[Via Satellite 10-21-2015] U.K.-based telecommunications network operator Talia is waiting before making any new purchases of satellite capacity due to instability in pricing. Alan Afrasiab, CEO of Talia, told Via Satellite that the emergence of competitive regional operators and the advent of High Throughput Satellite (HTS) systems are causing fluctuations in capacity pricing, which is resulting in uncertainty in the market.
“It is becoming a price war among satellite operators,” Afrasiab explained. “We are stepping back and not making any decision because we don’t know where the bottom price is. I think in the next six months we will reach the bottom and that will create stability. At the moment it is unstable, and it’s bad for everybody. It’s bad for satellite operators and bad for network operators like ourselves. We cannot make decisions to buy additional capacity or even renew capacity because we don’t know when the bottom price will be reached.”
Talia provides communications across the Americas, Europe, Africa and parts of Asia from a variety of satellite operators. The company also provides terrestrial communications. Afrasiab said Talia recently purchased additional capacity, but the company is taking a more cautious approach going forward. In the past, Talia would purchase capacity on satellites before they launched, but now the company is only buying as needed.
HTS and Ka-band are two big influencers of price today, according to the CEO. Afrasiab said HTS is pushing prices down, and putting pressure on traditional Ku-band pricing, though he emphasized that each has its own market niche. These technologies may help bring prices down, but he does not expect them to be a panacea. Afrasiab said the satellite business is facing headwinds currently, with terrestrial communications leaching away demand. This is influencing Talia to provide communications across multiple technologies.
“The market, in my opinion, if you are just talking about satellite, has been challenging. For us, the key success of what we have is we moved a few years back to try and develop a hybrid network. The hybrid network is the only way in the current market you can provide services to your clients if they need it,” he said.
Talia has formed a hybrid satellite-terrestrial network by establishing a series of Points of Presence (PoPs) around the world and creating a Multi-Protocol Label Switching (MPLS) network with partners such as Level 3. Afrasiab described a hybrid network as a must-have in the current market, especially given the increased pressure for network operators to function as solutions providers rather than mere conduits for bandwidth.
“We are investing in a combination of more infrastructure expansion in terms of terrestrial and the hybrid network so we can be a true network provider not only for satellite. It is important for the survival of any network operators today, in my opinion, and we have a very strict or extensive plan for expanding that network, so hopefully we will be one of the large players in that field,” said Afrasiab.
He added Talia is considering HTS capacity, and is currently holding discussions with satellite operators, but the company will center the use of HTS capacity on specific applications in select markets.
Talia serves a variety of markets, including enterprise, energy, broadcast and government, and is considering entering into maritime. The company recently purchased Newtec Dialog and is in the process of installing and testing the system. Afrasiab said Talia is using Newtec Dialog to bring down the price per megabit, and is considering implementing the system over all of its networks.
Talia is continuing to make infrastructure investments, and looking to expand to more regions. Last year, the company expanded to the United States, where a key market is the oil and gas industry. Afrasiab said the dropping oil prices are creating opportunity for smaller players and new entrants to win contracts as energy companies look to cut costs.
Earlier this year Talia joined the World Teleport Association’s (WTA) teleport certification program aimed at improving teleport functions and creating uniform standards for service. Afrasiab said Talia has also received licenses to build new teleports and data centers that will be announced soon. Additionally, Talia teamed up with the Global VSAT Forum (GVF) to launch a VSAT training division called Talia Academy. Afrasiab expressed optimism that capacity prices stabilizing at a lower level will translate into new business.
“I think big satellite operators now realize the market needs lower prices, especially on Ku-band, simply because of the Ka-band prices and also some of the smaller operators that have been quite aggressive,” he said. “If they start listening to that market, I believe this will push the demand up. We are getting cheaper prices and we bought more capacity rather than losing some. So in my opinion, though the satellite industry overall has less demand, if the price is right, there are still sales to be made.”