FAQ on Mobile Satellite Services in Europe
August 8, 2008 // Published as a news service by IHS
On Aug. 7, the European Commission (EC) launched a call for candidate operators of pan-European mobile satellite services, which will take place for the first time under a single EU-wide selection mechanism.
The new mechanism will give the communications industry the necessary confidence to invest in EU-wide services, even in previously uneconomic remote areas. It could allow companies, as of 2009, to offer innovative wireless services to consumers throughout Europe.
This document answers frequently asked questions about this development.
What is a mobile satellite service?
A mobile satellite service is a service provided by a satellite system that communicates with portable terminals on the ground, which can be mounted on a ship, airplane or car - or carried by a person.
Such systems allow high-speed communication throughout Europe between satellites and, for instance, handheld mobile terminals comparable to smart mobile phones or portable computers.
Mobile satellite services themselves can range from high-speed Internet access to mobile television or radio, plus access for public protection and disaster relief. Portable satellite telephones that allow phone calls to be made and received anywhere in the world are another example.
What are mobile satellite service systems?
Systems providing mobile satellite services use radio spectrum to provide services between a mobile earth station and one or more stations, either in space or on the ground at fixed locations.
The radio spectrum is divided into "bands," or ranges of frequencies. Systems providing mobile satellite services have been allocated the 2-GHz frequency band throughout the European Union (EU), comprising radio spectrum from 1,980 to 2,010 MHz for earth to space communications, and from 2,170 to 2,200 MHz for space to earth communications.
This allocation has been done by means of an EC decision adopted on Feb. 14, 2007 (see EC web page on radio spectrum reference documents).
Why is the European Commission involved?
Satellite communications, by their very nature, cross national borders and are thus susceptible to international or regional regulation. An efficient way of ensuring the coordinated introduction of mobile satellite systems in the EU is to organize a single selection and authorization process for operators in all member states. This includes assigning the same spectrum to operators in each member state, so that they can provide their satellite services at a pan-European level.
At present, existing regulations of the International Telecommunications Union (ITU) have only procedures for radio frequency coordination to avoid unacceptable interference between satellite systems. They do not extend to the licensing of those systems.
Therefore, the EC intervened to create a "one-stop shop" to facilitate the emergence of a single market for mobile satellite services and maximize its potential, to the benefit of businesses and consumers.
How are the market opportunities for mobile satellite services? How does Europe compare to other parts of the world?
The satellite industry is a €77 billion market worldwide, growing at 16% in 2007. The economic impact of satellite services is also growing - in 2007, they generated approximately €38 billion in revenue, which is about 60% of the global revenue of the satellite industry, and 18% more than in 2006 (Furton Corporation, 2008).
European companies represent an important force in this market, with the European space industry holding 40% of world markets for manufacturing, launching and operating satellites.
In the field of mobile satellite services, Europe has room for improvement when compared to other parts of the world. While Japanese and Korean consumers already enjoy many radio or TV programs on their mobile phones, in Europe, mobile radio or television services are not yet provided over satellite systems. This should change with the new EU-wide selection mechanism.
What has the EC done so far?
In February 2007, the EC adopted a decision reserving the 2-GHz radio frequency bands for use by systems providing mobile satellite services. However, that decision did not cover procedures for the selection and authorization of the actual operators of such systems, which was left to the relevant national authorities - see EC web page on radio spectrum reference documents.
On Aug. 22, 2007, the EC proposed to add a single EU-wide selection and authorization procedure for operators that want to offer EU-wide mobile satellite services.
The proposed measure followed extensive discussions with national spectrum experts and a public consultation that was held from March 30 to May 30, 2007 - see Public consultation on the selection and authorisation of systems providing mobile satellite services.
The EU mobile satellite services decision on this selection and authorization procedure was adopted by the European Parliament and the European Council of Ministers on June 30, 2008 and entered into force on July 5. The Aug. 8 call for candidate operators is based on this decision.
What are the next steps?
The deadline for interested companies to submit their applications to the EC is Oct. 7, 2008. The selection procedure comprises two phases.
During the first phase, the technical and commercial ability of the candidates to launch their systems in time will be assessed using five predefined milestones.
If more candidates pass the first phase than can be accommodated within the spectrum available, they will be assessed in the second selection phase against the following four selection criteria:
- Consumer and competitive benefits provided (20% weighting)
- Spectrum efficiency (20% weighting)
- Pan-EU geographic coverage (40% weighting)
- Extent to which public policy objectives, not dealt with by the other criteria, is achieved (20% weighting)
The credibility of applicants and the viability of the proposed mobile satellite systems will be taken into account throughout the process.
The process will conclude with an EC decision selecting the successful candidates. All member states will have to make sure that selected candidates have the right to operate in their country.
Depending on the number of candidates, the EC expects that the selection procedure can be completed in the first months of 2009. First satellite launches could take place in 2009, but the deadline for deployment of commercial services is 2011 at the latest.
Why do satellite operators need legal certainty from the EU to launch mobile satellite services?
The costs of producing and launching a satellite can run to hundreds of millions of euro, and satellite operators have to pay them before any revenue can be generated from the use of the satellite in question.
Investment on such a large scale can only be undertaken by relying on a stable legal environment that makes sure satellite operators will be able to offer mobile satellite services across Europe throughout the lifetime of the satellite.
Who can apply?
Any mobile satellite services operator established in the EU can apply.
Where will the services be deployed?
Services have to cover at least 60 % of the EU's territory as of the date the services commence. Coverage of all member states is required at the latest seven years after the selection decision.
In addition, the geographical coverage is one of the criteria that will be assessed in the selection process. It is obviously in the operator's interest to reach as many potential customers as possible by serving a wide an area as possible.
How many services could there be potentially?
The number of services to be provided by the selected systems is not determined at the moment. Many industry players are seriously interested in being selected to provide a number of services over the 30 MHz available for uplink and downlink, but the eventual number of selected systems will partly depend on the frequency capacity they require.
However, the selected systems themselves are generally expected to be capable of carrying a variety of mobile satellite services, depending on spectrum efficiency options and business models.
For instance, emergency communications and mobile television services can potentially sit on the same system. Besides the number of services, the potential number of users is expected to be important, as satellite systems typically have a much wider geographical coverage area than other types of communication networks.
Will the selected candidates receive a "European licence" and pay a "European licence fee"?
No. Only the selection of the operators of mobile satellite services systems will be made at the European level.
Operators will be "licensed" or "authorized" by each member state, subject to a number of harmonized authorization conditions. In other words, there is now a "European template" for decisions that continue to require implementation at the national level.
If there are fees, these will be determined nationally. Any fee must be justified, transparent, non-discriminatory and proportionate to the intended purpose.
Who will benefit?
Operators will benefit directly from economies of scale, which will result from consistent national authorizations across the EU. This consistent EU approach will encourage investment in the sector, thanks to the transparency and legal certainty offered.
Businesses and citizens will also benefit from the high-speed services that will be offered by operators, such as high-speed Internet access, mobile TV services and emergency services.
Mobile satellite systems also open up new geographical areas to services that were once considered too expensive to reach. This, in turn, should energize local economies and help close the "digital divide."
In all, the market for space and its applications is €77 billion globally. It was growing at an average annual rate of about 16% in 2007 (Furton Corporation, 2008).
When it comes to systems providing mobile satellite services, the new technological developments allowing them to be complemented by ground components are likely to increase the importance of such systems as compared to previous mobile satellite service systems.
Source: European Commission.