How satellite connectivity can combat the digital divideApril 22, 2021
Improvements to the UK’s digital infrastructure have never been more important. As businesses and consumers continue to adapt to the Covid-19 pandemic and the UK enters a new era outside the EU, high-quality broadband connectivity is vital to economic growth and social cohesion. Gigabit Britain is already taking shape, supported by ongoing modernisation of fixed and mobile networks.
Yet a digital divide remains pronounced. Users in remote areas lack access to the fastest speeds and existing gigabit policies are unable to guarantee network roll-out in all sparsely populated areas. Looking ahead, a range of connectivity options will be essential to plugging this gap and increasing digital inclusion.
With this in mind, satellite-based broadband has a critical role to play in increasing the reach and resilience of connectivity to improve access to the online world.
EY’s latest research underlines that satellite connectivity is now a credible alternative for demanding customers, whether consumers or businesses. There are various actions operators can take to help combat the digital divide and unlock long-term value.
Many customers view satellite as a viable primary connection. Our latest research shows that both consumers and small and medium-sized enterprises (SMEs) are responsive to satellite broadband offers: 40% of households would be interested in taking a satellite package if it offered greater reliability than what they already have. At the same time, 33% of SMEs nationwide would be open to considering satellite broadband as a primary connection – if full-fibre broadband was not available at their business site.
This consistency of interest across consumers and enterprises underlines the breadth of the market for satellite services. While full-fibre and 5G mobile are fuelling a new generation of digital infrastructure, the role of satellite cannot be ignored.
Satellite has a key role to play in combating network outages. Back-up connectivity is much more than a nice-to-have. Nearly one-third (30%) of households would be prepared to pay more for their broadband package if it offered back-up connectivity in case of network outages. This appetite comes at a time when resilient connectivity is more important than ever.
Our research also tells us that households tend to value reliable connectivity over the speed of the connection. Meanwhile, 31% of SMEs are keen to explore satellite broadband as a back-up connection in case of network outages. Businesses in both urban and rural locations outscore compared to the market at large (including those located in suburban areas and business parks), with 34% and 33% citing interest, respectively. Ultimately, satellite connectivity can play a key role in combating the downsides of network outages wherever customers are located.
In EY’s most recent survey of large UK enterprises, three-fifths (60%) across industries were either currently investing or planning to invest in the internet of things (IoT). At present, cellular technologies – from 5G to low-power wide-area (LPWA) networks – and fixed-line dominate the IoT landscape. Yet, use cases from remote infrastructure control to marine and coastal IoT could all benefit from the ubiquitous connectivity offered through satellites.
Satellite’s potential role in the IoT technology mix should be top of mind for fixed-line and mobile operators looking to in-fill coverage gaps and unlock new use cases. For satellite operators themselves, distinct IoT use cases provide scope to deepen their relationships with enterprises in different industries and broaden existing offerings to aviation and maritime segments.
New alliances can help all service providers take advantage of satellite connectivity. Given satellite’s growing role as a tool to narrow the digital divide, act as a back-up connection or become part of the IoT business case, it is vital for operators to think how best to tap into its capabilities. In EY’s most recent telecoms industry survey, channel partnerships, horizontal and vertical partnerships all feature prominently as key inorganic growth strategies.
In this light, dialogue, discussion and collaboration between satellite connectivity providers and their fixed and mobile counterparts can help meet a growing number of strategic imperatives – from increasing customer stickiness to unlocking new IoT propositions and improving the back-haul economics. There is also plenty of scope for direct collaboration with industry verticals themselves in order to create new IoT use cases.
Positive customer perceptions are critical. Satellite connectivity’s reach is unparalleled – and there are already encouraging signs that both consumers and businesses are receptive to what it can offer. Yet many end-users still lack awareness of what it can provide, not only in terms of “always on” availability, but in terms of costs and customer service, too.
As service providers look to bring satellite connectivity options into their service portfolios, a relentless focus on customer experience is essential. Easy-to-use products and services, clear and compelling pricing, and simple installation processes are all vital, particularly if satellite options are made available through a partner ecosystem or as part of an integrated bundle of services. The customer journey – for consumer and business alike – needs to be simple and agile if satellite services are to maximise the critical role they can play.
Ultimately, satellite connectivity is well positioned to take a central role in industry ecosystems designed to improve access to the online world and increase the reach and resilience of connectivity. There is a real opportunity for operators to explore the range of connectivity options to plug this gap and increase digital inclusion.
(Adrian Baschnonga, lead telecommunications analyst, EY Global, contributed to this article.)