Battle brewing for control of remaining satellite orbital resources

The fight is on for valuable orbital resources as two companies have applied for many of the same licences up for grabs under Industry Canada’s DGRB-001-06. According to documents released by the department last month, Telesat Canada and Ciel Satellite LP have submitted applications. Canadian Satellite Radio Investments Inc., which operates the XM Canada brand, had also submitted expressions of interest for 10 licences, but has since been eliminated from the licensing process by Industry Canada. The department invited CSRI to re-apply at a later date for licences left unassigned. An upcoming issue of Report on Wireless affiliate publication Canadian Communications Reports will have more on this. Telesat and Ciel are vying for 10 and nine licences, respectively, but perhaps more importantly, the two companies have found themselves locked in a heated battle to control the same six licences (see box on page 2 for list). While Telesat is touting its experience and the fact that it owns and operates satellites in many of the same locations it is applying for, Ciel is playing the competition card, noting that Industry Canada has an opportunity to provide more choice to satellite users. Both companies’ respective applications highlight that there is a growing demand for broadband Internet access and that there will be a substantial number of Canadian households unable to get high-speed services by the end of this year. According to Industry Canada, there will be upwards of 700,000 households without access to broadband facilities of any kind (see chart below). Telesat believes this figure to be conservative, as it doesn’t account for households that may be beyond broadband’s reach, even though they’re in towns and cities that provide the service to other residences. To address this growing demand, Telesat proposes to launch one satellite in each of the 91 and 118.7 degrees west orbital locations. Both birds will have significant Ka-band capacity, enabling two-way connectivity at affordable rates. They will also supplement a small Ka-band payload on the Anik F3 satellite scheduled to be in service in the middle of next year. The first of the new satellites would be launched in 2012 with the second launched the following year. The three satellites are part of Telesat’s long-term Ka-band capacity plan developed after consultations with its primary Ka-band customers, Barrett Xplore and WildBlue. As a result of those discussions, Telesat determined that significant amounts of Ka-band capacity will be needed in the future to meet demand as satellite service providers grow their businesses. Critical to the success of Telesat’s proposal hinges on the company winning the two licences in each of those two particular orbital slots (see Newsmakers column). This will allow Telesat to offer services at lower costs because each satellite will also carry a 17 GHz BSS payload that will eventually be used for next-generation broadcasting and multimedia services. But Telesat will not go uncontested in its bid to control the broadband skies high above the earth as Ciel Satellite wants the same four licences. In its application, the relatively new satellite operator notes that customers want a choice of suppliers. The company believes it "will enhance the level of competition for broadband services by partnering with a key satellite broadband distributor." Ciel also indicates that there will be considerable demand for satellite broadband services with demand outstripping supply in the not-so-distant future. "By Ciel’s estimates, demand for broadband service by satellite will exceed supply by approximately 200,000 subscribers by 2012," reads the company’s application. But Ciel notes that the market will only benefit if there is competition. "A fully competitive market for satellite services in Canada can only be achieved over the long term if priority is given in this process to the development of Ciel and other new entrants," reads the company’s application. These two licences are part of the company’s plan to launch five new satellites in total to address growing demand in the broadband market, increase capacity for direct-to-home satellite TV providers’ HD requirements and to introduce new multimedia services. Ciel plans to launch these satellites during an eight-year period from 2007 to 2014. While Telesat has the benefit of more than 35 years in the satellite operations business, Ciel is no slouch. Members of its management team are experienced in the satellite industry having held positions at Telesat, Star Choice Communications and Barrett. Initial comments on the two companies’ applications are due December 15 with reply comments due January 15. Industry Canada is expected to award the licences in the spring of 2007.

Battle brewing for control of remaining satellite orbital resources

News | December 14, 2006

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