Commercial satellite constellation projects have come a very long way since the early versions of Iridium and Globalstar, not to mention Teledesic, ICO and others, all of which were held back or undermined by technical or financial issues.
Firstly, setup costs have plummeted, which is not too surprising given that more than a quarter of a century has passed since the first call was made on the original Iridium service. Technology has, inevitably, improved. High throughput satellites (HTS), much smaller components, mass-produced satellites, enhanced spectrum efficiency, improved antennas, partially reusable launch systems and more have brought down market entry costs and made commercial satellite communications a business with a better and quicker RoI for both service providers and users.
One major development is the growth of Low Earth Orbit (LEO) systems. Put very simply, these are small satellites, in large constellations with orbits that are closer to the Earth than traditional GEO orbits – that can offer broadband-like services with less latency than satellites in higher orbits.
But setup and launch costs are still far from negligible. LEO coverage is more limited than that of satellites in higher orbits, so guaranteeing signals almost anywhere means launching an enormous number of satellites. Also, the time connected to one satellite can be just a few minutes so rapid, seamless handover to the next satellite is essential.
And satellite internet services are still not foolproof: they can face challenges related to weather interference, limited capacity during peak times, and the need for clear line-of-sight for optimal performance. There may also be debates over spectrum use where there is competition for this resource.
But we do know that the commercial LEO satcoms market is growing. That’s because spacecraft manufacturer, launch service provider and satellite communications company SpaceX has already gone a long way towards proving it.
SpaceX started launching satellites for its constellation and internet service Starlink in 2019 and, to date, has put over 6,000 mass-produced small satellites into low Earth orbit that communicate with gateways and end user terminals.
Low latency, faster broadband and cheaper production are good news for end users in remote areas, a major target market for LEO satcoms. Also, Starlink is, or will be, facing competition from other satcoms companies, like Eutelsat OneWeb, Amazon’s Project Kuiper, Lynk Global, and AST Space Mobile – not to mention some terrestrial services. In theory, this competition should bring down end-user costs. However, currently Starlink is arguably the most advanced in its market entry, service availability and its broad array of end user terminals and services aimed at different sectors.
Though not immediately. It may still be too early for Starlink to be affordable for many individuals in remote areas. However, consumers are not the only market. This is something Real Wireless has been tracking for a while and we can see a strong opportunity for Starlink and other LEO providers among remote, rural or mobile businesses – especially in the retail and hospitality sectors.
That’s because Starlink can make these businesses more efficient. Point of Sale (PoS) is an obvious example. Where coverage in remote areas is guaranteed by LEO satellites, transaction processing is quicker and more reliable, reducing wait times for customers and improving overall service efficiency. Low latency ensures swift communication between a device and a payment processor even for cloud-based PoS. It also allows for reliable internet connectivity and related benefits like real-time updates to inventory systems, ensuring accurate stock levels and reducing the risk of overselling.
In addition, Starlink’s constellation design and redundancy mean fewer outages. Even if Starlink is not the main source of connectivity it can still serve as a reliable backup internet solution.
All of this also applies to hotels, restaurants, and cafes, of which there are many in remote areas, serving tourists venturing beyond cities and towns; these businesses need efficient payment processing, inventory management and reliable Wi-Fi.
So do remote events and festivals. A portable and dependable solution for ticketing, sales, food and other operational needs could be a good short-term investment – and attract attendees.
There are still challenges, however in the LEO sector. A business may need professional installation help to obtain the optimum performance and service availability. Extreme weather is not as much of an issue as it once was but may still impact performance.
There’s also the question of local regulatory approval for a LEO operator to use its spectrum in a specific country – as with any satellite service – plus any specific regulations relating to public access to the internet.. As would-be Starlink users who have moved a little too quickly in places like Zimbabwe have found, ensuring compliance with local regulations regarding satellite internet usage is important. Businesses need to stay informed about any legal and regulatory requirements in their area of operation.
Of course that’s something we can help with. Real Wireless can and does assess regulation across a large number of wireless technologies. Costs, technical requirements and likely RoI are also areas on which we can advise would-be buyers of satellite services.
But that’s not all we can offer. We know that this industry won’t stand still. The continued deployment of satellite constellations and advances in satellite technology suggest that LEO-led disruption will intensify. In fact, SpaceX CEO Elon Musk recently announced that Starlink internet services were now operational in 102 countries after launching services in the island nation of Tonga.
We believe the competition between LEO satellite and a variety of terrestrial services is likely to drive further innovation, improved services – like satellite-direct-to-phone – (Direct to Device D2D as defined by various standards bodies) and more competitive pricing. But could that competition change business models too? Could we eventually see integrated solutions that combine the strengths of both satellite and terrestrial networks – so called Non-Terrestrial Networks?
As a company that has long worked with wireless on the ground and in space, we are better placed than most to assess the challenges and opportunities that LEO and similar future services can offer.
We are experts in telecoms engineering, network planning, economics and regulation. Indeed, unlike most consultancies, our staff have been recruited from some or all of these areas. We can, and do, advise service providers – terrestrial and space based – investors, business users, and regulators.
Which is why we have been closely tracking commercial LEO satellite services for some while. We can see that remote businesses are immediate markets for the likes of Starlink, but falling prices, competition and new business models will extend the service availability and expand the service user profile. We aim to understand that and assess the direction of the marketplace for the benefit of our many and varied clients using, selling or regulating wireless services.
We are only too aware that business models can change quickly. After all, 25 years ago many experts thought that cellular would never pass the 20 percent penetration mark in the developing world. They were proved wrong.
