Prohibitive prices for satellite broadband will be a thing of the past once take-up for the service increases, according to one of the UK’s leading satellite broadband providers.
Since the advent of satellite broadband, the technology has been cited by many as a solution to the challenges of establishing connectivity in remote and far flung areas. To this end, is to be employed selectively by the government as it looks to fulfil the aim of achieving 2MB broadband for all under the Digital Britain project.
However, a number of broadband industry experts have questioned whether broadband delivery via satellite is a viable technology. This is principally because of the costs involved - installation can cost an individual between £300 and £400. Furthermore, it is also a concern that usage limits for users are small compared with ADSL and fibre optic broadband deals.
Consequently, when reports appeared last month that Avanti Communications could soon offer a 2Mb satellite broadband package for just £15 per month the news was greeted with scepticism in some quarters. In particular, it was noted that installation costs and download limits were not present in the coverage.
In an exclusive interview with Top 10 Broadband, Simon Barrett, head of European marketing at Avanti, has countered the criticism. He claims that although for the time being installation fees will continue to be a feature of the service, these will diminish dramatically once a larger customer base is in place.
He said: “I think one of the problems with satellite services is that the volume currently in Europe is still pretty low. And we’re tied to other currencies in terms of delivery of end-user terminals.
“However, we expect our terminal costs to reduce significantly. I think in the first instance that we’re still going to be looking at around the £300-400 installation mark. But once we get the volume up, then we can see some benefit from it.”
To back up his assertion, Mr Barrett, who was part of UK launch team for broadband at BT, cited the example of US satellite broadband provider Wild Blue. Since the company's inception in 2005, installation costs have fallen dramatically and it now offers the service for free when customers pay around £170 for the necessary equipment. This has occurred in tandem with a sustained rise in subscriber numbers, with some one million Americans now taking advantage of its services.
Claims that satellite broadband usage limits are too low to cope with the needs of modern users were also countered by Mr Barrett, with reference to the consumer experience offered by Avanti’s services in Scotland.
He commented: “In Scotland, the current usage limit for our minimum package is 5GB. The current average user profile is about 3.3 GB, so we’re actually underneath it.”
Avanti is currently preparing to launch the Hylas satellite, which is due to go up before the end of the year once testing is complete. The company expects to be able to launch its £15 per month service two or three months later.
Hylas has been designed as a low cost platform and employs technology that is widely used in the US but is new to Europe.