SP: Not long ago, we interviewed Telespazio Brazil and Marzio listed the business units of Telespazio at a global level. Given that each country has distinct realities, can you please let us know which units have a stronger focus on Argentina and countries that Telespazio Argentina manages?
Recalt: We have presence across three business units: “Network & Connectivity”, “Geo-information” and “Satellite Operation” – We cover all the Spanish-speaking Latin American territory, with focus on the South Cone for telecommunications (N&C) and Central American countries for cartography (GI). Attached is a corporate brochure for more information.
SP: Telespazio Argentina was one of the first satellite service providers who identified in the region the need and opportunity to offer outsourced satellite backhaul links to mobile network operators. Which were the drivers and trends that Telespazio identified which prompted it to kick start such initiative?
Recalt: Historically, Telespazio Argentina has been linked to the business of satellite transport: TV signals, voice and data trunks, etc. utilizing dedicated SCPC links. In the region, we gained great experience with the first projects in 2007 when we had to implement the first backhaul network using IP-TDMA technology to provide 2G backhaul over satellite to an operator in a geographic location; where it needed to gain independence from the dominant player in such region where our client operator intended to grow. Because of confidentiality reasons we cannot reveal the names of the mobile network operators but I understand this is a common situation in Latin America; with strong regional or national incumbents who make it hard for new network operators to deploy mobile network resources.
In general, years ago we identified a few trends indicating that satellite service providers like Telespazio could offer specialized satellite backhaul services to mobile network operators. These trends were (and still are):
- “Core Business”: Mobile network operators are not focused on the use of satellite networks, because satellite links generally represent a small subset of all the backhaul links in their network. “Telcos” -who in many cases are linked to sister mobile operators- used to have much larger satellite operations than today when submarine fiber was not as prevalent. Many of the international links that carried voice, data and Internet were over satellite. This has practically disappeared now, so the satellite focus of these large “telco” players has diminished over time and is now very marginal.
- Satcom Technology Upgrade: For satellite service providers like us, the cost of the satellite capacity is much higher in relation to our costs that it is for telcos and mobile operators, who have much larger structures and terrestrial networks. As a result of this, we are far more incentivized to continuously seek technical solutions for spectrum optimization. This then has a positive impact in the sense that we can agilely offer win-win integrated solutions that are attractive from the point of view of the mobile operators.
- Migration to IP Backhaul: The global trend to make use of wireless radio-bases with IP interface ports make satellite backhaul links more “virtualizable” and thus “outsource-able”. This trend will be further emphasized with 3G and 4G technologies.
SP: Can you please provide details of how Telespazio came up with the design for the project of integrated backhaul links provided to a cellular operator in Argentina. Telespazio´s “win-win” offer prompted the mobile operator to make the decision to outsource a large number of their satellite backhaul inks to Telespazio.
Recalt: Our offer was based on replacing an old SCPC-based network. We proposed use of a shared VSAT IP platform with TDMA returns, on which we increased spectral efficiency by using outbound carrier cancelation technology and the most advanced backhaul optimization equipment, which optimized traffic and mediated between the IP network and the BTS-BSC cellular network.
Al this was integrated as a unique service offering. We also changed the satellite spectrum band from C band to Ku band, which gave us an extra advantage by making use of pre-existing satellite dishes (of larger size than the commonly used for Ku band). But the most innovative aspect was that Telespazio took care of all the network investment and improvements, while the mobile network operator offloaded itself from all this and only paid for the service based on savings of 30% in OPEX. Not only did the operator substantially lower its satellite backhaul OPEX without investing but it also capitalized OPEX in CAPEX towards end of service contract, since the mobile operator later takes ownership of all network resources at no additional cost.
In short, we crafted an unbeatable, “future-proof” offer at low cost based on our dual expertise as integrator and service provider, which allowed us to take full advantage of latest satellite spectrum and cellular backhaul optimization technologies.
SP: Which changes to the Argentine satellite business do you foresee as a result of the (direct or indirect) effects caused by the recent launch of Argentine ARSAT-1 satellite? Do you believe that this satellite and its successors will augment the options for leasing satellite capacity and foster more competition among satellite operators, in a way that this could benefit satellite service providers like Telespazio?
Recalt: The ASAT-1 launch means excellent news for the Argentine satellite marketplace, because it will provide more and better coverage for the domestic and regional service providers. It will also bring the challenge to provide better operating and service conditions, foster development towards other countries and picture Argentina as a leading case for high-quality technology development.
SP: How do you believe that the competitive environment will be modulated as a result of the proliferation of high throughput satellites (HTS)? Although in Argentina there are no HTS cases yet, there are indeed in the region HTS platforms operating including Ka band spot beams provided by O3b and Hispasat. Which segments and applications could benefit from a lower cost of satellite bandwidth?
Recalt: Ka-band and HTS satellites in general (Ku and Ka) will bring bigger opportunities for the development of SME and Soho business, and maybe for the consumer market as well, while the latter has not yet experienced explosive growth. We have a high demographic density in cities where all connectivity solutions focus because of market size and opportunity. We have different realities and regulatory environments change on a country by country basis. There is no single equal market and opportunities must thus be balanced in each case to maximize the benefits brought by use of new technologies.
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