1) The document discusses the state of broadband connectivity in the UK, including increasing coverage of both fixed and mobile broadband over time. 2) It outlines the UK government's priorities for improving connectivity further, such as expanding superfast broadband availability and introducing a universal service obligation of 10Mbps download speeds. 3) Satellite broadband is discussed as a potential option to serve customers in rural areas not reached by other technologies, though it would need to be competitively priced and better marketed to stimulate demand.

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Satellite Broadband: Where now?
Julian McGougan - Presentation to the Satellite Terminals Working Group
18th August 2016

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The UK connectivity landscape
2010 2015
Coverage of broadband at
2Mbit/s
86% c100%
Coverage of superfast
broadband – 30Mbit/s
58% 83%
3G premises coverage by all
operators
72% 88%
4G Coverage by all operators 0% 46%
3G land area coverage served
by all operators
13% 37%
Average fixed download sync
speed
7.5 Mbit/s 28 Mbit/s
Average monthly data usage
per residential connection
17GB 82GB
Average mobile monthly data
usage per SIM
0.24 GB 0.87GB

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The Government’s priorities for the future
• Superfast to ‘near universal’
• 100Mbit/s available to nearly all UK Premises
• Introduction of a 10Mbit/s Universal Service Obligation
(USO)
• Which socially beneficial services determine the
minimum downlink speed?
• Who pays for this? And how?
• 4G to 98% population coverage
• 90% geographic voice coverage
• 70% of rail passengers to have access to free WiFi
• Reducing the number of people offline to under 10%
• Getting more SMEs online

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Fixed broadband sets the pace
• 10m fibre and cable connections. BT reported that 48% of its customers
were on fibre products in Q4 2015.
• The number of superfast (>30Mbit/s) broadband connections rose by 2
million (28.7%) to 9.2 million. Just 2% of the UK has access to FTTP.
• BT plans to bring ultrafast broadband to 12 million homes and businesses
by 2020, 2million of which will be connected using fibre to the premise
(FTTP) technology.

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Speed isn’t everything, but…
…but it is what prospective customers, the media & politicians focus
on.
• Average UK fixed broadband download speed was 28.9Mbit/s in November 2015, up from
22.8Mbit/s (+26.9% YOY).
• But actual fixed broadband speeds are frequently lower than advertised speeds. 2.4 million
households are unable to receive access line speeds of 10Mbit/s.

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Mobile broadband reaches more consumers
• By the end of 2015, mobile subscriptions increased to 91.5 million, of which 39.5 million were 4G -
an increase of 15.9 million (67.3%) YOY.
• The proportion of business calls that originated on mobile networks was 56.2%.

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And mobile coverage keeps improving
• Mobile operators required to provide voice coverage across 90% of
the UK’s landmass by the end of 2017.
• Separately O2 required to provide indoor 4G connectivity to at least
98% (outdoor equivalent >99%) population by 2017.
• EE has pledged to boost their 4G coverage to 95% geographic by
2020, taking broadband to areas that don’t even have 2G.
• c15% of residential premises have no active landline.
• But mobile coverage obligations are focussed on residential
connectivity, ignoring road, rail, businesses, shopping areas,
schools.

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Mobile now offers the speed which a few years
ago only fixed could offer
Average 4G download speed measured for Ofcom in Cardiff, Edinburgh, Liverpool,
London and Norwich.
With 5G yet to come…

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5G
5G likely to be deployed 2020-22.
But will the poor returns from operating UK mobile networks
justify the necessary investment?
Additionally delivering 5G will be a significant practical challenge:
• >1 million small cells will be required to roll out 5G across the UK and
the upgrading of equipment at existing sited.
• This will require deployment on a scale not seen before in the UK.
• Many other major countries will be attempting to do the same in a
similar timeframe.
5G deployment will require:
• developing the skills and the people to roll out the infrastructure at scale
• ensuring that the equipment and other parts of the supply chain are
scaled up and prepared for the delivery challenge.

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The story of fixed & mobile broadband is that consumers
demand more data as downlink speed increases
• EE states that in 2012, their subscribers’ average monthly data usage was
400Mb/month. Now it’s 2Gb.
• What’s satellite’s?

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So what is satellite broadband’s target market?
How well could satellite compete with fixed or mobile?
• HCS is a major development. Constellations may be, too.
• Satellites/beams could be moved to address capacity
constraints.
• MEO & LEO should reduce latency.
• Monthly fee can be similar to that of 4G for similar data cap.
• But meeting current average fixed data use expensive.
• But how well is the satellite option marketed?
• Current Government voucher scheme receives only c400
requests/month. Why?

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Without trying to compete with fixed or mobile:
• Consumers who are unlikely ever to be offered broadband by
any other means
• but do they know that? Need transparency from
Government?
• Consumers who get slow and/or unreliable fixed broadband
• but they may be holding out for a “fibre answer”, even if
the fault is line length or internal wiring.
• It’s very difficult to know the true length of your line (some
cabinets have been removed). Some rural consumers
are connected (by long lines) directly to an exchange.
• Consumers who may get superfast sometime, but won’t or can’t
wait.
• Rural business use, not targeted by BDUK.
So what is satellite broadband’s target market?

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Could the Universal Service Obligation help?
• Broadband USO aims to provide a right to connectivity
with download speeds of at least 10Mbit/s.
• Useful marketing to tap into.
• 10Mbit/s is well within the capability of satellite.
• But is there a risk that the minimum speed could
be ratcheted up later?
• How much stimulated demand could be diverted to
satellite?

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Does Brexit offer an opportunity?
New Government wants to send signals that:
• They’re going to make a success of Brexit
• UK is open for business & receptive to FDI
• Arguably ensuring the UK has World-class connectivity should be
part of that
With:
• a Government more willing to be proactive
• no/less need to clear everything with Brussels
• (potentially) greater freedom on State Aids.
What could we achieve?
And what could satellite broadband deliver?