The CEO of UK ISP Europasat (Satellite Solutions Worldwide), Andrew Walwyn, has told ISPreview.co.uk in our latest interview that the Government’s plan to introduce a 10Mbps Universal Service Obligation (USO) for broadband “cannot be satisfied” without subsidised Satellite technology.
As an ISP Europasat, which has its HQ in the United Kingdom and is listed on the London AIM market, was first founded in 2008 and has since become the largest pan-European Satellite broadband distributor with customers in 30 countries (mostly European markets); they’ve also just become the biggest one in Britain.
Unlike most such providers, Europasat offers a selection of packages using three physically separate Satellite platforms (spacecraft in orbit around the Earth) from Avanti, SES and Tooway (Eutelsat). However much of their recent growth has been built through the acquisition of rivals, such as the move to gobble Avonline for £10m (here).
Today the provider is home to 17,000 subscribers in the UK, with an overall total of 75,500 across all of their markets and they hope to reach 100,000 homes by the end of 2017. Suffice to say that Europasat has a unique insight into how Satellite technology could help to achieve the Government’s various broadband targets.
On the other hand many are wary about the pitfalls of such technology, which can suffer from extremely slow latency (bad for fast-paced multiplayer games and certain other online services), limited / expensive usage allowances and poor performance due to capacity constraints; the latter isn’t easy to fix (it can take years and lots of money to launch a new Satellite).
The inherent problems with the service may partly help to explain why the Government’s £60m rural subsidy scheme (here), which has been aimed at around 300,000 UK premises that can’t get even a basic 2Mbps connection, is struggling to take-off. The latest official data from June 2016 suggests that around 4,555 applications have been approved, with only 783 vouchers being redeemed for a total spend of £274,050.
Naturally we wanted to know more about this and what the future held for Satellite. Happily the CEO of Europasat, Andrew Walwyn, has been able to engage with us and the good news is that ultrafast (100Mbps) capable services and possibly even “unlimited” usage allowances should be coming, albeit in the next few years.
This is important because it’s possible that Satellite might just end up being one of the only economically viable ways for the Government to reach those in the most remote locations, unless the investment is found to deliver something better.
NOTE: Andrew Walwyn started his career on the shop floor in Carphone Warehouse, before rising up the ranks to head up the sales channel. Later he moved onto DX Communications as their Sales Director and shareholder, where he helped grow the retail channel from a few outlets to over 200. DX was bought out by BT Cellnet (now called O2) and formed the basis of their current store footprint. After that co-founded Satellite Solutions Worldwide (SSW) in November 2008 and has led the company through significant global expansion, including its AIM listing last May.
1. As an ISP Europasat appears to be quite well positioned in the UK market, not least because you give consumers the ability to choose a service from several physically different Satellite platforms. Can you tell us about the Satellite platforms that you use (SES, Avanti etc.) and what are the key differences?
Europasat is the only pan European, independent satellite broadband ISP. It offers branded satellite broadband tariffs for all the leading European networks providers including; Avanti, SES and Tooway. As the providers have different but often overlapping, coverage areas, we provide an expert one-stop shop to get what’s right for customers depending on their location.
In addition, each network has a range of tariffs with different speeds, data allowances and price points, so being able to offer all three enables us to tailor most precisely the best solution for that customer’s specific usage. In this way we can deliver both better service and value for money to our customers.
2. Satellite providers appear to have benefited from the Government’s new Universal Service Commitment (USC) subsidy, which offers vouchers worth around £350 to help cover the cost of having a new satellite or fixed wireless broadband service installed.
The scheme itself is aimed at around 300,000 UK premises that are currently unable to receive a basic broadband speed of 2Mbps, which are also areas that probably won’t benefit from a “fibre broadband” upgrade via the Government’s Broadband Delivery UK programme.
How much of an impact has this scheme had on your ISP and has it proven to be a significant catalyst for growth?
There are currently four subsidised schemes running across the UK – the Welsh Broadband Cymru Voucher Scheme, the Better Broadband national scheme, the Better Rural Broadband (BDUK) Funding Pilot and standalone county pilot schemes. The Welsh scheme is going well – it has been well publicised and the process is simple.
The take-up on the BDUK National Scheme has been much lower – but its recent restructure has increased uptake with over 1,500 orders since that date – we’re happier with that and look forward to significant growth through the Autumn.
3. Speaking of the subsidy, you’ve previously complained that the scheme suffered from a “very complicated” customer ordering process and “isn’t generous” enough. Can you offer a bit more detail on those complaints and tell us if, to your knowledge, anything has been done to improve the scheme in respect to those criticisms and what other enhancements you’d ideally like to see?
We felt that the BDUK scheme had three fundamental issues:
· The process and customer journey was too complex because of BT’s involvement in the supply chain.
· For Local Authorities there was a potential conflict of interest in terms of funding as the £350 Broadband for All subsidy was drawn from the Local Authority’s existing broadband budget. Arguably this wasn’t a great incentive to drive Local Authority engagement in the scheme, as it would reduce funds available for fibre deployment.
· There was a lack of general awareness of the scheme amongst the target population.
From 1st June changes were made to the BDUK scheme to rectify these problems and stimulate uptake of the offer to deliver better broadband to target communities.
Firstly, BT are no longer involved and so the market can operate as normal for a satellite broadband sale. Also, BDUK now have their own budget allocated by the Treasury, which means that the £350 per customer is subsidised wholly by them.
Lastly, BDUK have advised that they will soon have better data available on addresses that are eligible – this still requires joined-up approach between Local Authorities and service providers such as Europasat to ensure that potential customers who can benefit are fully aware, but is a very positive step in the right direction and we are pleased that the team at BDUK have been so receptive to our feedback.
4. The Government has also proposed a new 10Mbps Universal Service Obligation, which is likely to focus most of its effort upon the final 3% of UK premises that won’t be covered by a superfast broadband network via the Broadband Delivery UK programme.
At present it’s not known what sort of technology and performance criteria (e.g. latency, upload speeds, affordability, usage allowances etc.) will be set for the USO. But if you could design the USO, what criteria would you set to ensure that a good quality connection is constantly maintained for all of those covered by it?
We have always actively encouraged the development of a clear USO, as we know it is unfeasible and cannot be satisfied without satellite technology. Our frustration has always been a lack of clarity over the USO – across Europe we have seen incumbent large telecoms providers and, to an extent, governments significantly over-promising the speed and scale of fibre deployment, rather than giving people who live in rural communities the information they need, with the options that are readily available to them.
The USO should be clear – subsidised satellite broadband or wireless broadband for any business and consumer that does not have access to FTTP or FTTH broadband, that way everyone will have access to at least 30Mbps broadband speeds.
5. Last year we recall that Europasat were promising to launch a new 50Mbps service by the end of 2016. Can you tell us anything more about this, as well as how much faster we can expect Satellite broadband to become over the next couple of years and exactly how all this will be achieved?
There is virtually unlimited satellite capacity in the sky, but obviously we have to take commercial decisions on how we productise that. We can certainly support 50 Mb/s services now and do for Enterprise customers, but to commercialise consumer services at these speeds would currently make them look expensive and would mean larger, more expensive consumer kit. We feel our 30 Mb/s products offer a good balance for consumers in terms of cost against performance, and they qualify for ‘super-fast’ status.
The next generation of high throughput satellites currently in build and launching over the next three to four years will be so much more technically efficient. They’ll be able to deliver something like three to five times the efficiency in terms of capex cost per bit of data passed over the network, and therefore we can clearly see a product roadmap where it will be normal for our off-the-shelf consumer tariffs to deliver 100 Mb/s speeds, with virtually unlimited data plans even on ordinary consumer tariffs.