Satellite Operators Getting in Position for 4G LTE Services, Says ABI

A new report from ABI Research suggests satellite communications operators will be offering dual satellite and cellular services as a way of pitching their tents on prime 4G real estate. This will allow them to take advantage of the market once LTE services deploy. One analyst calls it "unorthodox but clever."

New satellite communications operators are planning to offer dual satellite and cellular services in North America, which will be supported by dual-mode smartphones, according to a new report from ABI Research.

These offerings, however, are thought to be a move for the operators to position themselves to take advantage of the 4G market, once LTE services are deployed, according to ABI researchers.
The operators, including TerreStar Networks and SkyTerra Communications, according to ABI, have an opportunity to act on the U.S. FCC Ancillary Terrestrial Component (ATC) Order of 2003, which allows satellite operators to offer simultaneous satellite and cellular services over licensed satellite spectrum. The spectrum, says ABI, is capable of supporting 4G cellular services in regions where dedicated spectrum is scarce.
"Taking the [satellite] market opportunity at face value, it's puzzling," said Kevin Burden, an ABI analyst, in a statement on the new report. "The likely number of public safety, law enforcement and government market adopters is not enough to support a viable, high growth market. But when you dig deeper, there appears to be a hidden agenda related to using the spectrum for 4G cellular services over the longterm."
The one hitch in this plan, explains ABI, is the ATC requires the operators to continuously offer both satellite and cellular services, creating what the researchers refer to as a "satellite tax." The ability to be settled on 4G real estate once carriers such as AT&T are ready to deploy LTE, however, is worth the expense of supporting satellite services.
"We believe that the greenfield satellite companies' plan is to forge short-term roaming partnerships with AT&T and other cellular operators and then, when LTE services are deployed, position themselves to be acquired by these major players, including their prized spectrum," said Burden in the statement. "It's unorthodox but clever."
ABI estimates that approximately three million satellite-capable LTE smartphones will be shipped in North America in 2012 - though the estimate is contingent on the 4G plans of U.S. cellular carriers.
AT&T plans to begin LTE trials in 2010 and deployments in 2011. Verizon is also at work on an LTE Innovation Center in Waltham, Mass., and announced in February that it will launch its LTE network in mid-2010.
The competing 4G technology is WiMax, which is already used widely around the world. In March, ABI forecast WiMax subscriber revenue to grow by 4,500 percent in 2009.
Despite current WiMax installations by Sprint and Clearwire in Baltimore and Portland, many analysts are expecting LTE to be the leading 4G technology in North America.
Vodafone and Verizon are already field-testing LTE networks around the United States, and manufacturers such as Nokia have chosen to support LTE over WiMax.