Final Report for Department for Business, Innovation and Skills and Department for Culture, Media and Sport
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- Economic welfare values
- Producer surplus
Satellite linksBesides DTH satellite TV (discussed in Section 4.3 above), other major commercial uses of satellite links in the UK include: satellite navigation specialist connectivity services to businesses broadband services in rural areas mobile satellite voice and data services to ships and aircraft satellite M2M services (including asset tracking). The use of satellites for other purposes such as meteorology, earth observation and sensing is considered separately in Section 8.2.5. Satellite spectrum bands are conventionally referred to using a somewhat arcane system of one- and two-letter abbreviations rather than their actual frequencies. Navigation satellites, such as the American global positioning system (GPS) and the forthcoming European Galileo system, operate using a number of very narrow frequency bands within the L band (1–2GHz). The main spectrum used for commercial fixed satellite services in the UK is in the Ku band (around 10–12GHz), but rural broadband services are increasingly being provided using higher-frequency spectrum in the Ka band (26.5–40GHz). Today, commercial mobile satellite services are mostly provided in the L band (around 1.5GHz), although in future they are expected to be provided in the Ka band and possibly the S band (around 2GHz). Most satellite services route traffic from the user’s terminal to some form of central gateway hub which is connected to the internet or other fixed telecoms links. The feeder links between the gateway and the satellite operate at different frequencies from the service links in order to avoid interference, and may operate in a completely different band. Satellite links used to provide specialist connectivity to businesses are often referred to as very small aperture terminal (VSAT)53 services. VSAT is clearly a useful technology for locations where terrestrial alternatives are not available (e.g. on oil and gas platforms in the North Sea) but even in urban areas it can also be cost effective for the reliable transmission of relatively small amounts of data: the largest VSAT network in the UK is in fact used to connect thousands of terminals in retail premises to The National Lottery’s data centres. The provision of satellite broadband links to remote locations is a form of VSAT service, but is usually considered as a separate application since it is more consumer-focused. Until recently, satellite broadband links were mostly provided using ‘spare’ Ku-band capacity on DTH broadcast satellites, but in 2011 Avanti (a recent UK-based entrant to the satellite sector, listed on AIM) and Eutelsat started offering broadband services in the UK on dedicated high-capacity Ka-band satellites which they launched at the end of 2010. The cost per bit on this new generation of satellites is much lower than on Ku-band DTH broadcast satellites, and this is expected to result in lower end-user tariffs, leading to higher take-up. Satellite links are also used extensively for news gathering (i.e. to provide links from temporary outside broadcast locations to TV studios). Inmarsat is the largest provider of mobile satellite services in the world and is headquartered in London and listed on the London Stock Exchange. Under the International Maritime Organization’s International Convention for the Safety of Life at Sea, virtually all passenger vessels and all cargo ships over 300 gross tonnage on international voyages are obliged to fit a Global Maritime Distress and Safety System (GMDSS), which in practice means an Inmarsat satellite terminal. Inmarsat services also support safety communications used by most of the world’s leading airlines. The company also provides a variety of satellite services for non-safety applications to maritime, aeronautical and land-based users all over the world. In 2011, Inmarsat reported revenue of USD1.409 billion (equivalent to £879 million at the average exchange rate for 2011).
Economic welfare valuesConsumer surplusFigure 6 .38 shows the consumer surplus generated by satellite links. We estimate a value of £3.0 billion for 2011, which is 6% higher in nominal terms that that calculated in the 2006 study but 11% lower in real terms. The reduction in real terms can be trace to a 16% reduction in the number of recorded satellite links. However, there have been changes in the way that satellite links have been licensed since 2006, meaning that not all links are now recorded. Figure 6.38: Consumer surplus from satellite links [Source: Analysys Mason, 2012] 
Producer surplusHowever, producer surplus has increased from minus £5 million to £580 million (see Figure 6 .39 below), mainly due to the improved profitability of Inmarsat. Figure 6.39: Producer surplus from satellite links [Source: Analysys Mason, 2012] 
NPVFinally, we have calculated the NPV of satellite connectivity over the period from 2012–2021 for our base case. Our results suggest that the direct economic welfare of satellite links is likely to have an NPV of £31.3 billion over the next ten years (see Figure 6 .40).
Further details of the modelling methodology and assumptions for calculating the direct economic welfare from satellite communications can be found in Annex B. Directory: government -> uploads -> system -> uploads -> attachment data -> file file -> Voluntary and mandatory surrenders 2013 file -> Tensions in Sino-Japanese Relations in 2012 and 2013: Plus ça change? file -> Review of Gaming Machine Stake and Prize Limits file -> E-bulk rb system Test Plan commercial contents file -> Consular section file -> Documents that can be used as proof of address and identity file -> Positive for Youth Discussion Paper June 2011 Capital infrastructure to support services for young people file -> Open Source Software Options for Government Version 0, April 2012 Aim file -> Aviation House 125 Kingsway Download 2.13 Mb. Share with your friends:
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