The Network Effect, 5G and Satellite Communications
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1 The Network Effect, 5G and Satellite Communications October 2017 Bruce R. Elbert President and Principal Consultant Application Technology Strategy, L.L.C. Application Technology Strategy, LLC NE 1
2 Network Effect Network Externalities or critical mass Network externalities -- the requirement that there be a group of subscribers if communications are to occur -- play a central role in the demand for new networks. And as telecommunications evolve, new networks have increasingly taken attention. The experience to date with the Minitel information service in France serves as an informal empirical check on conclusions. With this base, the paper then draws implications for the domain appropriate to regulation and for universal service pricing under liberalization. It concludes with a speculation about the role of mixed economy, illustrated by the construction of Japanese universal service. 1 Making predictions about Network Effect An illustration: As this article was being written, commentators are speculating on whether Apple computer will survive, since its network (base of users) is shrinking, some think, below a minimum acceptable level. Since the actual quantity of Apple computers sold is still among the very largest of personal computer manufacturers which should allow Apple to take advantage of economies of scale in production, and the computers are not thought to be deficient in terms of quality, any lack of viability must be due to the fact that the network of Apple computer users is small. In other words, the synchronization value of Apple computers is thought to be too low. 2 1 David Allen, New telecommunications services: Network externalities and critical mass, S. J. Liebowitz and Stephen E. Margolis, Network Externalities (Effects), 1994 Application Technology Strategy, LLC NE 2
3 Market Value Application Technology Strategy, LLC NE 3
4 Iridium, Prior to It s Bankruptcy (August 13, 1999) $80 Iridium LLC Share Price, $ $70 $60 $50 $40 $30 $20 $10 IPO Delisted from Nasdaq $0 11-Mar Jun Sep Jan Apr Jul Nov Feb May Aug-1999 Application Technology Strategy, LLC NE 4
5 Fast Forward - FANG FANG companies lead the new industrial revolution Facebook Amazon Netflix Google What, exactly, did they build? Would they exist without Internet infrastructure? Wired Wireless Satellite How is Apple different? The same? Why did AT&T buy DIRECTV? Whither goeth Satellite Broadband? Application Technology Strategy, LLC NE 5
6 Satellite Communications in the Near Future Our industry is still split between GEO and Non-GEO GEO has the investment and customers Non-GEO has mind space, but minimum success as a business GEO moves ahead with DTH and HTS in the forefront Non-GEO has a devoted following, you either get it or you don t OneWeb is affordable 900 bent pipe satellites in LEO, with range limited by single hop links Still, there are applications that terrestrial wireless cannot provide (niche markets) Application Technology Strategy, LLC NE 6
7 Overall Satellite Spectrum (log scale) Currently for GEO 10 GHz Microwave 30 GHz Millimeter-wave Being considered Application Technology Strategy, LLC NE 7
8 Clear Air Attenuation (Space to Earth) O 2 O 2 H 2 0 Near total absorption Total attenuation toward zenith, db H 2 O A a 8a 0 2a sin w Variation of total attenuation as a function of elevation angle, >10 Frequency, GHz Propagation Effects on Satellite Systems at Frequencies Below 10 GHz, NASA Publication 1108(02) 1987 Application Technology Strategy, LLC NE 8
9 Attenuation vs. Rainfall Rate (ITU-R) Application Technology Strategy, LLC NE 9
10 Regions corresponding to the five rain-climatic zones, indicating the rain rate in mm/hour to be exceeded for 0.01% of the time [ITU-R] 75 mm/hr at 0.01% Application Technology Strategy, LLC NE 10
11 5G what it is, what it isn t 3GPP Millimeter Wave RF Front End Interface (RFFE) connected to SDR Application Technology Strategy, LLC NE 11
12 5G in NZ at 28 GHz B. A. Shaw1, H. F. Beltrán2, and K. W. Sowerby, The use of spectrum at millimetre wavelengths for cellular networks, PTC 16 Application Technology Strategy, LLC NE 12
13 4G in NZ at 1800 MHz B. A. Shaw1, H. F. Beltrán2, and K. W. Sowerby, The use of spectrum at millimetre wavelengths for cellular networks, PTC 16 Application Technology Strategy, LLC NE 13
14 Observations from NZ research... mm wavelengths for cellular use is best used where coverage is not expected to be continuous or ubiquitous, and used in areas where capacity demands cannot be met by using the UHF band. Application Technology Strategy, LLC NE 14
15 Space Multi-beam Antennas Reflector and feed (one beam per antenna) O3b Reflector and multiple feeds (multi-beam antenna) Phased array (multi-beam antenna) Application Technology Strategy, LLC NE 15
16 Cellular Backhaul and Bypass (Samsung) Farooq Khan, Samsung Electronics, Mobile Internet from the Heavens Application Technology Strategy, LLC NE 16
17 Advanced Comm Payload for LEO Farooq Khan, Samsung Electronics, Mobile Internet from the Heavens Application Technology Strategy, LLC NE 17
18 Enormous Satellite Network Effect GPS Application Technology Strategy, LLC NE 18
19 GPS, Specifically Global Positioning System or GPS is a United States spacebased radionavigation system that helps pinpoint a three dimensional position to about a meter of accuracy (for example latitude, longitude and altitude) and provide nano-second precise time anywhere on Earth. GPS is comprised of three different parts: Space Segment: A constellation of at least 24 US government satellites distributed in six orbital planes inclined 55 from the equator in a Medium Earth Orbit (MEO) at about 20,200 kilometers (12,550 miles) and circling the Earth every 12 hours. Control Segment: Stations on Earth monitoring and maintaining the GPS satellites. User Segment: Receivers that process the navigation signals from the GPS satellites and calculate position and time. Application Technology Strategy, LLC NE 19
20 Network Effect in LEO Systems Some predicted Iridium would be The Next Big Thing, but we were wrong There are two candidates: OneWeb, a bent pipe global coverage constellation for general Internet access LeoSat, an interconnected network of satellites offering specialized services Success factors (necessary conditions) Ease of use Low cost per Mbps Versatility, to allow innovative services Broad-based application domain Better QoS (but still line-of-sight) However, GEO systems are there and improving, but bandwidth comes at a price Application Technology Strategy, LLC NE 20
21 GEO Satellites and IoT DUBAI, UAE, 8 September, 2016 Leading mobile satellite services (MSS) operator Thuraya Telecommunications Company today confirmed it has finalized its next generation constellation plans, and is set to deliver a unique, multidimensional program of expansion and diversification. Unique next generation mobility offering includes an enhanced product portfolio, new advanced L-band satellites; HTS services; new wave IoT and content services, assured continuity, and expanded coverage Application Technology Strategy, LLC NE 21
22 Conclusions The next three to five years are critical to 5G and satellite communications as well. Application Technology Strategy, LLC NE 22
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