Panasonic eyes up to six custom payloads for inflight connectivity

Earlier this year Panasonic Avionics indicated that it was ready to move beyond the traditional satellite capacity purchase approach with plans to commission its own payload on a future launch. In a recent conversation with RGN, company VP of Global Communications Services David Bruner provided significant additional color, revealing that the firm is not looking to design just one such satellite but rather expects as many as six payloads will launch starting around 2019.

The new payloads are filling the role of the “XTS” coverage Panasonic has previously described. These “eXtreme Throughput Satellite” systems are expected to increase beam capacity significantly over broadbeam and even HTS spotbeam solutions, allowing ever greater capacity to an end-user terminal (aircraft, ship or otherwise).

Up until this point there was little in the way of detail on just how the service would be delivered. And we still do not know all the specifics. Vendor, operator, size and even specific locations are all still being negotiated. But there will be six, supporting all the verticals Panasonic works in with a global footprint. And they will be custom-built to Panasonic’s specifications, ensuring that the company has significant capacity where it wants it to be at a very compelling price point. Said Bruner:

We have six custom payloads, not all of those are full satellites, so how they get deployed is a combination exercise where you are looking at the permutations and ways to get all the stuff up into the sky. Some of them need to be in chronological time frame, need to be together. Others could be independent so it really just kind of varies on how does all this come into being. All have individual designs service a particular geography and need [which] we need in our global network. All of them support aero, maritime, land mobile, energy, all of our verticals.

Timing of the builds and launches, at least right now, appears to be dictated by orbital slots and frequency licensing as much as where the demand will be. The timing for Asia, in particular, has risks associated with operations in China which must be addressed to support that payload provisioning.

“We had an order to all of this that we wanted to go North America, Europe/Middle East and then Asia. Then these other three payloads really focused on ocean areas,” explained Bruner. “That could get adjusted based on the economics of getting a deal done and orbital slots and frequency rights and things in different regions and so that kind of governs it. But they are all going to happen so close to each other the order doesn’t really matter.”

Of course, once the company starts to design its own satellite options there are questions about the existing offerings and contracts as well as the future “generic” offerings being built. Bruner was quick to point out that Panasonic will continue to need those services as it depends on “layering” of coverage to achieve the necessary density of capacity in certain high-traffic regions.

[It] does not mean that we are not going to do other deals; it just means there are some specific payloads where we have a business case that says we need a large amount of capacity in certain regions and ones in which we’ll go for a longer term commitment on that asset but we are still going to do lots of other stuff in different geographies where we need capacity. So far every decision we have ever made we have outgrown before it got launched and so that is a good thing to have happen. It tells us certain things about the marketplace. One of the bad things about owning your own payload is you are locked into it for a long time. But we are still very much in a layering or stacking kind of mentality that says ‘It is not a new thing that replaces everything you had before, you just layer on top of this and you keep layering more and more capacity’, and then you start tuning it to the type of application.

Finally, Bruner sees this type of move – a massive investment in capacity and technology – as a necessary step to support a growth rate and global demand footprint that Panasonic has built an order book for.

kontron newest“Some of the bigger deals are the ones that it will occur over the next year where there are big commitments made in capacity and those are the ones that we think really are going to start to separate the marketplace and kind of force some actions to take place,” he said.

The company has roughly 1,300 commercial aircraft equipped with connectivity today and another 2,200 orders for Ku-band service in its backlog. That represents significant pending demand and meeting it requires a major investment of resources.

Reading between the lines of Bruner’s final statement, it’s clear that deep pockets will be needed to build up sufficient capacity and drive down the per-byte price of Ku thanks to the larger scale operation; there is risk around providers hitting a wall before they can secure that capacity and then realize revenue from customers to pay off the initial investment and turn a profit.

A 2015 map from PAC showed the company’s planned XTS coverage in black. Now the firm is eyeing a 2019 launch with further oceanic coverage also expected.