Beyond GEO: Major Operators Have A Multi-Orbit Focus

Facing competition from a wave of NewSpace market entrants, satellite operators have to respond by moving to a mixed-orbit model and focusing on broader service delivery, executives said during the General Session at Satellite 2020 on Tuesday.

“Satellite has to play in a much bigger sandpit,” SES President and CEO Steve Collar said. “The days of niche and expensive are long gone ... We need to move to broad-based and affordable.”

Collar said that SES was moving to a multi-orbit model, integrating its legacy Geostationary (GEO) satellites and new Medium-Earth Orbit (MEO) constellation to provide a seamless service for its customers.

“We’re building an integrated cloud scale network using multi-orbit that will allow our customers to roam on and off that network and utilize that network based upon the applications that they’re running,” he said. “What multi-orbit does is it allows you to put the right customer in the right place in the network at the right time.”

The customer, Collar said, doesn’t care what orbit they are getting their connectivity from, “There’s no religion about it ... is it MEO or [Low-Earth Orbit] LEO or GEO? ... For us, it will be a mix, it will be integrated and most of the time the customers won’t know what they’re on.”

Hughes President Pradman Kaul agreed. “We think all three orbits are important,” he said, “And obviously, we are playing very, very strongly in all three as a service provider.”

Collar said SES’s move to MEO had been driven, in part, by the need to reduce latency for some applications. “I remember sitting on this stage probably 10 years ago, and latency was dismissed as being not relevant. And I think that doesn’t reflect well on our industry,” he said. “It was very contrary to everything that science told you, everything the mobile industry was doing, everything that the terrestrial industry was doing — it all suggested that latency was important.”

But trying to solve the latency issue with a LEO constellation, providing a direct-to-consumer broad- band internet service like SpaceX is working toward with the Starlink constellation, won’t work either, he said. “It’s enormously challenging technically, it’s enormously challeng- ing from a business case.”

Collar noted that Elon Musk, in his Monday fireside chat, said that his primary goal was to not go bankrupt. “I think that’s a less trivial goal than it sounds,” Collar commented.

He explained that for SES, MEO provided the right balance between driving down latency so that all applications can be supported, but not so far that the cost and complexity of deployment skyrocketed.

Eutelsat Deputy CEO Michel Azibert shared Collar’s skepticism about the large LEO constellations.

“We think it will probably not work,” he said, noting that, in addition to the technical challenges. “The cost [structures] are not there. We think it’s going to be an expensive solution for consumers. The tracking antennas are going to be ... expen- sive for quite some time. And the go-to-market [strategy] is complete- ly vague, and the go-to-market is the name of the game in getting success in residential broadband.”

For all these reasons, Azibert said, Eutelsat had chosen, in its move to multi-orbit, to focus on one specific LEO application: connectivity for In- ternet of Things (IoT) devices. “It’s not really expensive, it’s just a small constellation that we hope to build — 25 to 50 satellites, very light CapEx. Very adequate solution for narrowband productivity [applications],” he said.

On the hot topic of C-band allocation in the U.S., all three executives said they are satisfied with the FCC’s plan to host a public auction, giving would-be players in the new 5G ecosystem the opportunity to bid for spectrum currently used by the satellite industry.

Kaul said called it “great.” “Our customers have more money to spend on systems they can buy from us, so it’s a great opportunity for us and good for the industry of course."

Azibert called the FCC’s role as a regulator in the U.S. “pretty unique,” and that it’s unlikely that governments in other countries where C-band is regulated will follow the FCC’s lead. “There are continents where C-band is really useful and I think it would not be advisable for C-band to go to the telecoms,” he said.

Collar called it a win across the board for customers, operators, and the whole industry. But he was more cautious about the implications of 5G in other areas. “I don’t think it’s a game changer,” he said.

Kaul added that 5G was “a great opportunity” for the operators, because backhaul for cellular service providers was a “bigger and bigger” market for them. “Obviously, with 5G, because the number of base stations will increase, and the number of cells will increase dramatically, that should result in the backhaul business growing significantly,” he said.

While 5G would compete with satellite operators in the residential broadband access business, Kaul said, they would, at least in the beginning, be serving different markets, with 5G concentrated in the densely populated urban areas. “In the next five years or so, the investments in 5G are going to be in high density areas ... those markets that we have never really thought about. We focused on the unserved and underserved markets and will continue to do that.” VS

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