Mobile Satellite Services in Europe - briefing

07 August 2008
by eub2 -- last modified 08 April 2010

A competition for providers of communication services via satellite across Europe was launched on 7 August by the European Commission. Satellite operators will for the first time be able to offer services such as high speed data, mobile TV, disaster relief and remote medical services under a single European selection procedure instead of under 27 different national systems. This is made possible by a new EU decision on mobile satellite services that entered into force this July. Mobile satellite systems use radio spectrum to provide services between a mobile earth station and one or more stations either in space or on the ground at fixed locations. They have the capability to cover a large territory and reach areas where such services were economically unviable before. The new European selection procedure could allow companies to offer innovative wireless services throughout Europe over a specifically reserved spectrum as of 2009.

What is a mobile satellite service?

A mobile satellite service (MSS) is a service provided by a satellite system which communicates with portable terminals on the ground, which can be mounted on a ship, airplane, or car or carried by a person. Such systems allow high-speed communication throughout Europe between satellites and, for instance, handheld mobile terminals comparable to smart mobile phones or portable computers.

Mobile satellite services themselves can range from high-speed internet access to mobile television or radio, and public protection and disaster relief. Another well-known example is portable satellite telephones that allow phone calls to be made and received anywhere in the world.

What are mobile satellite service systems?

Systems providing mobile satellite services use radio spectrum to provide services between a mobile earth station and one or more stations either in space or on the ground at fixed locations.

The radio spectrum is divided into "bands", i.e. ranges of frequencies. Systems providing mobile satellite services have been allocated the 2 GHz frequency band throughout the European Union, comprising radio spectrum from 1980 to 2010 MHz for Earth to space communications, and from 2170 to 2200 MHz for space to Earth communications. This allocation has been done by means of a Commission Decision adopted on 14 February 2007.

Why is the European Commission involved?

Satellite communications, by their very nature, cross national borders and are thus susceptible to international or regional regulation. An efficient way of ensuring the coordinated introduction of mobile satellite systems in the EU is to organise a single selection and authorisation process of operators for all Member States. This includes assigning the same spectrum to operators in each Member State, so that they can provide their satellite services at a pan-European level.

At present, existing regulations of the International Telecommunications Union (ITU) have only procedures for radio frequency coordination to avoid unacceptable interference between satellite systems. They do not extend to the licensing of those systems.

The European Commission therefore intervened to create a "one stop shop" to facilitate the emergence of a single market for mobile satellite services and maximise its potential, to the benefit of businesses and consumers.

How are the market opportunities for mobile satellite services? How does Europe compare to other parts of the world?

The satellite industry is a €77 billion market worldwide, growing at 16% in 2007. The economic impact of satellite services is growing: in 2007 they generated approximately €38 billion in revenue which is about 60% of the global revenue of the satellite industry, and 18% more than in 2006 (Furton Corporation, 2008).

Generally speaking, European companies represent an important force on this market: the European space industry holds 40% of world markets for manufacturing, launching, and operating satellites.

In the field of mobile satellite services, Europe has room for improvements when compared to other parts of the world: while Japanese and Korean consumers already enjoy many radio or TV programmes on their mobile phones, in Europe mobile radio or television services are not yet provided over satellite systems. This should change with the new EU-wide selection mechanism.

What has the Commission done so far?

Previously the European Commission adopted in February 2007 a Decision reserving the 2 GHz radio frequency bands for use by systems providing mobile satellite services. However, that Decision did not cover procedures for the selection and authorisation of the actual operators of such systems, which was left to the relevant national authorities

On 22 August 2007 the Commission proposed to add a single EU-wide selection and authorisation procedure for operators that want to offer EU-wide mobile satellite services.

The proposed measure followed extensive discussions with national spectrum experts and a public consultation held from 30 March to 30 May 2007.

The Decision on this EU-wide selection and authorisation procedure was adopted by the European Parliament and Council on 30 June 2008 and entered into force on 5 July 2008. Today's call is based on this Decision.

What are the next steps?

The deadline for interested companies to submit their applications to the Commission is 7 October 2008.

The selection procedure comprises two phases.

During the first phase technical and commercial ability of the candidates to launch their systems in time will be assessed using five pre-defined milestones.

If more candidates pass the first phase than could be accommodated within the spectrum available, they shall be assessed in the second selection phase against the following four selection criteria: consumer and competitive benefits provided (20 % weighting), spectrum efficiency (20 % weighting), pan-EU geographic coverage (40 % weighting) and the extent to which public policy objectives, not dealt with by the other criteria, are achieved (20 % weighting).

The credibility of applicants and the viability of the proposed mobile satellite systems will be taken into account throughout the process. The procedure will be concluded by a Commission Decision selecting the successful candidates. All Member States will have to make sure that selected candidates have the right to operate in their country.

Depending on the number of candidates, the Commission expects that the selection procedure can be completed in the first months of 2009. First satellite launches could take place already in 2009 but the deadline for the deployment of commercial services is 2011 at the latest.

Why do satellite operators need legal certainty from the EU to launch mobile satellite services?

The costs of producing and launching a satellite can run to hundreds of millions of euro, and satellite operators have to pay them before any revenue can be generated from the use of the satellite in question. Investment on such a large scale can only be undertaken by relying on a stable legal environment making sure that satellite operators will be able to offer mobile satellite services across Europe throughout the life-time of the satellite.

Who can apply?

Any mobile satellite services operator established in the EU can apply.

Where will the services be deployed?

Services have to cover at least 60 % of the EU's territory as of the date the services commence. Coverage of all Member States is required at the latest seven years after the selection decision. In addition, the geographical coverage is one of the criteria that will be assessed in the selection process. It is obviously in the operator's interest to reach as many potential customers as possible by serving an area as wide as possible.

How many services could there be potentially?

The number of services to be provided by the selected systems is not determined at the moment. Many industry players are seriously interested in being selected to provide a number of services over the 30 MHz available for uplink and downlink, but the eventual number of selected systems will partly depend on the frequency capacity they require. However, the selected systems themselves are generally expected to be capable of carrying a variety of mobile satellite services depending on spectrum efficiency options and business models.

For instance, emergency communications and mobile television services can potentially sit on the same system. Besides the number of services, the potential number of users is expected to be important, as satellite systems typically have a much wider geographical coverage area than other types of communication networks.

Will the selected candidates receive a "European licence" and pay a "European licence fee"?

No. Only the selection of the operators of systems of mobile satellite services will be made at European level. Operators will be "licensed" or "authorised" by each Member State, subject to a number of harmonised authorisation conditions. In other words; there is now a "European template" for decisions that continue to require implementation at national level.

If there are fees, these will thus be determined nationally. Any fee must be justified, transparent, non-discriminatory and proportionate to the intended purpose.

Who will benefit?

Operators will benefit directly from economies of scale which will result from consistent national authorisations across the EU. It will encourage investment in the sector thanks to the transparency and legal certainty offered by this consistent EU approach.

Businesses and citizens will also benefit from the high speed services that will be offered by operators such as: high speed internet access, mobile TV services, emergency services, etc.

Mobile satellite systems also open up new geographical areas to services that were once considered too expensive to reach. This in turn, should energize local economies and help close the digital divide.
In all, the market for space and its applications is €77 billion globally. It was growing at an average annual rate of about 16% in 2007 (Furton Corporation, 2008). When it comes to systems providing mobile satellite services, the new technological developments allowing them to be complemented by ground components are likely to increase the importance of such systems as compared to previous mobile satellite service systems.

Source: European Commission