Dataquest: Satellite broadband set to surge

High-tech market analysis firm Dataquest, forecasts in a study released Thursday that the number of satellite terminals in the world's three major economic regions will increase from an installed base of 293,500 terminals last year to 7.2 million terminals in 2005. Most of these terminals are in North America now, with most of the remainder in Europe and the Asia-Pacific region.

"I think that fundamentally, we're going to see growth in all areas of broadband," said Patti Reali, a senior analyst for Dataquest. "I also think that cable and DSL isn't going to be able to reach everywhere."

While cable is the best buy per kilobit for customers in residential areas, Reali said, it may not be profitable for land-based broadband providers to lay cable or optical fibre in areas with a low population density. Satellite broadband may be the only way for folks in the middle of nowhere to get fast downloads.

"There will be a lot of parallels with adoption of digital satellite for television, like DirecTV and EchoStar, " she said. "All the early adopters were rural. It's the density per mile that counts."

Current satellite services allow customers to receive and send data at speeds similar to DSL. The StarBand Communications service touts download speeds of up to 500Kbps (kilobits per second) and uploads at 150Kbps, while Hughes Network Systems' DirecPC service promises downloads of up to 400Kbps and uploads of 125Kps.

Hardware and installation for either service is around $US600, and service charges tend to be slightly more expensive than either cable or DSL service.

Most terminals are in the consumer market, but Dataquest expects both the business and consumer markets to have similar growth rates over the next five years. By 2005, the analysts expect North America to account for 54 per cent of all satellite broadband access terminals, with Europe and the Asia-Pacific region accounting for 30 per cent and 16 per cent respectively.

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