Let us Talk About the Price Point

LEO, MEO, ICO, or GSO satellite? The government needs to take a serious look at how effective any of these could be for India before saying yes

By Brijendra K Syngal

There is so much of print media space being occupied with various satellite companies vying for the burgeoning data hungry market in India knocking away at the doors of Sanchar Bhawan that tall building in the centre of Delhi, and custodians of anything telecommunication. The tagline of all is fast speed broadband, without ever mentioning or defining fast broadband, that moving forward how it will gel with Atma Nirbharta (self-reliance).

These projects some three of them, and of course the ubiquitous, tried and tested old horse of geosynchronous satellites, which barring latency for certain applications is ideally suited in terms of throughputs, capacity and deploy ability. They are being bandied around as the saviour of broadband internet connectivity; anytime and anywhere to watch Netflix inside, say Atal Tunnel in the hills, in the name of low latency that it offers.

What has low latency to do with Netflix, one might ask? This is quite akin to the Pepsi way of hyping their drink. PepsiCo had envisioned marketing Frito-Lay snacks alongside Pepsi-Cola soft drinks. In an interview with Forbes in 1968, PepsiCo CEO Donald Kendall summarized this by noting that “Potato chips make you thirsty; Pepsi satisfies thirst.” His plans of jointly promoting the soft drink and snack products were thwarted later that year, when the Federal Trade Commission ruled against it.

So is this a case of creating Netflix addiction to create demand?

Geosynchronous Satellite Orbit (GSO) can carry far more powerful signals than needed for Netflix. As the story unfolds about the real efficacy of these systems, and price points well beyond the pockets of ordinary Indians, it appears much ado about nothing. The past record of these systems has not been that great. At the best they can be described as hobbies of the promoters, like building Meccano sets.

Unless questions like real capacities, audience they can address simultaneously, and the applicability in our environment is asked, the systems are pure simple glitzy, pipe dreams. Let the price points be produced in terms of tariff per bit/byte.

I am not against induction of technology, having lived with cutting edge technology since the early sixties. In the mid-eighties I had my first encounter with Low Earth Satellite (LEO) system christened Iridium on the basis of the atomic number of the metal involving 77 satellites, which subsequently got reduced to 66, but the name stuck on. This US-promoted system raised some billions of dollars, finally going up in smoke and chapter 11, the saviour of all. Each satellite can have four inter-satellite links: one each to neighbours fore and aft in the same orbital plane, and one each to satellites in neighbouring planes to either side. The total setup cost for the first-generation fleet was approximately USD5 billion.

Insufficient market demand existed for the product at the price points on offer from Iridium as set by its parent company Motorola. The company failed to earn revenue sufficient to service the debt associated with building out the constellation and Iridium went bankrupt, one of the largest bankruptcies in the history of United States at the time.

This was followed by 288 satellite system of Teledesic that gained early funding from Microsoft Chairman Bill Gates, McCaw Cellular Communications founder Craig McCaw, and Saudi Prince Alwaleed bin Talal. The system would have used Ka band to send and receive signals from users. Each satellite would have acted as a node in a large-scale packet-switching network. The service was planned to begin in 2002 with a total cost of the project estimated at USD 9 billion.

The initial rollout was to include 12 orbit planes with 24 spacecraft in each plane. The antenna footprint for each satellite was to be about 700 km. Teledesic planned 288 satellites in 12 low earth orbits, each at an altitude of 1,315 km, but the project was still born after some USD10 billion was proposed to be spent (1997-2002). This was followed by two Intermediate Circular Orbit (ICO) satellites (1995-2003), and Globalstar. ICO after raising USD6-7 billion dollars died. Globalstar survives. Iridium too survived after chapter 11, when sold for USD 66 million. And there were others collapsing at the drawing board level.

Yet another one to collapse was Project Loon of Loon LLC, an Alphabet Inc. subsidiary working on providing internet access to rural and remote areas. The company used high-altitude balloons in the stratosphere at an altitude of 18 km to 25 km to create an aerial wireless network with up to 1 Mbit/s speeds. A reference to the balloons used, Project Loon began as a research and development project by X (formerly Google X) in 2011, but later spun out into a separate company in July 2018. In January 2021, it was announced that the company would be shut down.

India invested some USD700 million – by a consortium led by IL&FS and SBI as the anchor promoter, and USD150 million of VSNL money respectively on these two systems in 1990s. Their ground stations are mothballed at Dighi near Pune and Chattarpur in Delhi. The main reasons for the failure were inordinate delays from concept to commissioning, unrealistic tariffs at USD8 per minute and addressable audience of few million or so. In the meantime the GSM swept the world with Tsunami-like force, further eroding the applications, utility, and viability. The capacities on offer were not much to write home about.

OneWeb, too, has come out of chapter 11, rescued by the Government of the United Kingdom and Sunil Bharti Mittal. Let us come to the central point: are these systems really capable of delivering or are they taking for a ride our gullible system built more on public perception than merits, supported by hard numbers? What more are they promising, except broadband for all and Netflix inside Atal Tunnel?

A quick look at the details of the three companies engaged in satellite-based internet projects reveals that Telesat is the most efficient system in terms of average Gbps/satellite, with more than 4x SpaceX and 10x OneWeb. It is also important to note that the limiting factor for SpaceX is the ground segment, as they need to deploy a very large number of ground stations and gateways to operate at full power. For OneWeb, the space segment will prove to be the limiting factor (user links data-rate).

So what is this tall talk of broadband for all? Either one must revise the broadband definition or ask how they propose to service some millions of Indians, data hungry aspirants. Elon Musk the Starlink promoter has himself admitted that the system is designed to meet 19 million unconnected in US, with such a huge investment. For him this is self-fulfilling, self-promoting venture, but how does he intend to address the market in India and that too at unexpectedly exorbitant price points, to recover his costs?

OneWeb appears no better placed than Starlink. Yet on the horizon is Jeff Bezos promoted Kuiper. Here are some conclusions with hard numbers.

• OneWeb: 1.56 Tbps with 71 ground stations (720 satellites)
• Telesat: 2.66 Tbps with 40 ground stations (117 satellites)
• SpaceX: 23.7 Tbps with 123 ground stations (4,425 satellites)

The most effective system in terms of Gbps/satellite is Telesat (22.7 Gbps/sat), thanks to the low number of high capacity satellites, low elevation angles to user links, use of ISL and digital payloads, and use of two active gateway antennas. SpaceX constellation, on the other hand will require an extremely large ground segment with hundreds of ground stations and ~3,500 gateway antennas to operate at maximum throughput. OneWeb’s constellation could significantly reduce their ground segment if they had used inter-satellite links (even at moderate data-rates ~5 Gbps).

The western world model is simply based on creating hype, lure into creating a third party interest, seek investments worldwide, and eventually use their technology prowess to benefit and deliver. Where would all these figure in terms of self-reliance, our NDPC 2018 policy of broadband for all and USD 100 billion investments? These are tough questions that must be asked and addressed with hard numbers, not whistling in the winds.

Be that as it may, and as foretold above, the questions arise: what actions must the government take or what should it ask these ventures to do before they are allowed to enter the data hungry, price sensitive market in India.

From the above description one does not feel convinced whether they can fulfil their tall talk of internet for all and that too at USD 99 a month, and entry fee of USD 499.00 (Starlink). It would be the same story as in the cases of Iridium et al. Even if that is given, how many customers realistically would they be able to address. Let us talk numbers, with price points

They must apply for all clearances in the same format as applied for in their backyards, like FCC, OfCom and various other European regulators, and complete transparency in setting up adequate number of gateways with state of the Legal Intercept Mechanism on the basis of CALEA law in US, and European laws, at their expense. Let them not look at any government funding.

The government would be well advised to take all actions for compliance before they generate third party interest a la Twitter, Facebook, and Google, etc. How does all this match with local manufacturing of customer premises equipment, ground stations and satellites?

Syngal, a former CMD of VSNL, is presently Senior Principal with Dua Consulting

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