Will History Repeat for Major New Satellite Constellations?

The assumption made by a number of would-be operators of brand-new satellite constellations designed to bring Internet access rapidly to users across the globe is that there is a sizable untapped market.

That is true today. How true the assumption might be in several years is the issue. That has been a market-opportunity killer in the past. An earlier generation of entrepreneurs argued new satellite constellations would supply huge unmet demand for mobile telephone use.

Instead, mobile operators moved dramatically to fill the demand before a couple of the ventures could launch, while Iridium, which did launch, went bankrupt.

That scenario is at least conceivable, once more.

Consider Thailand. Though details are yet unsettled, Thailand wants to launch a national high speed access program to reach literally all villages in Thailand, and provide affordable Internet access for all,  within about 18 months.

If implemented, the initiative could affect the addressable market for new providers, as well as market share of mobile and fixed service providers in rural areas of Thailand. Replicated more broadly across South Asia and Southeast Asia, the market opportunity for affordable Internet access provided by satellite could shrink dramatically.

It is unlikely mobile Internet service providers, for example, will do nothing, and wait for the demand to be filled by rival suppliers. In Thailand, the government itself has ambitious plans.

"Infrastructure  is the fundamental factor of the digital economy,” said Deputy Prime Minister MR Pridiyathorn Devakula.

The focus on digital-economy policy is touted as the key foundation of the country's economic development. To be sure, previous governments have made the same argument.

Thai Internet access adoption currently is about 26 percent of households.

Thailand also is preparing for an auction of spectrum to support fourth generation Long Term Evolution networks in Thailand.

Just how much spectrum will be made available is yet unclear.

NBTC Secretary-General Takorn Tantasit announced that a 50 MHz spectrum cap would be put in place for private sector bidders in Thailand's upcoming 4G auction and would take into account current spectrum holdings.

That move is intended to stimulate competition by ensuring that smaller bidders can acquire spectrum.

Two licenses of 12.5 MHz each in the 1800-MHz band will be available, as well as 20 MHz of 900 MHz spectrum, the bulk of which is currently being used by AIS under concession from state-owned TOT.

The Thai government also has asked the Information and Communication Technology Ministry to reclaim 100 MHz of unused 2.3 GHz spectrum from state-owned operator TOT for re-bidding as part of the upcoming 4G auctions.

At a meeting of the digital economy committee last week, deputy prime minister Pridiyathorn Devakula asked the National Broadcasting and Telecommunications Commission (NBTC) to look at including additional spectrum bands in the auction as well as the planned 900 MHz and 1.8 GHz bands.

The ICT minister has suggested that in return for giving up spectrum, TOT might be allowed to keep the 17.5 MHz of 900 MHz spectrum now used by market leader AIS.

At issue is whether some 2.6 GHz spectrum will be part of the auction. That seems unlikely, as use of 2.6 GHz for Long Term Evolution is not a global standard. Those frequencies were previously used by state-owned broadcaster MCOT.
Though Thailand is free to do so if it chooses, costs of handsets would be affected, as suppliers would have to create special Thai versions of their devices. Some other infrastructure implications, such as cell site planning, also would be affected.

National Broadcasting and Telecoms Commission (NBTC) the freedom to choose which spectrum bands it will auction and what format the sale will take. It has 900 MHz, 1800 MHz and 2.6GHz frequencies at its disposal. http://www.totaltele.com/view.aspx?ID=489415
The 1800 MHz spectrum the state has earmarked for 4G was previously used by True Move and AIS unit Digital Phone Co (DPC) for 2G services.
Some would argue the 50-MHz spectrum cap is specifically intended to help Dtac, a smaller provider in the market.

The larger point is that the market for consumer Internet access across South Asia and Southeast Asia seems to be entering a more-aggressive phase. ISPs will have to move faster to take advantage of the opportunity.
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