status
of the e-readiness for each target market.
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6.2.5 Conclusion
Based on all the above as well as the nature of the RW project, it can be said that this is a
fairly new market for HELLAS SAT. HELLAS SAT offers packages that mainly target business
customers and this is how they have been designed. The offered price may seem high for
residential users or for educational purposes for small schools. On the other hand the
advantages of having broadband access and the possibility to have access to the information
that the internet makes available are very high.
The users of the RW project will have the equipment at a reduced price at the end of the
project. Instead of paying 1499 Euros for the equipment they will pay 700 Euros. This
already makes more attractive the satellite broadband solution.
Regarding the monthly fee, this can be shared by installing WiFi networks and give the
opportunity to various users to share the capacity and cost. In RW project there are sites
that will have deployment of WiFi networks in combination with the satellite terminal. The
pilot sites runs will give a clearer view of the advantages and disadvantages of sharing the
cost and of course the bandwidth.
The test runs will also give a clearer view of how, when and how much each user uses the
service. This will help us as satellite operator and service provider to tailor a better solution
for these customers/users and offer them a package that better suits to their needs and this
will reduce the cost for the user.
Most sites that will be deployed in the frame of RW will be schools. The available capacity to
each school, which mostly will be used during the morning by the schools, can be used in the
afternoons by the local community or even by students in their houses. In this case as well
the installation of a WiFi network will help achieving that.
In general, it is expected that by reducing the cost of the satellite terminals and equipment
as well as the monthly fees, the satellite broadband market will rise. Service provision
tailored to the customer needs will help reduce the price as well.
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6.3 Eutelsat, SKYLOGIC and TTSA Broadband Business Modelling
6.3.1 EUTELSAT/SKYLOGIC vs. TTSA
The respective positioning of the three entities are illustrated in the value chain diagram
provided below.
Figure 19 : Eutelsat vs. TTSA positioning in the value chain
6.3.1.1 EUTELSAT
EUTELSAT's main role is to provide the "raw" satellite capacity. EUTELSAT's direct customers
need to have the knowledge of how to exploit transponders capacity and need to have the
financial means to be able to purchase full transponders' capacity. This can only be the case
of large customers or telecom operators.
Delivery of generic multimedia IP services requires specific equipment (HUB Earth stations)
and knowledge to be able to provide a first level of retail of raw satellite capacity. To address
this market segment and considering the specific features, EUTELSAT has subsidized this
activity to SKYLOGIC.
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6.3.1.2 SKYLOGIC
SKYLOGIC is Eutelsat's fully-owned subsidiary for satellite broadband services. Skylogic builds
on Eutelsat's expertise in satellite communication, corporate and professional data networks,
delivering a cost-effective portfolio of two-way satellite broadband communication services to
businesses and public administrations world-wide.
SKYLOGIC portfolio of services is provided through a wide network of sales channel partners
around the globe, selected by their ability to provide high-quality services and solutions
adapted to business users' requirements.
From the heart of Europe, SKYLOGIC operates a series of state-of-the-art IP platforms, which
offer IP connectivity from the Atlantic to the Pacific Ocean through several fully
interconnected satellite hubs. At the Network Operation Centre (NOC), experienced engineers
monitor customer networks round-the-clock. An International team of experienced satellite
industry professionals is available to support our customer's projects small and large.
SKYLOGIC main activities can be outlined as follows:
Purchase and maintain HUB facilities,
Organize connectivity from the HUB to the Internet backbone
System integration : provide housing facilities at HUB location, develop after sales
technical support facilities, implement network management systems
Operate such facilities
Business development :
IP generic service specifications and business planning
develop a network of service providers and appropriate contractual scheme
Develop of network of certified installers and train them
Provide 2nd level (to the Service Providers) technical support for satellite network
and terminals
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6.3.1.3 TELEMEDICINE TECHNOLOGIES (TTSA)
EUTELSAT/SKYLOGIC is not organized to perform the required R&D to customize services
and prices depending on specific requirements of one or more independent end-customers.
Within RW project, this role is devoted to TELEMEDICINE TECHNOLOGIES which is acting as
a Service Provider of SKYLOGIC.
TELEMEDICINE TECHNOLOGIES activities and roles can be outlined as follows:
Purchase, deploy and maintain applications hosting facilities at HUB and at
terminal side if required (hardware : servers, routers, switches, QoS devices…)
Develop partnership with application providers (videoconference or co-working
systems for instance) and integrate in the MEDSKY Platform, validate operation
over satellite network and develop appropriate procedures for standard operation
Software development, integration and maintenance: provide to the end user
interfaces for on-line booking of satellite capacity, per use billing, and access to
specific applications
Provide services for satellite terminals procurement, shipping, installation and
commissioning (using the installers' worldwide network set up by
EUTELSAT/SKYLOGIC)
Operate and administrate the application platform (by contrast with the satellite
HUB operated by SKYLOGIC)
Interface with SKYLOGIC as a provider of TTSA (heavy task)
Operate such facilities
Business development :
application services specifications (including per use policies) and corresponding
business planning, tariffs, development of contractual frame for end-customers
and billing
marketing, direct sales to end-users
Deliver 1st level trouble-shooting for satellite network and terminals
Provide 1st and 2nd level user support and develop hotline facilities for application
services
To date, the total amount of investments performed by TELEMEDICINE TECHNOLOGIES
amounts to 0,8 MEUR approx. from which 0,3 coming from subsidized R&D and 0,5 from
private funding, as evidenced in its accounts.
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As a Service Provider, TELEMEDICINE TECHNOLOGIES purchases from SKYLOGIC satellite
capacity in the frame of a standard Service Provider commercial contract. As a result,
SKYLOGIC/EUTELSAT provides its generic service (IP CONNECT) to a large number of "sites",
but sees one only customer, the Service Provider.
TELEMEDICINE has (1) to perform the required R&D investments to deliver the service
adapted to each user, (2) define and implement the resulting and required bandwidth
sharing and traffic management policies, including Quality of Service management, (3) define
and adapt the corresponding tariff policy and contractual conditions, and (4) elaborate the
appropriate business planning.
In the specific case of RW project, and as an exception justified by the fact that RW is a R&D
programme with a co-funding scheme, EUTELSAT has taken tasks which are, in "business as
usual" conditions, the responsibility of the Service Provider and of the Customers
respectively: organization of procurement and installation of satellite terminals and (co-)
funding of the satellite bandwidth resources.
TELEMEDICINE TECHNOLOGIES provides to RW its own validated application platform, from
which the IP CONNECT satellite connectivity is only one of the elements. Each end-customer
does not have to reinvent the wheel and develop its specific application platform on its own,
by assembling the required hardware and applications, designing appropriate satellite
network management systems and policies etc… Such an approach would just be not
reasonable, as reaching the critical mass of users/customers ensuring sustainability would
hardly be possible.
TELEMEDICINE TECHNOLOGIES has selected and integrated a number of devices and
developed appropriate software components (which is in its core competence) to manage
Quality of Service on demand and in a fully automated way, to perform accounting and
billing on a per use basis, to provide additional services such as IP based, multicast enabled,
videoconference or broadcast services in a standardized way, at the most possible affordable
price.
TELEMEDICINE TECHNOLOGIES is also developing dedicated monitoring tools to reduce
helpdesk activity, and on-line software to enable end-users directly book and launch
multipoint videoconferences and / or broadcast sessions with appropriate guaranteed
bandwidth requirements.
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6.3.2 SKYLOGIC Service Offer
6.3.2.1 The Skylogic Service Approach
The SKYLOGIC service portfolio is designed to cover a wide arrange of applications form
highly secured services for Video contribution from live events to simple low cost consumer
Internet access services. The service requirements and technical realization requires the
utilization of different technologies: Skylogic uses I Direct for high level services, Linkstar
DVB RCS type for medium range networks and Surfbeam in the future for low level consumer
networks.
Overview
> The Eutelsat/Skylogic portfolio of fixed interactive network services
> High End > Middle Range > Low end
> Technology: I Direct > Technology: Linkstar DVB RCS > Technology: Surf Beam
> Star / SCPC / Mesh > Star > Star
> Return up to 8 Mbps > Return 1.2 to 2.4 Mbps > Return up to 2.4 Mbps
> Forward up to 18 Mbps > Forward up to 44 Mbps > Forward up to 72 Mbps
> Only IP Connect > 70% IP Connect > Only IP Access
> High performance IP NW, > Corporate NW, IP access > IP access NW
Video contribution, VNO NW, Tele-learning, > VAS possible e.g. VoIP
option Terminal to Terminal > Remote NOC
connection (Double hop)
> Currently on W3A and W6 > Currently more than 10 > Currently in Beta Test
networks on a single NOC > Future service on HB6
> Ka Band
Page 9
Paris, July 07
Table 24 : Eutelsat/Skylogic portfolio of fixed interactive network services
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6.3.2.2 The IP Access and IP Connect Services
The IP Access service
The IP Access Service provides shared bandwidth for Internet access and Web navigation via
a two-way satellite terminal. Each terminal operates in a star configuration in which the
terminals can belong to different distributors and clients 10.The ratio between Inbound and
Outbound bandwidth is pre-determined by Skylogic depending on estimates of the traffic
generated in both directions by the applications commonly used per service category.
There are two service categories differentiated by the allocated bandwidth and the profile of
user traffic foreseen: IP Access Coliseum and IP Access Premium. To maintain service
quality, Skylogic reserves the right to suppress at any time (and for all services) any
protocols that are for non-professional use, notably Peer-to-Peer protocols such as Kazaa,
WinMX, etc., and any other protocol liable to have the same effect on service quality.
The characteristics of each of these services are shown in the following table.
General remark: Activity rate and traffic refer to the D-STAR terminal and hence to the group
of connected work-stations as a whole. They do not refer to each individual station.
IP Access IP Access IP Access
Discovery Coliseum Premium
Authorised protocols http, ftp, email All All
Possibility to assign public IP addresses No Yes Yes
Downstream bit-rate (peak) 512 kbps 1024 kbps 2048 kbps
Downstream bit-rate (minimum assigned)11 10 kbps 20 kbps 40 kbps
Upstream bit-rate (peak)12 128 kbps 512 kbps 1024 kbps
Upstream bit-rate (minimum assigned)11 5 kbps 10 kbps 20 kbps
Table 25 : IP Access Characteristics
10
The same terminal cannot offer IP Access and IP Connect services simultaneously.
11
Average bit-rate value measured over one minute.
12
Available if the carriers employed so allow
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Note that the bit-rate corresponds to the net bit-rate available and not to the speed at which
the content is transferred. The latter depends on the protocols used – some of which do not
allow full use of the available bandwidth – and sometimes also on the equipment employed.
To ensure an adequate quality for each service category, the traffic sent and received by
each terminal is measured over a significant period of time. In a case where the traffic of a
terminal is in excess of the statistics used to define the service, Skylogic reserves the right to
place a temporary limit on the bit-rate of the terminal concerned by applying traffic shaping
techniques.
Bandwidth is shared between terminals on an equal basis to ensure parity between all active
terminals in each service category. An idle terminal can access the bandwidth at any time.
Terminal-to-terminal communication is not authorised in the D-Star system for this type of
service (IP Access). The service includes Internet connectivity from the Hub, connectivity
being enabled by Skylogic via a telecom operator.
In the IP Access service, a group of private IP addresses is assigned to each terminal in
accordance with the service category [see table on previous page]. For services without
limitation on protocols, a group of public IP addresses can be assigned as an alternative to
the private addresses according to the table of tariffs (Article IV). The addresses allow the
connection to be configured between the satellite terminal and:
Either one user equipment (e.g. a PC)
Or several pieces of equipment connected via a local network (LAN), and without
the need for a router if a sufficient number of addresses is available (the terminal
performs the bridging functions)
Or a router (or proxy) serving several pieces of equipment connected to one or
more LANs. This is the recommended configuration for complex networks.
It is not possible to move a terminal from one service category to another, or from an Access
service to a Connect service and vice-versa, without reconfiguring the IP subnet assigned to
the terminal when it is activated. Any change of category or typology of the service
consequently involves a change in the IP address of the equipment (of items of equipment)
connected to the terminal.
The bandwidth is available to a terminal 24/24 hours and 7/7 days.
The IP Connect Service
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The IP Connect service is designed to establish, integrate or interconnect networks of
different sizes and different characteristics.
This service consists in providing fixed and dedicated capacity for IP connectivity and, where
required, Internet access via a network of two-way satellite terminals (Return Channel
Satellite Terminal or RCST) operating in star formation.
Bandwidth is made available independently in the Hub RCST direction (Outbound,
Downstream or Forward Channel) or in the RCST Hub direction (Inbound, Upstream or
Return Channel) or in both directions at once. Bandwidth can be allocated to one terminal or
shared by a group of specified terminals (CUG: Closed User Group).
A bidirectional call between two terminals in the CUG implies the use of bandwidth between
Terminal 1 and the Hub and between the Hub and Terminal 2, and vice-versa, and
consequently the use of twice the amount of satellite capacity.
It is possible to assign a specified and dedicated amount of bandwidth (CIR, Committed
Information Rate) to each terminal within a CUG: the aggregate of CIRs assigned to the
terminals in the same CUG may not exceed the total bandwidth assigned to the CUG.
Within the total bandwidth assigned to the CUG, bandwidth not assigned to the terminals
under a CIR arrangement is assigned to the active terminals of the CUG on an on-demand
basis in the Return Channel and on a best-efforts basis (where it is shared equally) in the
Forward Channel. By using this method of bandwidth assignment, it is therefore possible for
terminals benefiting from dedicated bandwidth allocation to access additional shared
bandwidth at the same time.
The above description is only applicable if the terminals are working with the same carrier of
the same transponder.
The bandwidth is available to a CUG 24/24 hours and 7/7 days.
A higher number of private IP addresses may be allocated (see table of tariffs in Article IV).
Alternatively, a group of public IP addresses may be allocated (see table of tariffs in Article
IV).
IP Connect service: upon demand and as a payable option, Internet connectivity from the
Hub can be associated with IP Connect Service, and is provided by Skylogic via a line
obtained from a telecom operator.
A precise description of the service configuration must be set out in a document to be
submitted to Skylogic for approval. This document must state inter alia: the number of
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terminals in each CUG, the allocation of resources to each terminal in a CUG, an indication of
any protocols authorised or blocked for the CUG, and details of any priorities for the
protocols and/or the ports and/or the IP addresses in the traffic of each terminal.
6.3.3 Costs and Prices Structure
6.3.3.1 Costs
The majority of the user requirements concerns IP Access services which are comparable to
Skylogic already commercially offered service IP Access Discovery and IP Access Coliseum.
For the currently offered services Skylogic will not provide the QoS and monitoring facilities
as required for this project nor the possibility to pre book exclusive capacity for
Videoconferencing or terminal to terminal communication. For this reason the Eutelsat
/Skylogic solution foresees an IP Connect and TTSA to provide the shared bandwidth and all
other required facilities. In this document the cost analysis will foresee as if Skylogic would
provide the IP Access services.
Costs for the User Satellite Terminals and their installation are not considered in the business
plan. One standard terminal consisting of a about 1 m satellite antenna, 2W BUC and satellite
modem has a hardware price of about 1300 € excl. VAT plus transport. Cost for a standard
installation are ranging from about 300 € up to 1200 € strongly depending on the situation
on site and the salaries for these services usually paid in the particular country.
Equipment supplier Cost
All D Star services are now operated from the new Skypark located in Via Centallo 72, 10156
Turin Italy.
Skylogic invested about 30 Mio € in infrastructure and technical facilities that include today
14 hubs for digital IT broadband services like D Star and three digital DVB platforms for
video turn around and distribution.
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Satellite Capacity Cost
One transponder of Eutelsat capacity on satellites like AB1 has a price of about 2 Mio € per
year. The transponder for the forward link has a bandwidth of 36 MHz for a standard DVB
carrier of 27,500 MSymbols/s with a transported data rate of about 44 Mbps.
The return TDMA (Time Division Multiple Access) carrier for the D Star service used for the
project has 1250 kSymbols/s and a data rate of 1024 kbps. Each TDMA carrier of 1250
kSymbols/s can handle up to 250 terminals generating simultaneous traffic.
6.3.3.2 Prices
For business evaluation purposes for the project the following prices may be assumed:
IP Access Discovery : 180 € per month per terminal
IP Access Coliseum: 288 € per month per terminal
IP Access premium: 552 € per month per terminal
The prices for IP Connect bandwidth for the evaluation purposes of this project can be
calculated to 8800 € per Mbit/s per month
The business share of utilisation of the bandwidth is as follows: 70% IP Connect, 30 % IP
Access
For this project, TTSA has booked IP Connect service and adds its specific services on top of
the provision of bandwidth.
6.3.4 A Generic Business model for D Star
The current D Star service comprised space capacity on 10 transponders on different
satellite. Consequently, the business plan as required for only one hub is a generic model
type plan with Revenues, CAPEX and OPEX assumed for the operation of only one hub.
6.3.4.1 Revenue Estimation
The Eutelsat/Skylogic revenue stream results exclusively for the service subscriptions (no
margins on terminals hardware sales or other sources of revenues)
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The model uses the „IP Access “Coliseum“ as the only package generating revenues.
Recommended sales price 288€, Skylogic estimated revenues per subscription per month 240
€. In reality, the whole range of services is commercialised.
A full DVB carrier with 27,500 MSymbols per second can carry up to 44 MBit/s as usable data
rate. The IP Access Coliseum Forward link has a maximum data throughput of 1024 kbps and
a contention rate of 1/50. For the business calculations and considering the limitations on
the forward link a maximum number of 2000 terminals can be put into the bandwidth of one
transponder.
6.3.4.2 CAPEX Investment
Infrastructure
The general Teleport infrastructure is assumed to be existing: ground, Electricity, water, fibre
optical cables, office space and general security and access control
The total investment in Teleport infrastructure is about 1,4 M€, including:.
Monitoring and surveillance system (0.2 M€)
Data Centre, Base band equipment and Backbone Connection (1,2 M€)
Satellite related facilities for the first transponder
CAPEX Costs
Satellite Antenna 6.3M Ku band 0.1 Mi€
RF chain redundant 0.2 Mi€
Control Equipment 0.15 M€
Network Equipment 0.25 Mi€
GCU’s (TDAM return carrier receiver and
0.6 Mi€
processor)
Total: 1.2 Mi€
Table 26 : Satellite related facilities capital expenditure
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Satellite related facilities for an additional transponder on the same satellite
CAPEX Costs
Network and control equipment upgrade 0.2 Mi€
Forward Link RF chain 0.15 Mi€
Return link GCU’s 0.6 Mi€
Total 0.95 M€
Table 27 : Satellite related facilities capital expenditure for additional transponder
6.3.4.3 OPEX Investment
OPEX Costs
Staff Cost: 1 sales, 2 engineering, 1 admin 320 k€/Year
Consulting contracts and engineering support 80 k€/Year
Maintenance and Upgrade contracts for Linkstar 15% of CAPEX
Sales support (admin, billing, hotline) 50 k€/year
Marketing (trade fairs, printed material,
50 k€/year
documentation)
International IP backbone connectivity 60 €/Mbit/s per month
Satellite capacity Forward and Return link 2200 k€/Year
Table 28 : Satellite related facilities operational expenditure
6.3.4.4 Detailed Business Plan
Based on the financial hypothesis provided in the previous sections a detailed business model
for RW service is attaché in the following spreadsheet.
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Table 29 : Detailed business plan for RW service
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6.3.5 TELEMEDICINE TECHNOLOGIES Risk Assessment
To be able to sustain the business, TELEMEDICINE TECHNOLOGIES consider that, at a
minimum, the following costs shall be covered by the revenues generated for the company:
Amounts in kEUR
2 x software engineers 40 1,5 60
1 x sales man 65 1,5 97,5
1 x assistant / logistics 30 1,5 45
1 x NW Engineer 40 1,5 60
Marketing 40 1 40
HW maintenance 15 1 15
Subcontracting 50 1 50
Overheads 50 1 50
Total 417,5
Table 30 : Basic business costs
At this stage, the following risks threatening sustainability for this business are identified:
• During ramp up phase, the costs of bandwidth shall be covered by the satellite operator,
not by the service provider
• Available products, for instance for videoconference or broadcast services do not fully
comply with requirements to enable efficient integration and the corresponding
subcontracting costs are not properly funded
• Required commercial effort larger than expected to achieve targets as stated in the
business plan, or geographical coverage requires purchasing bandwidth from too many
satellite beams
• Contractual conditions with EUTELSAT/SKYLOGIC not enough protective for the Service
Provider.
• Required user support larger than expected
• Key providers fundamental change of policy (videoconference, satellite capacity etc…)
• Tariffs too high for market acceptance and/or cost of satellite bandwidth too high
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6.3.6 Conclusion
6.3.6.1 Eutelsat
The Eutelsat subsidiary Skylogic currently operates networks for D Star services on 12
transponders on 6 different satellites. On 30 June Skylogic had 6642 satellite terminals enabled
to the Skylogic network for D Star services. Skylogic operates these networks on a pure
commercial basis.
For the Rural Wings project, this has the following consequences:
All service offers are a part of a large-scale commercial roll out. As Skylogic sells D
Star services only through distributors, we have chosen TTSA as a distributor for the
users in the Rural Wings Project. In this way, there is no difference between the
services provided in the Rural Wings project and the commercial services.
This ensures a seamless transition to a full commercial service with TTSA after the
Rural Wings project and this is the best guarantee of sustainability of the service.
This is also to confirm that the D Star service is in no way dependent on the Rural
Wings Project, the service continuation is independent of the results of the project.
It is very difficult to imagine any network application that is not carried out by D Star services.
Below there is a list of some applications carried out by D Star services:
Broadband connectivity to hotels in Europe
Broadband connectivity to more than hundred schools in Ireland,
Broadband connectivity to Internet cafés in Africa,
Supervision of wind power generators at remote places,
Voice and data communication to off shore oil platforms,
Broadband communication to maritime vessels and ferries,
Communications with scientists for glacier research at the Mont Blanc,
Communication facilities for NGO‟s in Africa,
Communication facilities for military units in Iraq and Afghanistan.
Currently the satellite terminals enabled at Skylogic networks are located roughly as follows:
About 2000 terminals in Europe
About 2000 Terminals in sub Saharan Africa
About 2000 terminals in North Africa and Middle East
The remaining terminals are for maritime services, in South America and over the Indian spot of
Sesat 2.
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From the experience together of Eutelsat with the experience of the Distributors
such as TTSA it is obvious that with the D Star service all possible applications
requested within the Rural Wings project will be feasible to carry out.
6.3.6.2 TELEMEDICINE TECHNOLOGIES
RURAL WINGS is challenging in many respects. User needs evidence several kinds of services
presenting very different requirements: internet access and videoconference for instance. One
question is whether it is possible, in a satisfactory way for the end-customers, to make such
service co-exist on a common (and shared) satellite channel? If yes, can this result in more
advantageous prices and quality of service? What will be for instance, the requirements in terms
of satellite bandwidth to achieve an acceptable quality of service, providing the value for the
money?
Appropriate sizing of the required satellite bandwidth is a key component of the final price to the
end-customer and one direction of research is indeed to well tune such sizing. Will such balance
be disrupted if an additional service such as IP telephony is added to the service bundle? Is end-
to-end quality of service absolutely needed and if so, how this can be achieved? Is it possible to
provide intermittent internet access (as this demanded by schools for instance where access is
not required during holidays), and can this result in cost savings for the end-customer? Can the
per use model for videoconference with quality of service achieve competitive prices and a user
friendliness corresponding to the skills of the users? will the variety of service profiles result in
an unmanageable system with exploding user support costs and activity? etc…
By trying to adapt to too many usage profiles in a very specific way, it has already been learned
that there is a risk to make the provided application services not understandable for the end-
user and difficult to market, but also too costly to manage. For sustainability and business
planning issues, there is an absolute necessity to standardize the offer as much as possible. This
is in the interest of the end-customer as this enables to reduce prices and reach customer
acceptance.
The later comments evidence that there are two competing trends: customize to the maximum
extend is technically possible but at higher commercial costs for the end-customer, while
standardizing the offer results in lower tariffs but less flexible service. The whole task of
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TELEMEDICINE TECHNOLOGIES in RW is to search for the best trade-off. The following strategy
is proposed. From the analysis of the user requirements as these appear from the initial project
phase, a set of standard services as described in this section are proposed with corresponding
tariffs. This enables to announce a clear offer to the end-customer. Out of the pilot phases,
lessons will be learned and further adaptations will be realized depending on the returned
feedbacks. This may also result in new tariffs. Thus an iterative process takes place, which
purpose is to converge towards the best possible trade-off and hopefully in a sustainable
business.
The cooperation of TELEMEDICINE TECHNOLOGIES and SKYLOGIC/EUTELSAT is already
resulting in a set of services which are, at this stage, unique on the market and answer the
largest part of user requirements while maintaining a serious price policy in view of
sustainability.
Provided that all aforementioned issues are solved, sustainability (for a service provider) and
lower tariffs (or per use) will result from the capacity to concentrate different types of traffic and
services in a common satellite bandwidth pool with proper and automated, as much as possible,
regulation rules.
A critical mass of users has to be achieved in such a frame and the corresponding usage profiles
have to be assessed (hopefully during the pilot phases of RURAL WINGS) to evidence whether or
not bandwidth savings can be achieved (as concentrating different traffic types may also result
in bandwidth overheads to maintain the same quality on each type of service) and to what
extend this can be reflected in the tariffs.
Pilot phases shall also evidence whether implemented quality of service policies need to be
further adapted, to what extend traffic control needs to be implemented and whether the range
of services is indeed providing an acceptable answer to the expectations of users when placed in
real life conditions.
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7. “Pre-commercial” and Trials
7.1 TWISTER
7.1.1 The TWISTER project
TWISTER (Terrestrial Wireless Infrastructure integrated with Satellite Telecommunications for E-
Rural) has been led by EADS ASTRIUM and has been co-funded by the European Commission in
the 1st call for proposals of the Aeronautics and Space priority of the Sixth Framework
Programme (FP6).
TWISTER has been one of the first Integrated Projects to be funded under FP6 and has
positioned EADS ASTRIUM and its partners as active players in bridging the Digital Divide in
Europe. The project has mobilised some of Europe‟s leading expertise in the area with an overall
budget of M€ 8.5, of which M€ 5 has been funded by the European Commission.
The project has started on 1 February 2004 and has operated over a period of 3 years hybrid
satellite-wireless networks throughout Europe (Spain, France, Poland, Greece, Malta, Italy,
Ireland, Croatia, and Denmark). The deployed broadband internet access networks have
supported innovative applications meeting the specific needs of rural user communities in the
domains of agriculture, education, community services, health care and e-business.
TWISTER has provided innovative applications meeting the specific needs of rural user
communities in the domains of Agriculture, Education, Community Services, Health Care and E-
business. Thanks to the capacity of space-based infrastructures to offer simultaneous services to
the whole European Region, the enlargement of the European Union can draw direct benefits
from the applications and capabilities that have been demonstrated.
Agriculture
TWISTER has allowed to address the communication needs of the agricultural user
communities on remote administration, professional distance learning, products and
practises traceability. In addition, remote surveillance and control applications for animal or
equipment monitoring have been implemented.
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Education
TWISTER has explored the use and interest of high quality videoconferencing tools to
provide interactive tele-education courses. It has set-up a communications infrastructure
and applications allowing students to interact and collaborate through the use of a camera
and a PC.
Community Services
TWISTER has addressed the broadband needs of small and medium sized rural villages.
Targeted users have been town halls and local administration libraries, cultural centres,
schools and colleges, SMEs, local doctor‟s practise or medical centre. Services validated
through TWISTER include on-line administration services, social, sports and cultural
community life and Public Internet Access Points.
Health Care
TWISTER has introduced reliable end-to-end e-Health services that provide high quality of
service, richer functionality and improved interaction, customised for specific user profiles.
Specifically, echocardiography for cardiac patients, a diagnostic procedure of proven value
will be validated in remote areas in the context of tele-visits.
E-business
TWISTER has offered two-way high speed Internet connections to meet the expected
services and applications for Small and Medium Enterprises: browsing the Internet to
explore new markets and investigate new suppliers; e-commerce for local artisans; creation
of rural e-businesses and enabling local businesses to advertise on the Internet; point-of-
sale applications in remote tourist outposts.
7.1.2 Major Project Achievements
The TWISTER project has deployed and operated over a period of 3 years 105 satellite access
points of which 69 have been combined with local loops. After the TWISTER project 41 satellite
access points remain operational, representing about 40% of all deployments.
Following figure shows that 9 countries have hosted the TWISTER validation sites. Most of the
satellite access points have been deployed in France, with a total of 39. Most of the local loops
have been deployed in Italy, with a total of 23 WiFi extensions deployed behind the satellite
access point.
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LOCAL END
COUNTRY SAP
LOOPS USERS
France 39 15 249
Italy 23 23 161
Spain 18 18 346
Greece 12 2 81
4 Poland 4 4 25
Ireland 4 4 40
4 Malta 3 1 25
Bosnia 1 1 10
39
Croatia 1 1 1
23 1
1 Total 105 69 938
18
12
3
Figure 20 : Geographical distribution of TWISTER validation sites
The different solutions put in place after the TWISTER project are described in the pie chart
below. Forty-one (41) satellite access points will continue operations after the TWISTER project,
presenting 39% of all satellite access points deployed.
After TWISTER broadband access solutions
NONE
17%
OTHER SATELLITE
2% 39%
WIRELESS
14%
ADSL
28%
Figure 21 : Broadband access solutions after the TWISTER project
The sustainability of the services has been ensured through the creation of partnerships between
on the one hand regional authorities and user representatives and on the other hand services
and technology providers.
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Public Body of Zaragoza Provincia (DPZ) has launched a public invitation to tender for the
commercial satellite services phase. Three companies were invited: Eutelsat (Skylogic), Astra &
Hispasat. The contract has been awarded to Skylogic renewable on a three monthly basis. Until
all towns of the province have ADSL, DPZ will pay all expenses (of all the users and the town
hall) that cause the different installations from the network. The commercial satellite service has
been activated in 12 out of 13 TWISTER villages, since Pozuelo de Aragon has now ADSL. DPZ
has also launched a public invitation to tender for the maintenance of the wireless networks.
This public call is still open.
EADS ASTRIUM has worked closely together with public and private organizations to ensure
continuity of broadband internet access after the TWISTER project in the Pyrénées region in
France. CIDAP is a public organization funded by three Regions (Aquitaine, Midi-Pyrénées and
Languedoc-Roussillon) and six “Départements” that are close to the border of the Pyrénées.
CIDAP„s objectives include the leadership of operational programme aiming at completing the
coverage of un-served mountain areas, with mobile phone network and broadband access to
internet. Eight (8) villages of the Communauté de Communes de Mouthoumet as well as the
villages of Lesponne and Tibiran have signed a service contract with Com-IP renewable on a
three months basis.
FORTH-ICS will continue to work with TTSA Service Provider, a certified provider of Eutelsat in
the frame of the project Healthware ensure as such the sustainability of 10 satellite access
points for health care in Greece until the end of 2008. The WiFi network connecting the
community offices with the Primary care centre in Charakas is strongly supported by the
management of the primary care centre and the local government. An association called “Friends
of the Primary Care Centre” has been formed supporting the maintenance of the network. In
Santorini, the wireless network has been granted to the Primary care centre which will be
responsible for its further maintenance and operation. Increased visibility of TWISTER, training
activities and support offered by FORTH have contributed to the creation of a critical mass of
users that are expected to drive sustainability through their demand of the service to local,
regional and national authorities.
Two commercial partners (Nostracom in Spain and Ibax in Italy) have both signed distribution
agreements with Skylogic and 3 and 4 sites respectively have been transferred to an IP ACCESS
service.
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7.1.3 TWISTER Key Findings
Based on the three-year experience gained by TWISTER partners major key finding and
recommendations issue by the project are:
RECOMMENDATION 1: Improve network performance and reduce costs through
increased mutualisation factor of the hybrid satellite-wireless infrastructure.
The objective of the hybrid satellite-wireless solutions is to share a single satellite access point
between several end-users through a wireless outdoor loop. In the TWISTER project we have
achieved typical wireless coverage areas of up to 1 kms using professional base stations in
combination with mass-market WiFi CPE equipment, with outdoor patch antennas. A larger
coverage area has been obtained in particular cases using higher quality CPE equipment, higher
gain antennas and/or wireless relay stations, however this increases of course costs.
On some TWISTER validation sites the satellite access point has been dedicated to a single
(professional/institutional) user while at the other side of the spectrum we have had up to 50
subscribers on a site. On average there have been 8 subscribers per satellite access point. The
analysis of the network usage and performance statistics seem to indicate that up to 20
subscribers can share a 2 Mbps/512 kbps satellite access point without unduly degrading the
performance.
The higher the mutualisation level of the satellite link, the better the resources are used or said
differently, 40 users sharing 4 Mbps will have a better level of performance than 20 users
sharing a 2 Mbps link. The mutualisation factor of the satellite link can be increased by a larger
wireless coverage area in combination with higher bandwidth satellite services offers.
The WiFi technology deployed in TWISTER requires LOS and as indicated above is limited in
coverage area because of the 100 mW regulatory constraint in the 2.4 GHz band. Use of
alternative technologies (WIMAX/HIPERLAN) and/or alternative frequency bands (5.4 GHz/3.5
GHz) could allow to increase the wireless coverage area. In parallel with the increase in the
potential number of clients within the wireless coverage reach, it is then also necessary to
commercialise higher bandwidth satellite offers to match the increasing demand (or to use a split
multilink solution).
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RECOMMENDATION 2: Develop and commercialise a residential user satellite
services offer
Currently the commercial satellite services offerings on the market do not target individual end
users: the typical costs for installation (1 000 €), equipment (1 800 €) and subscription (starting
from 280 €) per month for 512 kbps/256 kbps) for direct to the home satellite broadband
services are considered too high for residential users.
In order to target the home user, the first priority is to get the costs down. Assuming that the
equipment remains the property of the service provider and can be re-used for different users
until it is completely depreciated, the key issue is then to reduce the installation costs. To avoid
having to send a professional installer, it is necessary to study and validate auto-installation
procedures.
By sharing a satellite access point between 10-20 users through a wireless local loop, what is
effectively done is increasing the contention ratio on the satellite link by the same factor of 10 to
20. Hence, to target directly the residential user with a satellite only, new services offers should
be defined and validated with increased contention ratios on the satellite link. An important
factor to study would be the behaviour of the reactivity of the BoD i.e. 10 individual users each
with their terminal versus 1 terminal with 10 users.
In order to ensure user take up of such a residential satellite service offer, important marketing
and commercialisation efforts are required, for which a partnership with a terrestrial network
operator is crucial.
RECOMMENDATION 3: Promote investments in hybrid satellite-wireless solutions as
a direct contribution to the development of competitive broadband solutions and
user uptake.
As indicated by the Report “Broadband coverage in Europe. Final Report 2007 Survey” produced
by IDATE for the European Commission, DSL coverage is widely available with on average 89%
of the EU-25 population covered at the end of 2006. Despite the growth in broadband availability
there is still, according to this report, a clear gap between rural and national coverage: the
average DSL coverage in rural areas stands at only 71%. One should also note that DSL
coverage refers to the percentage of the population that has access to a local telecoms
exchange equipped with a DSLAM. This will include households and enterprises that are not able
to actually access a DSL connection due to their remoteness from the exchange.
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In parallel, we can see that WiMAX is being strongly promoted as an alternative solution to cover
rural areas. A number of local and regional authorities have built their broadband roadmap
around this new and emerging technology.
Deployment plans and network performance upgrades as promised by terrestrial operators
(wireline or wireless) make users and public authorities postpone decisions to deploy themselves
alternative broadband solutions. Hybrid satellite-wireless solutions could provide a solution
immediately to make the transition until terrestrial broadband arrives. The duration of this
transition period depends on the attractiveness of the site (in terms of economic development)
and its geographic situation.
Satellite service providers should put in the market a more flexible services offer, for instance in
terms of subscription duration i.e. x months minimum extendable per y months. In most cases
the transition period will take longer than initially estimated but the client will not feel forced to
make a long term commitment from the start and he has the freedom to move to terrestrial
solutions when they (finally) arrive. In addition the migration from satellite backhauling to
terrestrial backhauling should be anticipated allowing to maintain the same (wireless) local loop
and to reuse the satellite access equipment in another area.
RECOMMENDATION 4: Raise awareness of local and regional authorities on the
advantages of hybrid satellite-wireless solutions.
Local and regional public entities are the best actors for bridging the broadband gap in their
territories with as their main objective to foster economic development. As highlighted by the
conference Bridging the Broadband Gap on 14-15 May 2007 in Brussels, a number of regions
have already launched important initiatives both on the infrastructure and user support and
take-up side. The success of such projects has been demonstrated in TWISTER by the region of
Zaragoza (DPZ) where more than 100 satellite terminals have been deployed through the
regional ZIP project.
Local and regional authorities are the driving force behind broadband infrastructure roll-out and
take-up. Consequently, it is important to raise their awareness on the advantages of hybrid
satellite-wireless solutions. Thanks to their relative independence on distance and population
density, satellite solutions allow to overcome rapidly geographical obstacles to broadband
deployment. We can demonstrate the benefits of satellite solutions allowing to initiate rapidly the
usages in support of a long term infrastructure deployment roadmap.
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The adoption of satellite solutions will make the rural areas immediately more attractive to
business and individuals alike, as such accelerating the deployment of other alternative
technologies.
Actors should showcase the success stories in different regions of Europe illustrating the role of
satellite in the mix of technologies that can be used for underserved areas. It is necessary to
identify and promote the exchange of best practises, on a technical and programmatic level to
foster rapid roll-out, while taking care to respect state aid rules.
RECOMMENDATION 5: Provide a scaled down but complete broadband internet
access solution to remote and rural areas.
Users in rural areas have the same expectancy levels of broadband service as in urban areas.
Going even a step further, since in a majority of cases these users have been waiting for
broadband since a long time, their demands are sometimes even greater, at least in the initial
stages of usage.
For isolated and remote areas there is furthermore a particular need for advanced broadband
services for ehealth applications for example.
Although satellite resources are a scarce commodity, P2P traffic should not be blocked but
through QoS control allowed in a managed environment. Client satisfaction is mainly linked to
his web browsing experience which can be improved through web caching/prefetching or TCP
acceleration techniques while not necessarily increasing the overall bandwidth. For professional
users, VPN functionalities should be available as a baseline feature that can be activated rapidly
by the user itself.
RECOMMENDATION 6: Define a combined satellite TV & internet access offer
Satellite TV broadcasting is a mature and established market. Combining satellite TV with
internet broadband using the same set-top box could allow for economies of scale in the
equipment cost and could create an attractive services offer for the residential user. As such,
this combined services offer could be potentially not only a transitory solution (until better
arrives…) but could be considered as a sustainable services package.
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RECOMMENDATION 7: Improve the stability and reliability of the satellite equipment
TWISTER project has shown that hybrid satellite-wireless network operations have reached
maturity with less than 1 problem ticket per quarter and per validation site on average. However
some critical points should be improved such as the reliability and stability of some equipment
components such as hard disk and power supply.
RECOMMENDATION 8: Systematic use of QoS and supervision tools
QoS has been implemented at local loop level and at hub level, requiring traffic classification
according to applications or users or groups of users. For each QoS class the following
parameters have been controlled: guaranteed and maximum bandwidth, service priority and
number of connections.
The correct tailoring of QoS mechanisms allows to control the use of P2P applications and to put
in place prioritisation of access between different classes of users (enabling differentiated billing
schemes). Furthermore, QoS provides implicit access control: users not belonging to identified
groups are not allocated any resources
Network supervision should be used systematically with sufficient scalability to have a rapid
overview of the overall network status and on the other hand sufficient granularity to isolate
problems for remote or on-site resolution. The network supervision system should be linked with
a data base and easy to use interface for reporting at different levels of synthesis.
RECOMMENDATION 9: Promote the widespread dissemination of technical
knowledge of satellite technologies and services
TWISTER project has demonstrated that satellite resources need to be carefully managed in
order to make a profitable business case and to keep the customers satisfied. In many cases the
satellite solution is used simply to extend and complete the core business offer of a system
integrator/services provide and as such satellite is not always his main area of expertise.
Furthermore, in most cases the satellite service provider are SMEs and/or recently founded
companies and as such they have only limited resources to invest in testing and validation.
Each satellite service offer has its specificities in terms of maximum/guaranteed data rates, web
page prefetching techniques, TCP acceleration, number of allowed simultaneous connections, IP
addressing and routing, etc.
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It is believed that the creation of an observatory for the benchmarking of satellite services offers
would allow to measure and quantify the main performance characteristics of each solution. In
addition, the creation of an independent laboratory environment with all commercially available
satellite equipments/services and where service providers/integrators can come and perform
tests would facilitate the selection and integration of the appropriate satellite offer within their
portfolio.
The creation of such an observatory/laboratory should be accompanied by the necessary training
and support actions on specific satellite technological & commercialisation issues allowing to
reduce the learning curve for each new provider and improving user satisfaction.
RECOMMENDATION 10: Reduce the cost of satellite bandwidth through demand
aggregation, use of novel technologies and user incentives
Investment (or CAPEX) costs for hybrid satellite-wireless networks are quite important but have
not been perceived as the main barrier to their deployment since local and regional communities
are in most cases in a position to receive national or European aid for infrastructure deployment.
On the other hand, the operating or service costs (OPEX) have been considered as too high for
the data rates & services provided.
At a first level, the part of the satellite bandwidth cost in the total cost to the end user can be
reduced by a better sharing of the available resources i.e. mix of professional/institutional users
(with a peak usage during working hours) and residential users (with peak usage in the
evening). Along the same lines, public organisations such as ESA/EC could buy satellite
resources in bulk (allowing better negotiation power and thus lower prices) to be provided upon
application to individual broadband projects. As a further action on the supply side, increased
competition on the satellite bandwidth provisioning would be beneficial to bring down the prices.
At the technological level, the implementation and commercial use of novel technologies such as
DVB-S2, Ka-band, multi-beam satellite will allow to improve the ratio Mbps/MHz and as such will
allow to bring down costs.
Finally, on the demand site, tax incentives for users i.e. reimbursement of the cost of
equipment/service are technologically neutral and would allow users in rural areas to take
themselves the initiative to get themselves equipped without having to wait for a
regional/national deployment.
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RECOMMENDATION 11: Reduce the maintenance costs through use of local
technicians
TWISTER project has highlighted the need for improved reliability of the satellite equipment.
This in itself will reduce maintenance costs. Secondly, most problems can be solved rapidly and
efficiently by intervention of a local, skilled, technician. This has the mutual benefit of reducing
intervention delays and costs and increasing local employment.
RECOMMENDATION 12: Development of light-weight transportable terminal and
definition of associated commercial offer with invoicing per use
Satellite services are traditionally divided into fixed and mobile services. The baseline TWISTER
satellite solution consisted of a two-way broadband (2 Mbps/512 kbps) satellite service delivered
through a 60/75 cm dish to be fixed on a roof/wall. For users requiring transportability, the
solutions available today include a laptop size terminal with up to 492 kbps symmetrical
bandwidth, invoiced per minute or volume of usage.
Throughout the TWISTER project we received several requests for a transportable on-demand
broadband service. A first example concerns an educational organisation that provides itinerant
courses on ICT in rural areas and whishing to have immediate broadband internet access
wherever its classes were held. A second example concerned a company organising sport events
for a manufacturer of snow board and surf equipment and clothing. The company has a need to
broadcast live videos of the competition over the internet.
Transportable VSAT type broadband terminals do exist, however they often require to be
mounted on a vehicle and imply a significant hardware investment (15 000 – 30 000 euro). In
addition commercial broadband services offers usually invoice per month of usage which is not
suited to occasional use. On the other hand transportable solutions based on Inmarsat solutions
are lightweight and have an invoicing per use, however the cost per bit sent is very important.
To meet the demands for occasional use broadband access a low cost transportable equipment
should be developed. The solution should auto-install requiring no on-site technician and should
be packaged so as to be transportable by freight or taken as luggage on airplane/train or car. A
commercial services should be defined combining the high data rates of the traditional
broadband offers and the pricing per day/hour/minute or volume of usage as is practised in
mobile services. The offer should also include an option for equipment rental taking away the
need for upfront equipment investment by the user. A parameter to be also addressed is the
issue of licensing so as to allow a flexible plan-European/world-wide service.
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RECOMMENDATION 13: Communicate on successful case studies to local, regional,
national and European authorities and policy makers.
It has been found that several important national and European policy documents on ICT and
the provisioning of broadband access do not or barely discuss the availability and functionalities
of satellite solutions. When indeed they are mentioned, satellite solutions often suffer from a
perception of being costly and difficult to implement.
In addition although most incumbent terrestrial telecom operators have included satellite in their
services offer, we have experienced that this offer is often only available on paper and in
practise they promote their terrestrial (wireline) solutions.
Finally, satellite operators and satellite equipment manufacturers do not always communicate
sufficiently beyond their traditional value chain partners on the contribution satellite could make
to address the digital divide and related challenges.
To increase awareness of public authorities and decision makers on the use of satellite for
broadband in rural areas more promotion should be made of successful case studies.
Such case studies highlight how satellite can accelerate and extend quasi immediately the
coverage of broadband beyond what can be achieved by terrestrial means. A comprehensive
communications strategy should include use of a web site, presentations at conferences, the
organisation of dedicated events, publication of articles in the specialised or mass media,
targeted mailing of information brochures, etc. The ISI (Integral Satcom Initiative) Technology
Platform and ESOA have a pivotal role to play in this communication process and can provide the
necessary support to provide the right messages to the local, regional, national and European
authorities and policy makers.
RECOMMENDATION 14: ESA/EC should organise forums bringing together satellite
industry players, terrestrial service providers and system integrators.
In order for satellite solutions to be widely and successfully deployed they need to be
incorporated in the services package and product-portfolio of established system integrators and
service providers. ESA/EC could be a driving force in bringing together actors of both the
satellite and terrestrial world so as to explore the opportunities for increased cooperation.
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RECOMMENDATION 15: National Regulatory Administrations should implement the
harmonised assignments as approved in ITU and CEPT.
In March 2000 the CEPT approved the Decision on the Exemption from individual Licensing of
VSAT that transmit in the 14.0-14.25 GHz frequency band. Seven years after the CEPT decisions
have been approved 24 CEPT administrations have implemented this decision.
For the sites in France, Spain, Italy and Ireland, the satellite service provider had obtained a
national operator licence so no specific actions needed to be taken. On the other hand for the
sites in Malta, Poland and Greece the CEPT decisions had not been implemented and
consequently licences needed to be requested for each satellite terminal which proved to be a
lengthy and time-consuming process.
In Europe the technical and regulatory conditions applicable for WLAN in the 2400-2483.5 MHz
band are harmonised and contained in the ERC Decision (01)07, adopted in 1995 and revised in
2004. No licence is required to operate in this band Until now 30 CEPT administrations have
implemented this decision in their countries.
No major problems were encountered regarding the use of the 2.4 GHz band for WiFi, as long as
the EIRP limit of 100 mW was respected. For the Greek health care validation sites requiring
connectivity over large distances (> 4 km) in a mountainous area both the use of the 5.4 GHz
and 5.7-5.8 GHz bands had been proposed to improve the link budget but were not authorised
by the Greek regulations body EETT. Thus in the end, only the 2.4 GHz band was available and
consequently the most distant health care centres have been connected directly by satellite.
Although significant efforts have already been devoted to the harmonisation of regulation
throughout Europe, the situation is still far from what would be needed for a true deployment of
pan-European services made of hybrid terrestrial/satellite solutions. For a service provider that
would like to open its service in a new zone, and/or use in its product-portfolio the hybrid
terrestrial/satellite based broadband solutions, the first main issue comes from the difficulty to
identify which regulatory environment applies for each country. The second one comes from
differences in implementation of harmonisation reforms in each country.
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7.2 Broadband Access for Rural Regeneration Using DBV-RCS (BARRD)
7.2.1 The BARRD Project
The BARRD project conducted a trial of Wireless Points of Presence (WiPOP) in a number of rural
business parks across the UK. The WiPOP employed a combination of technologies, using DVB-
RCS to provide back-haul communications and un-licensed WiFi technology for “last mile”
connections
The BARRD project was conceived against a background of increasing concern about the Digital
Divide.
Countries across the European Union were beginning to appreciate the benefits that rural
regeneration could bring to both quality of life and the environment. The UK, had for some
years, experienced a growing trend of knowledge-based workers migrating from the cities to the
countryside to establish small businesses or take up tele-working. This had led to the
redevelopment of dilapidated buildings to provide office space and the rejuvenation of local
communities. Rural business parks had proved very popular in providing affordable, high quality
office space and extremely pleasant working environments.
However, one problem that had the potential to slow down this trend was the lack of broadband
connectivity to many potential business locations. For a number of years the popular belief was
that ADSL and cable technologies would provide low cost broadband communications for all.
However, despite government announcements to do so, it was clear that a large fraction of the
population would not have access to these services because they were out of reach of the local
exchange or connected via outdated copper lines.
In order to provide the benefits of broadband to businesses in remote locations a different
solution was required. This solution had to be cost effective, quickly deployable and adaptable
to the many varied circumstances encountered in the rural community.
The objective of the project was to demonstrate the power of DVB-RCS in providing cost
effective communications to meet the needs of businesses. To achieve this, the system had to
deliver IP connectivity that provided:
• An “Always on”, two-way satellite service – Avanti had found that larger businesses with
more than five of six desktops that considered a PSTN return path used in DVB-S
solutions to be unsuitable for their needs and so the advantages of DVB-RCS had to be
demonstrated;
• A secure means of transmitting data – “hacking” of wireless networks had received much
publicity.
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• A cost effective solution – it was important that the service offered made maximum use
of the bandwidth available in order to keep the cost per MByte and installation fees as
low as possible.
• Fair access to bandwidth – satellite Internet services had suffered in the past from unfair
domination of the bandwidth resources by a small number of users.
• Tiered Service levels – different businesses had different connectivity needs so the
system had to deploy a range of services offering different features and quality of
service.
The project was been undertaken by a consortium of:
• Avanti Communications Ltd (UK). The BAARD team was led by Avanti Communications,
a company that offers a range of operational, satellite communications services to
businesses in the UK. These include a multimedia multicast service to provide bespoke,
in-store TV for retail chains and a DVB-S broadband Internet service to small and large
businesses outside the range of terrestrial technologies. Avanti was focused on delivering
a service infrastructure that could be commercially exploited within the business to
business market.
• EUTELSAT (France), Eutelsat is a major provider of space segment services. It played an
important role in the project by upgrading and operating an existing DVB-RCS hub
located in Rambouillet, France to provide robust, business quality communications
services. EUTELSAT also provided all bandwidth and hub operations services for the
duration of the trial.
• Rural Solutions (UK). Rural Solutions is a leading proponent of rural regeneration, which
pioneered the modern concept of rural business parks at Broughton Hall near Skipton.
Broughton now accommodates up to 40 diverse businesses employing over 500 staff.
Rural Solutions played a crucial role in the BARRD trial, identifying business parks to
participate in the trial, ensuring that realistic trial scenarios were developed and collecting
representative user feedback.
BARRD installed satellite terminals in 20 of the locations shown in Figure 22.
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Figure 22: BARRD Trial Sites
The BARRD user group, though relatively small, contained a broad mix of user experience
(novices and skilled users), user types (business parks, farms and communities) and site types
(widespread hilly regions and local urban areas).
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BARRD continued for a period of 2 years. Initially there were many problems due to unfamiliarity
with the technology, a lack of operating experience and gaps in the tools provided by the
technology vendors. However, during that project lifetime there was a continued improvement in
the performance of the technology and in the ability of Avanti to provide satisfactory operations
and service.
At the end of the project, despite the technical difficulties encountered, significant progress had
been made to confirm the suitability of the technology to provide Internet services to rural
regions. In fact several of the triallists expressed a wish to continue taking the service on a
commercial basis. Sufficient progress had been made to support the gestation of a larger scale
trial, focusing on scalability and operations, namely the INSPIRE trial described next.
7.2.2 BARRD Key Findings
BARRD included technical and commercial evaluations of the project. The evaluations used
different methods, including:
• Bandwidth management – bandwidth management tools were used to monitor and, where
necessary, control the amount of bandwidth being used by the end users,
• Questionnaires – three questionnaires, at the start, middle and end of the project, were used
to ascertain the end user‟s evolving opinion of the technology and service,
• Business models - spreadsheets were used to develop complex cost models to gain insight
into the viability of the system from a commercial point of view.
The key findings of the evaluation were as follows:
FINDING 1: Acceptance
After an initial period, when the system was bedding down, the service was generally well
received, sometimes enthusiastically so. In some cases lives were changed by the possibilities
that opened up. Effort was needed to manage user excitement and to control their expectations
of performance, especially in highly interactive applications. But when this was done, the end
users were happy with the service and gave us good references.
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FINDING 2: Operations
Probably the biggest barrier to providing a competitive DVB-RCS-based Internet service was a
lack of suitable tools for operations. End users are increasingly aware of the Internet market and
have high expectations of support, from lack of downtime to quick problem resolution. The tools
provided for use in BARRD were clearly produced by equipment vendors, as opposed to service
operators. They did not provide sufficient information, were difficult to interface with and extend
and were confusing. They did not inspire confidence. Problems were difficult to identify
(frequently the end user knew of problems before the operator) and even harder to resolve.
Without better tools it would be impossible to provide an adequate service. Further, the
operations tools for DVB-RCS and WiFi did not provide an integrated system that could be used
for end-to-end monitoring and control. Further integration should be done.
FINDING 3: Scalability
BARRD was a limited trial and could be managed by few service personnel, even with the
primitive operations tools provided. However the trial gave some insight into the difficulties that
could arise when expanding the system from 20 terminals to thousands of terminals. This should
be tested in a larger scale trial before commitment to commercial operation is made.
FINDING 4: Cost
The cost of the service was considered high and difficult to market. Even in situations where
there were no comparable terrestrial alternative, end users were aware of the terrestrial price
points and reluctant to purchase a service that was not within close proximity of the ADSL
equivalent. Attention must therefore be paid to reducing the costs of the service, especially in
reducing the two dominant cost factors, namely the price of the satellite terminal and
bandwidth.
FINDING 5: Installation
Several times installation was not initially successful for a variety of reasons. Installation is an
costly business and it becomes prohibitively expensive when there is a need to make more than
one visit to a difficult and remote site. Therefore better and more robust installation procedures
and training are needed. As much configuration as possible should be done in the headquarters,
with as little as possible left to the installation engineer. Terminals need to support this in a
better way with easier configuration interfaces and diagnostics.
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FINDING 6: Commercialisation
The commercial evaluation concluded that:
• There are significant market opportunities for the product in the UK and other European
countries,
• There are identifiable entry and growth markets which offer highest prospects for initial
commercial success and longer term sustainability,
• There is a clear sales and marketing strategy to address those markets.
7.3 INSPIRE
7.3.1 The INSPIRE Project
The INSPIRE project has two key objectives:
• Firstly, to provide a comprehensive validation of the assumptions behind, and the results
arising from, several current initiatives addressing the Digital Divide.
• Secondly to use the information gathered above to provide a detailed, definitive specification
of Operational Standards that should apply to DVB-RCS networks in order to provide a
guaranteed quality of service to end users.
INSPIRE will achieve its objectives through the development of a fully operational, large scale
DVBRCS / WiFi network, providing service for up to 6000 users in two trial regions. These
regions will be carefully selected for their socio-economic and geographic characteristics and aim
to be complementary to other trials that may follow INSPIRE in other regions of Europe. The
trial will cover small, well-defined geographies and for a strictly limited duration to avoid
potential issues with competition regulations.
INSPIRE will deliver a flexible range of services – both basic ADSL-class services as well as
advanced applications which offer flexible bandwidth delivery on-demand – to businesses and
consumers in the trial regions. This will demonstrate that not only is satellite suitable for
providing basic broadband to areas chronically underserved by terrestrial technologies, but also
the flexibility of satellite to deliver advanced services as the terrestrial market place evolves.
INSPIRE is a follow-on project that extends the BARRD experience to a wider scale of operation
and flexibility.
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7.3.2 INSPIRE Key Findings
The objectives of INSPIRE are being met – Avanti is successfully rolling out services to domestic
users in the UK and the Republic of Ireland. There are also several users in Italy. Users are
experiencing very high levels of service and the network is being managed in an efficient and
pro-active manner.
As INSPIRE still has several months left to run it is not yet possible to give the final results of the
evaluation. However the evaluation of the system has been conducted from early in the terminal
role-out and has progressed considerably, to the point where it is possible to report some initial
conclusions.
The technical evaluation has identified already a number of issues and improvements of the
architecture and its components. Examples are:
• The use of an additional CPE behind the SIT for management;
• The extension of the system automatic management capabilities, especially for
configuration management;
• The improvement of the installation including the selecting of optimal accessories such as
cables and brackets.
The commercial evaluation has already partially concluded. Examples are:
• It is mostly not feasible to install more than one CPE per day, in reality 90% of the CPE
installations are done as single installations and take one day including driving time;
• To be more useful the GIS software needs better and more detailed clutter data
otherwise it results in a number of failed CPE installations due to line-of-sight issues;
• The one terminal per customer model is becoming more feasible as the price of the
terminal falls.
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7.4 ZEUS Project
7.4.1 Description of the ZEUS approach
The ZEUS project (www.dias.ea.gr) timely recognized the crucial role of satellite
telecommunications for securing broadband for geographically disadvantaged populations. This
project offered to remote teachers a rich distance learning environment for participating in
synchronous and asynchronous training via satellite networks.
The training programme was attended by teachers at ten sites in the extremities of Greece, via
satellite installations made by the project at their schools. The research in ZEUS focused mainly
on the appropriateness of the training content, the development of a distance training
organisation and delivery method, and the testing of connectivity through DVB satellite links as a
channel for distance training delivery to remote teachers. The outcomes of this project in terms
of training content and methodology are described in detail further below.
As far as the technology is concerned, the DVB satellite link, demanding the use of non-
broadband terrestrial infrastructures (broadband downloading from the satellite, uploading
through ISDN telephone line), caused some technical problems and relevant user dissatisfaction,
which clearly indicated the way forward.
The ZEUS project was the first attempt of addressing the real needs for learning of all citizens
living in remote rural areas, and by fostering the development of lively learning communities in
remote schools and the villages hosting them. Rural Wings methodology builds on the successful
approach of the ZEUS project to develop an advanced technological environment supporting
lifelong learning activities in the school, at work, as well as at home. In this way, familiarization
of all citizens with the new technologies is promoted, resulting in a reduced resistance to the use
of state-of-the-art opportunities for local development.
Through further support, professional development and networking, teachers of rural areas are
encouraged to evolve into catalysts of change and development, not only within their schools,
but more widely within their local communities. The training envisaged would help teachers
enable better quality education in the disadvantaged and demanding context of the remote rural
school, as well as turning them into change agents facilitating local development and the uptake
of technological and structural innovation in their rural communities.
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Such local community networks will enable life-long learning for the entire population at their
learning/working/living place, which is of paramount importance to the European social model.
Ultimately, they will support and enhance local employment, civic and health services, will affect
the local decision making, and will promote a knowledge-based, sustainable local development.
The school as a community centre serves both as a resource for life long learning development
and as a vehicle for the delivery of a wide range of services. School resources such as facilities,
technology equipment, and well trained staff can provide a range of educational and retraining
opportunities for the community.
7.4.2 Experiences for the implementation of the ZEUS project in Greece
The ZEUS experience clearly showed that satellite data telecommunications can effectively
support the provision of training and professional development at a distance, particularly to
professionals such as teachers who work in remote and isolated areas. Nevertheless, ZEUS also
clearly indicated that significant technical difficulties, which in some (limited) cases even caused
obstacles to the smooth running of training, would have been avoided if a more advanced model
of two-way satellite internet provision (DVB-RCS) had been available, not demanding the use of
non-broadband terrestrial infrastructures. This technology is now being deployed within the
Rural Wings project, increasing the expectations of the potential users.
In general, the attitude of the participating teachers towards the training programme was very
positive. In their majority, they were dedicated to the course, and prepared to withstand any
difficulties arising out of technical or other problems. This interest in ZEUS was found to be due
to factors such as a decrease in their feeling of isolation and increased opportunities for
communication with colleagues, new opportunities for access to up-to-date information, as well
as the good relations and rapport developed between the trainees and the staff supporting
them. In addition, given the situation in schools as recorded before the beginning of training,
multigrade school teachers seem to be in real need for training in the use of ICTs, as well as in
new, less conventional pedagogical approaches, which would help them better respond to the
particularly high demands and challenges posed by multigrade classrooms. Observations made
in schools at the pre-course stage revealed a very low level of use of ICTs, as well as traditional
methods of teaching and classroom management that did not appear to offer the best possible
solutions for the particularities of the multigrade classroom.
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The ZEUS experience (Sotiriou et al. 2005) clearly showed that satellite data telecommunications
can effectively support the provision of training and professional development at a distance,
particularly to professionals such as teachers who work in remote and isolated areas.
Nevertheless, ZEUS also clearly indicated that significant technical difficulties (the project was
implemented using DVB technology and ISDN line as return channel), which in some (limited)
cases even caused obstacles to the smooth running of training, would have been avoided if a
more advanced model of two-way satellite internet provision (DVB-RCS) had been available, not
demanding the use of non-broadband terrestrial infrastructures.
Another very clear outcome of ZEUS was a corroboration of the predominance of the appropriate
pedagogical design over mere availability of new e-training technologies via satellite
connections. The different media, tools, and contents need to be orchestrated, according to
clear pedagogical planning principles, into frameworks enabling substantial learning experiences
and maintaining learners‟ interest unabated, so that specific training goals and objectives are
achieved. The findings of the evaluation confirmed the appropriateness of the procedure
proposed by ZEUS for the preparation, realization and support of e-training, which structures a
series of asynchronous preparatory and follow-up activities around a central live session.
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8. Conclusions
The RW project is addressing the “End-to-end satellite telecommunication systems for tele-
education applications” in rural areas underserved by terrestrial technologies.
Several initiatives in the field of satellite telecommunications applications have addressed the
broadband needs of rural communities, indicating the unique advantages of satellite
technologies for providing suitable and ubiquitous broadband solutions.
The present document is an attempt to asses the feasibility at technical and economical level of
the RW proposed system and services with respect to the needs expressed by RW communities.
Most of RW communities already identified are small, isolated, economically underdeveloped
(means with limited financial resources), scarcely populated but with the same expectancy levels
of broadband service as in urban areas, especially for service pricing.
So any technical solution that RW should propose must be flexible, short scale, easy to
implement and maintain and above all cost effective.
Based on analysis done in the Feasibility Study, particularly from site selection and preliminary
user requirements, the consortium believes that the satellite DVB/RCS technology combined with
a last mile wireless access network is the most suitable technical solution for the RW project to
meet user needs and can be used as a key basis of future implementation strategy.
DVB-RCS compliant satellite system, that was the project‟s primary choice, is confirmed as the
best candidate satellite technology to be adopted by the project to guarantee long term viability
of broadband network deployed in RW validation site.
There is no doubt that WiFi is a standard wireless technology that the project can easily adopt
with a minimum risk and that enables cost efficient hybrid broadband infrastructure. The
sustainability of this type of solution has been intensively experimented by projects such as
TWISTER or BARRD. Hybrid satellite-wireless end-to-end systems could provide a solution
immediately, even in some cases to make the transition until terrestrial broadband arrives.
Nevertheless technical issues of implementation of hybrid architecture regarding coverage areas
or management of quality of service should be carefully investigated with respect to the
selection of sites and user communities to be connected by RW.
From an economical point of view, the pan-European market offers an attractive opportunity for
satellite-based broadband services. Analysis shows that, under conservative assumptions,
estimates of total market size are sufficient for a commercially viable business.
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Markets with a sizeable potential for early exploitation can be founded in several European
countries, including some involved in RW (UK, France, Eastern European countries). The
entrance into the non-metropolitan broadband market by satellite service providers is timely.
Early market entrants have paved the way and many trials or pre-commercial projects have
given Satellite Service Providers insights in the roll-out and implementation of a DVB RCS and
WiFi network.
The challenges for SSP are to get its bandwidth and hardware prices to acceptable levels. A
strong focus on innovative ways of delivering connectivity and content is key to success.
Partnerships with bandwidth providers to make available low cost satellite capacity will achieve
this goal combined with expected increased sales and reduced cost in the DVB RCS CPE. Cost of
WiFi equipment will keep coming down as well, based on the mainly urban terrestrial roll-out.
Management challenge will be to balance growth with financial capability to get to a sustainable
growth and to achieve scale in a balanced but as short as possible timeframe.
Hereafter are summarized the points of view of each satellite service provider involved in RW on
the business viability of solutions proposed to the RW users.
Avanti
The original Avanti business model was strongly influenced by the relatively high cost of the
satellite bandwidth and satellite terminal. The rationale was to share the cost of the terminal
amongst a number of users, through the use of cheap WiFi equipment, rather than provide
every end user with his own terminal. The cost of installation was effectively the cost of
installation of the satellite terminal since the WiFi equipment was easy-to-add. The commercial
models assumed a minimum number of end users to achieve break-even but it begged the
question of how to service with smaller sites. It also gave rise to some practical and contractual
questions. Avanti is particularly addressing the high costs of the satellite bandwidth by launching
its own satellite (HYLAS).
Avanti has a positive view about the sustainability of its satellite Internet services and they are
not the only ones. This optimism is backed by a substantial body of information gathered from
governments, business consultancies and market analysts. It is also been tested by sophisticated
financial models.
The sustainability of the project‟s educational applications is unclear for Avanti. It is uncertain
whether such applications will fit into the portfolio of commercially-viable value-added services to
be directly offered by Avanti and, if so, which business model might be used for the purpose. It
is likely that such applications would be marketed by a different organisation with specialist
educational experience and which would utilise the satellite broadband as a virtual network
operator.
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A number of issues have been identified that need to be addressed, for example:
How to define a compelling commercial offer when many educational applications are
already available through the standard Internet?
Whether to accommodate a variety of licensing models, including open source?
Whether support by the appropriate authorities will be required and how such support
can be harnessed?
Eutelsat/TTSA
From the experience of Eutelsat it is obvious that with the D Star portfolio services all possible
applications requested within the Rural Wings project will be feasible to carry out.
The opinion of TELEMEDICINE TECHNOLOGIES (TTSA) distributor is more balanced. For TTSA,
RW is challenging in many respects. User needs evidence several kinds of services presenting
very different requirements: internet access and videoconference for instance. One question is
whether it is possible, in a satisfactory way for the end-customers, to make such service co-exist
on a common (and shared) satellite channel? If yes, can this result in more advantageous prices
and quality of service? What will be for instance, the requirements in terms of satellite
bandwidth to achieve an acceptable quality of service, providing the value for the money?
Appropriate sizing of the required satellite bandwidth is a key component of the final price to the
end-customer and one direction of research is indeed to well tune such sizing. Will such balance
be disrupted if an additional service such as IP telephony is added to the service bundle? Is end-
to-end quality of service absolutely needed and if so, how this can be achieved? Is it possible to
provide intermittent internet access (as this demanded by schools for instance where access is
not required during holidays), and can this result in cost savings for the end-customer? Can the
per use model for videoconference with quality of service achieve competitive prices and a user
friendliness corresponding to the skills of the users? will the variety of service profiles result in
an unmanageable system with exploding user support costs and activity?
Two competing trends have been identified by TELEMEDICINE TECHNOLOGIES: customize to
the maximum extend is technically possible but at higher commercial costs for the end-
customer, while standardizing the offer results in lower tariffs but less flexible service. The whole
task of TELEMEDICINE TECHNOLOGIES in RW is to search for the best trade-off.
Provided that aforementioned issues are solved, sustainability (for a service provider) and lower
tariffs (or per use) will result from the capacity to concentrate different types of traffic and
services in a common satellite bandwidth pool with proper and automated, as much as possible,
regulation rules.
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HELLAS SAT
Based on the nature of the RW project, it can be said that this is a fairly new market for HELLAS
SAT.
HELLAS SAT offers packages that mainly target business customers and this is how they have
been designed. The offered price may seem high for residential users or for educational
purposes for small schools. On the other hand the advantages of having broadband access and
the possibility to have access to the information that the internet makes available are very high.
Cost of terminal will be offered at reduced price for RW sites. Regarding the monthly fee, this
can be shared by installing WiFi networks and give the opportunity to various users to share the
capacity and cost. The trials will give a clearer view of how, when and how much each user uses
the service. This will help Hellas Sat as satellite operator and service provider to tailor a better
solution for these customers/users and offer them a package that better suits to their needs and
this will reduce the cost for the user.
Most sites that will be deployed in the frame of RW will be schools. The available capacity to
each school, which mostly will be used during the morning by the schools, can be used in the
afternoons by the local community or even by students in their houses. In this case as well the
installation of a WiFi network will help achieving that.
In general, it is expected that by reducing the cost of the satellite terminals and equipment as
well as the monthly fees, the satellite broadband market will rise. Service provision tailored to
the customer needs will help reduce the price as well.
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Appendix 1: List of Abbreviations and Acronyms
3G Third Generation of Mobile Phone system
ADSL Asymmetric Digital Subscriber Line
ABL Avanti Broadband Limited
AVANTI Avanti‟s broadband service
BFWA Broadband Fixed Wireless Access
CIR Committed Information Rate
CAPEX Capital Expenditure
DDSO Digital Divide: the Satellite Offer
DOS Denial of Service (Attack)
DVB Digital Video Broadcast
DVB-S Digital Video Broadcasting via Satellite
DVB-RCS Digital Video Broadcasting – Return Channel via Satellite
EDN Electrical Distribution Network
FAP Fair Access Policy
FS Fixed Services
FSS Fixed Satellite Services
GW Gateway
IAP Internet Access Provider
ICT Information and Communication Technology
IDU In-Door Unit
IP Internet Protocol
ISP Internet Service Provider
LAN Local Area Network
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NOC Network Operation Center
NSR Northern Sky Research
ODU Out-Door Unit
PLC Power Line Communication
PEP Performance Enhanced Proxy
POP Point of Presence
POP-WiFi Point of Presence WiFi
PSTN Packet Switch Telephone Network
QoS Quality Of Service
ROI Return On Investment
RW Rural Wings
SAP Satellite Access Point
SLA Service Level Agreement
SME Small and Medium Enterprise
SOHO Single Office Home Office
VOD Video On Demand
VOIP Voice Over IP
VPN Virtual Private Network
VSAT Very Small Aperture Terminal
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Appendix 2: RW Answers to EC Reviewers’ Comments
EC Reviewers’ Comments
This section provides an overview of major comments made by EC reviewers during the first RW
Review held in Toulouse on June 2007 and related to WP2 work and particularly Deliverable
D2.3 (Synthesis - Feasibility report).
General EC Reviewers comments on WP2 and D 2.3
WP2 (Feasibility study) has 3 deliverables due within the current reporting period:
D 2.1 Available and planned applications and satellite scenarios
D 2.2 High level definition of the end-to-end system architecture
D 2.3 Synthesis Feasibility report
All documents produced within WP2 seem to lack to some extent the broader view on the
technological and economical issues: the information provided is mostly extracted from within
the partner organisation and even from within the project set up but not adequately elaborated
and integrated.
Information is insufficiently referenced where it relates to external sources to assess their
relevance for the RW project. Important sources of information for example with regard to the
economical feasibility don „t seem to be consulted, for example the ESOA, the European Union
Committee of the Regions, ERISA, Inforegio etc. Idem with national policies or initiatives (e.g.
JISC UK, the Rabbit-Broadband Initiative and the RBAP UK etc.).
There seems to be a serious imbalance between resources spent in WP2 and its outcomes.
Comments on D 2.3 Synthesis Feasibility report:
1. The document does not provide the information promised in the Work Package Description in
the proposal. No information can be deduced on the financial viability of RW. It should in its final
format appear as a Feasibility report (as outlined in the WP description).
2. the document contains incomplete information, in part even obsolete. It also appears to have
been inadequately harmonized from inputs received from several sources.
3. Sect. 6 should present possible business models for a RW service (as stated in the project
proposal). Instead, section 6.1 addresses possible technologic advances to reduce cost of service
provision. It is unclear how these are reflected in the financial calculations.
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4. The elements which are required in order to assess the RW service provision cost are not
analysed.
5. The report needs to be completely rethought and reworked. In its current format it does not
reflect the findings from the other sub WPs.
6. Appropriate QA standards to be applied, e.g. appropriate references, sources, readable
figures, etc.
Detailed EC Reviewers comments on D 2.3
Where are the multiple business models for 2-way satellite services? (ref. WP2, p.112-113 of the
proposal)
Satellite and terrestrial bandwidth costs are not identified. Hub and subscriber equipment costs,
infrastructure financing, service pricing, cost of customer acquisition and marketing, installation
costs are all missing.
Section 3 is ok, with an analysis of the satellite broadband market.
Section 4 is inadequate. In particular section 4.2.1 does not provide a relevant overview of
commercial offers not based on satellite, but a general presentation of the structure of the
market for terrestrial telecommunications. The key issues (pricing and availability) are not
addressed. Offers based on cable TV, Wireless technologies are not addressed.
Section 4.2.2 is a rather superficial and limited overview of services offered over satellite. It is
dated at the time of issue of the document (ref. Ouranos). The higher price offerings of
Internet-over-satellite are not critically discussed (i.e. why is the cost of internet access based of
satellite more expensive) and the cost of service provision is not analysed.
Sect. 4.2.3.3 provides recommendations which are rather superficial. The emphasis on WiMAX is
not justified by facts. The issue of cost of satellite capacity is not addressed at all.
Sect. 6 should present possible business models for a RW service (ref. proposal). Instead,
section 6.1 addresses possible technologic advances to reduce cost of service provision. It is
unclear how these are reflected in the financial calculations.
Sect 6.2: Business models are missing. It also refers to outdated material not relevant to RW
(ref. the Avanti service using the Eutelsat RCS hub).
Sect 6.3: The Hellas sat section is a superficial overview of the broadband service provided by
Hellas sat.
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Sect. 6.4 concentrates on the Telemed service provided by Eutelsat, but it is unclear how the
information provided relates specifically to RW and it does not appear useful to generate a
business case. No figures on the cost of service provision are provided, only the prices.
Sect 6.5 describes Hughes DirecWay but the material is obsolete (focus on DW6000 instead of
DW 7000). The fact that DirecWay is offered in Europe is ignored (possibly because of outdated
data)
So at the end of the section there is no business case, no assessment of costs (e.g. space
capacity, hub and wireless infrastructure), financing, expenses.
Sect. 7, the conclusions are a mix of unsubstantiated considerations (i.e. not backed by material
presented in the previous sections). There is no information that can be deduced on the financial
viability of a service like RW.
In summary, the document D2.3 does not provide the information promised in the Work
Package Description in the proposal. No information can be deduced on the financial viability of
RW. The document contains incomplete information, in part even obsolete. It also appears to
have been inadequately harmonized from inputs received from several sources.
D2.3 Updates w.r.t. EC Reviewers’ comments
With respect to EC Reviewers‟ comments the updates of the present document have been traced
in the following matrix.
New
Document Update
Item EC Reviewers Comment Section
Actions
#
The document does not provide the The format of the
information promised in the Work document has been
Package Description in the proposal. completely updated to
No information can be deduced on the appear now as a feasibility
financial viability of RW. It should in its report.
final format appear as a Feasibility Section 3
RC01 report (as outlined in the WP Section has been added to
integrate the outcomes of Section 4
description).
other WP2 tasks
The report needs to be completely addressing other aspects of
rethought and reworked. In its current feasibility of RW solutions.
format it does not reflect the findings
from the other sub WPs.
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New
Document Update
Item EC Reviewers Comment Section
Actions
#
Information has been
checked. The new version
The document contains incomplete
of the document has been
information, in part even obsolete. It
focused on financial
RC02 also appears to have been n/a
element provided by
inadequately harmonized from inputs
Service Providers involved
received from several sources.
in RW (Avanti, Hellas Sat,
Eutelsat/TTSA)
The elements which are required in
These elements have been
RC04 order to assess the RW service Section 6
added.
provision cost are not analysed.
Appropriate QA standards to be
Appropriate QA standards
RC05 applied, e.g. appropriate references, n/a
have been applied
sources, readable figures, etc.
Where are the multiple business
models for 2-way satellite services?
(ref. WP2, p.112-113 of the proposal) Section has been
completely updated and
Satellite and terrestrial bandwidth costs information have
RC06 costs are not identified. Hub and been provided by each Section 6
subscriber equipment costs, Satellite Service Provider
infrastructure financing, service (Avanti, Hellas Sat,
pricing, cost of customer acquisition Eutelsat/TTSA)
and marketing, installation costs are all
missing.
Section 3 is ok, with an analysis of the
RC07 No change Section 5
satellite broadband market.
Section 4 is inadequate. In particular This section has been
section 4.2.1 does not provide a effectively considered as
relevant overview of commercial offers inadequate in the
not based on satellite, but a general framework of D2.3.
presentation of the structure of the
RC08 The section has been n/a
market for terrestrial
removed.
telecommunications. The key issues
(pricing and availability) are not Major part of information
addressed. Offers based on cable TV, related to commercial
Wireless technologies are not offers (Satellite) is included
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New
Document Update
Item EC Reviewers Comment Section
Actions
#
addressed. in section 8 of the present
document.
Section 4.2.2 is a rather superficial and
limited overview of services offered WIMAX technology or
over satellite. It is dated at the time of solutions are investigated
issue of the document (ref. Ouranos). in the D2.1 and D2.2
The higher price offerings of Internet- deliverables.
over-satellite are not critically
discussed (i.e. why is the cost of
internet access based of satellite more
expensive) and the cost of service
provision is not analysed.
Sect. 4.2.3.3 provides
recommendations which are rather
superficial. The emphasis on WiMAX is
not justified by facts. The issue of cost
of satellite capacity is not addressed at
all.
This section has been
Sect. 6 should present possible reviewed and focused on
business models for a RW service (ref. the feasibility assessment
proposal). of RW solutions w.r.t. the
RC09 So at the end of the section there is no business modelling of each Section 6
business case, no assessment of costs Satellite Service Provider
(e.g. space capacity, hub and wireless involved in the project
infrastructure), financing, expenses. (Avanti, Hellas Sat,
Eutelsat/TTSA)
…Instead, section 6.1 addresses
possible technologic advances to Section 6.1 has been
RC10 reduce cost of service provision. It is removed and integrated in n/a
unclear how these are reflected in the the section
financial calculations…
Sect 6.2: Business models are missing.
This section has been
It also refers to outdated material not
RC11 reviewed and completed by Section 6.1
relevant to RW (ref. the Avanti service
AVANTI
using the Eutelsat RCS hub).
RC12 Sect 6.3: The Hellas Sat section is a This section has been Section 6.2
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New
Document Update
Item EC Reviewers Comment Section
Actions
#
superficial overview of the broadband reviewed and completed by
service provided by Hellas Sat. HELLAS S AT.
The Satellite and terrestrial bandwidth
costs need to be identified as well as
hub and subscriber equipment costs,
infrastructure financing, service
pricing, cost of customer acquisition
and marketing and installation costs.
Sect. 6.4 concentrates on the Telemed
service provided by Eutelsat, but it is
unclear how the information provided
This section has been
relates specifically to RW and it does
RC13 reviewed and completed by Section 6.3
not appear useful to generate a
EUTELSAT and TTSA.
business case. No figures on the cost
of service provision are provided, only
the prices.
Sect 6.5 describes Hughes DirecWay
but the material is obsolete (focus on
DW6000 instead of DW 7000). The This section has been
RC14
fact that DirecWay is offered in Europe removed.
is ignored (possibly because of
outdated data).
This section has been
updated to reflect the
Sect. 7, the conclusions are a mix of
conclusion of each section
unsubstantiated considerations (i.e.
of the document and
not backed by material presented in
provides overall
RC15 the previous sections). There is no Section 8
assessment of viability of
information that can be deduced on
RW solutions according to
the financial viability of a service like
the views of satellite
RW.
service providers involved
in the project.
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