Very Low Cost Satellite Interactive Services - Analysys

Status date

The objective of this study is to examine the feasibility of very low cost satellite interactive services. To meet this objective, the study will look into the market and technical requirements for the development of a low cost two-way satellite system for interactive services.

The European Space Agency wishes to understand the market potential for such services and the possible technical solutions for the system.

The European Space Agency is also interested in the cost of the leading solutions and the requirements of the market in terms of how much users are willing to pay for equipment and services, and the prices that service providers need to charge in order to make their business model profitable.


The most critical issue in this market research lies in the potential for a gap to open up between latent market demand and the willingness of DTH operators to provide new equipment and incur the costs of another upgrade cycle. This is particularly the case given current financing constraints and the fact that the conversion to digital has only just been completed in many countries. Even more problematic, from the perspective of many operators, is that the revenue potential of new interactive applications has still to be proven.

This potential gap leads to a high level of uncertainty in the projections for evolution of demand, highlighting the importance of considering in detail the key influencing factors for market evolution and the potential for variation between countries and operators, especially in view of differences in consumers' cultural preferences.

Finally, the feasible business cases for successful service deployment also depend on individual operators' actions, as these operators are in different stages of their equipment upgrade/replacement cycles.


Very low cost satellite interactive services are expected to have several benefits.

From the end user's point of view:

  • overcome the difficult issue of the set top box wiring to the telephone line (PSTN) (due to the distance from the TV set to the PSTN plug)

  • the availability of the telephone line would not be diminished for a multi-person household by the use of an interactive TV application (i.e. simultaneous calling and usage of interactive TV services is possible)

  • the satellite return link would provide an "always on" connection.

From the platform operators' point of view, very low cost satellite interactive services will:

  • generate additional revenue streams, particularly where many set top boxes are not connected to the PSTN

  • reduce costs bypassing the telecoms charges currently incurred when end users use a PSTN return channel for interactivity

  • reduce churn, therefore generating revenues indirectly.

Additionally, many applications could benefit from a low bit rate return channel that could be derived from such system, enabling very basic interactive services.




This project is divided into the following four main tasks:

Task 1 Service demand and requirements

This task consists of two main sub-tasks:

  • Market demand and commercial requirements for low cost low rate satellite interactive services

  • Services technical requirements.

Task 2 System definition

This task consists of two main sub-tasks. We take into account the services demand and requirements from Task 1, investigate the potential solutions for and make recommendations on:

  • Satellite system architecture(s)

  • Low rate satellite return link air interface.

Task 3 Consumer terminal specification and cost breakdown

This task consists of three main sub-tasks:

  • Detailed technical specification of the consumer terminal

  • Low cost implementation solutions

  • Detailed terminal cost breakdown

Task 4 Assessment of the 'cost of ownership'

  • In this task we validate the cost of ownership analyses in the previous Tasks, and develop feasible business case scenarios for deployment of the proposed solution.
Current status

Work on this project started with a kick-off meeting on April 23 2002.

The project is reaching its end, having finalised Tasks 1 and 2 and being in the very last stages of Tasks 3 and 4.