European pockets lack high-speed internet

Analysts estimate that for as many as 30 million households in Europe, broadband connections are unavailable or so sluggish as to be deemed obsolete in a modern, digital economy.

Those households are the target customers for two new services that aim to deliver broadband to European customers via satellite, a technology that until now has been a little-used alternative to cable and telephone lines.

A British start-up company called Avanti Communications launched a $159 million satellite into orbit last Friday, the first of two devices it plans to use to deliver broadband to as many as 1.2 million customers across Europe, West Asia and Africa.

Three weeks from now, Eutelsat, a French company that has its roots in a European intergovernmental agency, plans to launch a much bigger satellite capable of providing broadband to two million households.

Low penetration

While tens of millions of people across Europe pay for television delivered by satellite, only about 1,50,000 consumers in the region get their internet access in this way. Existing satellite-borne internet services are considered slow, expensive and prone to glitches.

But Eutelsat and Avanti say their new spacecraft could change perceptions. Their services, which are expected to be commercially available next year, are the first satellite broadband offerings outside the United States to operate on a new transmission frequency, providing true broadband speeds. Similar services from two American companies, WildBlue and HughesNet, have attracted more than a million customers.

The fastest connections available from Avanti and Eutelsat will be 10 megabits a second, which is still only a fraction of the speeds available on the fastest cable networks and fibre-to-the-home links. Satellite broadband also suffers from some other problems, like stutter-step delays because of the distance the signals need to travel to space and back. Consumers need satellite dishes and modems, which can cost several hundred euros, though in some cases the cost is subsidised by the operators.

Though Avanti and Eutelsat will work through internet service providers, rather than selling directly to consumers, Williams said he expected basic packages of his company’s service to start at about €25 a month. That is lower than prices for some of the existing, sluggish satellite services available in Europe, but still slightly higher than comparable land-based offerings.

But Eutelsat and Avanti insist that the underserved market in Europe is big enough to exhaust the capacity of the satellites they are launching now, and perhaps more. The European Commission and a number of European governments have introduced programs aimed at closing the so-called digital divide; in some countries, like Ireland, satellite broadband subscriptions are being subsidised.

The leading operator in Asia is Ipstar, owned by Thaicom in Thailand, with about 2,50,000 customers for a service that uses the lower transmission frequency, called Ku-band. Another operator, Yahsat of Abu Dhabi, has announced plans to launch a satellite operating on the higher frequency, called Ka-band, to serve parts of Asia and Africa.
Even in Europe, where regulatory issues are less of a challenge, some satellite companies are skeptical about the prospects for growth of the new Ka-band services.
Avanti says skepticism about satellite broadband had been fuelled by misinformation from cable and telecommunications companies. But, once consumers see the new technology in action perceptions will change.

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