Satellite dominates cellular backhaul, says new study

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A specially commissioned annexe study for Balancing Act’s African Satellite Markets shows that some 29 out of 55 African countries and territories get more than 80% of their total international Internet bandwidth by satellite, and many fixed and mobile operators in the region are also dependent on satellite for their domestic communications as well.

A large and increasing amount of the satellite capacity above Africa is being used for cellular backhaul, to provide mobile operators with the transmission capacity to connect switches (MSC) to base stations (BTS) beyond the reach of their terrestrial networks. Nearly a quarter of the total GSM coverage in sub-Saharan Africa as at December 2005 was served by transmission provided by satellite. Both satellite operators and service providers report that cellular backhaul is currently one of the fastest growing markets for satellite bandwidth. Over the last five years, the satellite-based cellular backhaul in sub-Saharan Africa has grown by a CAGR of 133.9% from an estimated 15.3 Mbps by the end of 2000 to an estimated 1,067.81 Mbps by the end of 2005.

Growth in the market for cellular backhaul services provided by satellite is being driven as a result of the rapid roll-out by mobile operators of coverage to secondary urban and rural areas beyond the reach of terrestrial networks. Mobile operators often have to build transmission networks spanning large distances over challenging terrain in order to reach major towns or cities, and in addition often also have to build their own transmission and associated infrastructure such as power and roads to service base stations.

Base stations are often deployed which connected by VSAT, then as the microwave network being built by the operator catches up, VSATs are then moved to new base stations and so on in a leap-frog fashion. VSAT is used to connect base stations in remote or hard to reach locations, where satellite-based backhaul remains the most practical and economically feasible means of connecting cell sites to the MSC. Safaricom in Kenya for example has deployed base stations at lodges in the Masai Mara game reserve, hundreds of miles beyond the reach of its transmission network. 

It is extremely difficult to quantify the size of the worldwide market for satellite-based cellular backhaul. Intelsat said in December 2005 that it provided cellular backhaul services either directly or through service providers including Gateway Communications to more than 60 mobile operators worldwide. Intelsat has notably won contracts with Vodacom to supply cellular backhaul to its operations in DRC, Tanzania and Mozambique on the IS-904 satellite, with Vee Networks (now Celtel Nigeria) to provide nine 36-MHz transponders, and with Millicom Chad to provide domestic backhaul on the IS-702 satellite.

This specially commissioned study by Gateway Communications will be sent free to all subscribers to Balancing Act’s News Update early next week. It includes detailed figures and a map identifying exactly where satellite backhaul is being used by mobile operators.