Panasonic Avionics is anchor tenant on the recently launched Intelsat 29e, the first of Intelsat’s Epic generation of satellites which will provide a big increase in available Ku-band capacity in the Americas and across the North Atlantic. The inflight entertainment and connectivity provider also recently announced its “highest bandwidth commitment to date of high-powered HTS spot beam and wide beam Ku-band capacity” in conjunction with SES and the planned launches of SES-14 and SES-15 in 2017, which will give it more capacity per spot than Intelsat 29e.
But that’s nothing compared to what Panasonic expects to have in service by the end of the decade.
The company will continue to lease capacity on public satellites but it is also commissioning its own, dedicated custom payload on a new satellite. Vice President of Global Communications Services David Bruner explained the motivation for this move to RGN. Not surprisingly, it is all about realizing sufficient capacity at the best possible price.
What we see in each one of these kind of steps is about a six to ten times increase in capacity, and we expect this next step to be quite bigger than that, primarily because the economics will favor us going toward more capacity. Probably more than we need the day the satellite goes into service, but you need it to be there and grow with you for more than ten years. You invest more up front and get more capacity, and then grow into it.
The idea of buying significantly more capacity than required – something ViaSat is doing – is a notable course shift for Panasonic, as is the timeline commitment associated with such an investment. The company’s historical interest in satellites has been that “when a new satellite goes into service, we want it to have at least three years where it’s got room to grow, and then you are overlaying or adding to it, additional capacity.” The new, dedicated satellite will require a longer-term commitment but Bruner is confident that the current demand trajectory and expected growth support that commitment, saying, “This thing is going to go probably at least five or maybe even six years before it would be full. We try to design them such that you fill them up and you add more to it.”
That longer headway towards filling the available capacity put Panasonic in a position where it might even be able to get ahead of the demand curve airlines and consumers are placing on the satellite infrastructure, though Bruner acknowledges any such advance will be short-lived as demand continues to grow. “Here, this is maybe a bigger step function and thus have more headroom in it to last longer.”
Part of filling that capacity comes from the backlog of installs Panasonic has pending on aircraft around the world. But that’s not the only avenue it is pursuing. As Bruner explains, “We’ve gone from being [solely] an aero-operator and, in order to get to the most efficient scale, we’ve added in energy and mining into our portfolio, and we’re expanding maritime dramatically this year. All of those together drive a business case that is very effective and requires us to have a lot more capacity; it allows us to find more efficient solutions.”
The decision to commission its own payload brings Panasonic closer to the Inmarsat or ViaSat business model, acting as both the wholesale and retail operator of the hardware. It will still not be directly operating the satellite so it is not a full shift, but it does blur the lines between the different types of companies and what they are providing in terms of services.
There are still a number of design and procurement decisions to be made by Panasonic. The company has not chosen the satellite vendor, the size of the bus, the orbital position, or even whether Panasonic will be the only payload on the hardware. But the decision to get into the satellite business directly is a significant shift in the capacity game, one which will see a significant boost for Panasonic’s inflight connectivity customers at the end of the decade.