U.S. Broadband by Satellite Fared "Relatively Well" During Recession

U.S. providers of broadband access by satellite services did roughly as well as fixed-line providers during the recent recession, Northern Sky Research says. "After a year of uncertainty, the majority of signs indicate the sector made it through the worst economic crisis since the Great Depression relatively well," researchers at NSR say.

"North America set a milestone by becoming the first region to top one million subscribers, and Western Europe will likely exceed 100,000 subscribers well before the end of 2010, says NSR.

According to Hughes Network Systems November 2009, the company was adding about 17,000 gross subscribers a month. Wildblue, now part of ViaSat, added roughly 8,333 new customers a month in 2008, for a total gain of 100,000, and about the same number, it appears, in 2009.

Satellite broadband access providers saw that few consumers and businesses were willing to give up their broadband service in difficult times, NSR also says, as was the case in the fixed-line market as well.

Satellite services tend to get brutal complaints about speed, cost and customer service on some discussion boards and forums, but for many consumers, satellite broadband might be the only current option. Faster speed services are coming, though, as a new generation of high throughput satellites will provide higher-speed connections.

It seems unlikely the faster speeds will silence all complaints, but should help.

Globally, NSR projects that broadband VSAT networking, satellite broadband access, and broadband trunking and backhaul services will generate nearly $8.8 billion by 2019, which is a 135 percent increase over 2009.

Global satellite broadband access will add the most new revenues, some $4.1 billion between 2009 and 2019, to become the leading market segment and bypass traditional broadband VSAT networking in revenue terms as of 2013. Traditionally, commercial customers ordering up private satellite networks have been the revenue driver, so the switch to consumer services is a big change.

Has Muni Wi-Fi Missed the Window?

Municipal Wi-Fi arguably had a market window within which it had to get traction or lose out to cable companies and especially telcos. With EarthLink now backing out of the remaining deals it originally negotiated, that window could slam shut. That isn't to say there might not be some niches it could fill, but they will be smaller niches.

The higher end part of the fully mobile market will be able to buy fourth generation mobile services, broadband based on 700 MHz spectrum, WiMAX and 3G broadband services. The tethered part of the market will simply find cable modem, Digital Subscriber Line and fiber to home services too attractive to ignore as well. The out of office portion of the market increasingly can use T-Mobile hotspots, hotel Wi-Fi and airport Wi-Fi.

Clearwire and satellite broadband are going to make more sense in most rural markets, though independent ISPs continue to offer basic tethered access using Wi-Fi technologies adapted for more focused line of sight deployment.

Wi-Fi had to get into place before WiMAX arrived, and it looks like it simply is too late to be a sizable mass market access opportunity. That isn't to say hotspots are not a business at all; simply that it is a niche.

That said, sizable niches do exist for providers of satellite broadband in some segments of the market. WildBlue, ViaSat, Gilat and HughesNet prove that the niche exists. And Spaceway might someday create additional niches in the smaller enterprise market as well. Wi-Fi, though perhaps not of the muni variety, might continue to provide such a niche.