Will LTE be threatened by new satellite broadband offers?

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LTE is being positioned by some European operators as a substitute for fixed ADSL services. The obvious advantage of LTE is its ability to provide coverage for rural areas that are unlikely ever to see high-speed fibre in their neighbourhood.

However, the motivation for operators to deploy LTE to these sparsely populated areas is questionable, unless forced by the local regulator. Certainly, the return on LTE infrastructure capital expenditures will see them focus on city centres and built-up areas to appease their hungry shareholders.

Latest estimates put the number of households in Europe that cannot access broadband services as high as 10 million, rising to 30 million if Central and Eastern Europe is included.

The UK telecoms regulator Ofcom adds that around 10 per cent of those connected to broadband cannot achieve speeds of more than 2 Mbps.

However, salvation might be at hand for these countryside dwellers in the form of a new satellite service from Eutelsat.

The company has announced consumer packages offering download speeds up to 20 Mbps with upload rates of 4 Mbps to 6 Mbps, making it the fastest satellite packages available in Europe, according to Eutelsat.

The Paris-based company claims that its new Tooway service offers the fastest satellite-based consumer broadband speeds in Europe, and as a bonus includes unlimited 24-hour data downloads. This unlimited download offer, however, is only available to those that subscribe to the 20 Mbps service, the only other option being a lower-cost 2 Mbps service.

Monthly pricing for the Tooway service ranges from €20 up to €50 depending on the download speed and data bundle selected. This is expensive compared with fibre and LTE, but significantly cheaper than previous satellite broadband services, maintains Eutelsat.

The company will sell the service across Europe using a distribution network of resellers with the aim of them packaging it to include TV, high-speed Internet and voice in a single bundle.

While satellite-based services (of the none-TV nature) have not been accepted readily by European users, unlike in the United States, the opportunity exists for the distributors of the Eutelsat service to disrupt fixed and wireless broadband providers if they can create attractive services packages for consumers.

What impact this might have on the deployment of LTE into low-population areas is unclear. Presently, LTE service providers are ramping up their tariffs under the "premium" banner. This will be short-lived as the fight for market share gets underway.

LTE pricing can only migrate downward, which will leave satellite broadband services feeding on those that have remained historically underserved.--Paul