Executive Summary

The emergence of LEOSat technology has challenged established arrangements in the satellite market. This in turn has forced telcos to rethink their approach to satellite-delivered services.

There is more than one way to respond. Vocus and Optus start from different points, and they have adopted different approaches. In some ways, they represent the end points of a spectrum of possible responses.

For Vocus, the emergence of LEOSat has expanded the potential for satellite service. The desire for more service diversity is reflected in a multi-platform strategy that is highly complementary to the new global LEOSat operators. Leveraging its ground station and backhaul assets, Vocus is positioning itself as a preferred aggregator for global LEOSat operators and a one-stop shop for a range of segmented offers.

Optus faces a different problem, and has a different solution. As the satellite incumbent, it faced new competition from NBN’s SkyMuster, now turbo-charged by LEOSat. It will, of course, work with LEOSat operators too. But it must also chart a course for its satellite infrastructure business that differentiates it from LEOSat offerings. It is investing in locally-owned and controlled LEOSat and GEOSat satellite platforms that will give Optus (and local customers) more vertically-integrated control over the service. They will appeal to defence, government, and high-security corporate segments.

The overall result is a diversifying market with increasingly tailored offers designed to meet different needs. Importantly, Australia will retain a sovereign satellite communications capability that will be available to the New Zealand market as well, creating an alternative to global operators who have lower accountability to ANZ governments.