Ready, steady, LEO. The race to having satellites placed into Low Earth Orbit (LEO) has begun, and many companies, both old and new, are already working on their constellations. These small satellite fleets are intended to answer calls for a variety of services, including the Internet of Things (IOT), Earth observation, and communications. In addition, there is also the waxing allure of meeting rising broadband demand. Just as all this casts a shadow over the apparent waning Geostationary Earth Orbit (GEO) satellite orders, it seems that an ever-growing number of companies are also thinking about joining the smaller satellite, non-GEO fray.
While it can be agreed that LEO is currently in center stage and, at the same time, while it can be agreed that colossal fleets of small satellites have the potential (at least in theory) to shift the paradigm of satellite internet and communications, we can’t possibly know what is going to be realized. We’re left to ponder what the stars have in store for us until these constellations are launched into orbit.
What we are certain of is that beyond launching these fleets a significant number of challenges need to be overcome in order to unleash this potential, notes Susan Bull, senior consultant at Comsys, a specialized telecommunications, satellite, and Very Small Aperature Terminal (VSAT) systems consultancy.
“Right now, the satellite industry is standing on the edge of a cliff. We can either fall off it or we can go flying through the sky. In order to do the latter, there is a lot that needs to happen; a lot needs to be certified and come to fruition,” says Bull.
Should these LEO promises be delivered, she says, not only will users benefit immensely from global connectivity, but the satellite industry is potentially going to have a significant advantage in the telecommunications market.
Facing the Challenges and Winning over Telcos
Clever business plans, unprecedented cooperation, and technology are the crux of the mighty LEO manifestation, explains Bull. On the technology front, solving the issue of antennas is a critical component to the LEO solution. Without this, we will not be able to jump between satellites of different fleets, something that is needed in order to really deliver the promise of high bandwidth at high speeds.
“I really question if the LEO operators will be able to handle all the bandwidth requirements. Will they be able to provide such bandwidth, both at these fast speeds and in such volumes, all the time? With regard to any operator including GEO, we can talk about achievable high data rates, but when you really look into these services, does a user really get this speed guaranteed? In reality, there are issues of bandwidth limitations and service providers reducing the data rate, either when the customer has used so much bandwidth, or when there are so many more users on that satellite at that particular time,” she says.
The solution is to move between different constellations with a single terminal dependent on what kind of bandwidth is needed. This would allow the operator to deliver the promise of high data rates at high speeds all the time. Therefore, the issue of antennas and software-defined networks need to be solved, says Bull. But it also means that cooperation between fleets and, therefore, between satellite operators needs to be achieved, she adds.
“It’s not just the technology — the business strategy that will be behind LEO is vital, too. Something that will be critical is cooperation between satellite operators. Being able to jump between these satellites all comes back to the fact that we have to have cooperation. When I look to some of these new systems coming up this cooperation is one of the critical points.”
Getting the ground equipment in check, then winning over the cooperation between satellite operators and implementing a complementary business plan, satellite would gain the upper hand with the telecom market. If the LEO operators came together, along with the ground antennas that are needed to share bandwidth between LEO, Medium Earth Orbit (MEO) and GEO —then how could the telcos not see this truly global coverage as being absolutely crucial to their future?
“If we look back to 1980s, satellite was absolutely crucial to the international telecoms. Then along came fiber and all that went with it, and then they started seeing satellite as being just a tiny part of the market, and most just kicked it out of their business. Yes, we still have the likes of Telefonica and BT who are exceptions, but nevertheless, most still see satellite generally as secondary or not even worth their while. I wonder if the telcos are not, in the future, going to be kicking themselves for not looking forward to something like LEO,” says Bull.
Cooperator, not Competitor?
So just how likely is it that LEO satellite operators will achieve this cooperation? As more and more LEO networks come online, won’t the competition increase? At first, this may seem like the logical outcome, but upon greater consideration we find that not all LEO constellations are rivals. In the case of frequency, for example, it’s highly possible to have a Ku- or Ka-band satellite in LEO competing against a similar spectrum GEO-based broadband system, rather than another network in LEO. The more differences between these LEO systems, the less competition there is.
When looking at the LEO constellations of the bigger, well-known players, there are several ways that these systems are differentiated, explains Nathan de Ruiter, managing director at Euroconsult, referring to LeoSat, OneWeb, SpaceX, Telesat, Iridium, and Eutelsat.
“All are quite different in terms of Capital Expenditure (CAPEX) profile, system promoters and partners, system design, and target markets. The most obvious differentiation can be observed in the target markets, partly driven by system architecture. For example, LeoSat with inter-satellite links will address a high demand spot, and OneWeb offers its global coverage,” says de Ruiter.
Iridium and Eutelsat are both targeting low data rate communications for IOT or Machine to Machine (M2M) applications, while others are targeting broadband applications with overlapping and complimentary user segments, adds de Ruiter.
“For example, LeoSat targets high volume broadband markets for premium professional users, while OneWeb aims to provide ‘connectivity anywhere’ for all professional users and consumers,” he adds.
On the financial side, the satellite constellations will all need to demonstrate and validate market demand by signing pre-launch commitments with customers. The if-you-build-it-then-they-will-come philosophy will not get you to a financial close, says de Ruiter. And subsequent to financial close, he adds, operators will have to rapidly scale up commercial business to demonstrate financial returns and meet covenants.
“All constellation projects are on a critical path to overcome challenges in terms of regulation, finance, commercial goals, and user terminals. We foresee that some projects may join forces to de-risk the project and overcome operational challenges,” says de Ruiter.
Partnering in the face of risk may help overcome some hurdles, but we have additional reasons to be optimistic about LEO projects making it to fruition, adds de Ruiter. Firstly, there is the demonstrated capabilities and experience of incumbent satellite manufacturers needed to deliver reliable satellite systems. Then there is the experience and funding behind these GEO operators that are committing to LEO satellite constellations. Finally, it’s the interest and commitments from mobile network operators such as Bharti and Softbank. Engaging a mobile network operator as a distributor could become a key determinant in establishing market access and driving commercial success, explains de Ruiter, adding that there also reasons to be pessimistic though.
“There is the availability of low-cost terminals. Despite technology advances in electronically-steerable flat-panel antennas, there remains high uncertainty about the availability of low-cost user terminals. The user terminal cost can significantly drive the total cost of ownership for some user segments and, therefore, make or break the business case,” he says, adding that the time to market plays a factor, too.
“The required time to gain market access and develop local distribution networks can significantly delay ramp-up and commercial returns. And finally, there is the strong competition of increasingly competitive GEO/MEO communications satellite systems, such as Viasat-3 or O3b mPower, that will be launched over the same period.”
With significant challenges seen, the LEOs are at a historical moment. Will they get it right and change communications and connectivity as we know it? Let’s hope so!
Weighing Up the Big LEOs
Telesat, Eutelsat, Iridium, LeoSat, OneWeb and SpaceX — they all have LEO-based projects, but where are they in their plans, what do they have going for them, and what sets them apart? We take a look at these constellations, their progress and their prowess.
Telesat LEO: Following 2017’s approval from the U.S. Federal Communications Commission (FCC) for a 117-satellite Ka-band constellation, Telesat placed one of two prototypes in orbit in January of 2018. Then, more recently in November, the FCC granted new regulatory approvals, allowing Telesat to expand its constellation, but in the V-band spectrum. The Canadian satellite operator has already awarded study contracts to Airbus Defence and Space, and selected Thales Alenia Space and SSL to evaluate the constellation’s construction. According to the satellite operator, its business plan is based on around 292 satellites, however, its ambitions better suit the system’s capabilities of handling 512 satellites, more than double the number authorized by the FCC. With worldwide rights of 4GHz of Ka-band spectrum, Telesat is targeting year 2022 to start its global service, which will provide high-speed broadband for maritime, aviation, remote enterprise and government, and cover cellular backhaul.
Eutelsat LEO: Eutelsat ordered its first LEO smallsat in March, which it described as a “first step” to targeting IOT. The satellite dubbed ELO, which stands for Eutelsat LEO for Objects, will be launched in the first half of 2019. The satellite operator has chosen to use a Tyvak-supplied nanosatellite aimed at narrowband for this lone application because of the low bit rate connectivity required. Similarly, Iridium is also targeting low data rate communications for IOT or M2M applications. Dissimilar to the likes of Telesat, Eutelsat is taking a low-key entry into alternative orbits because its single satellite is intended to test the business case for LEO in IOT, not to offer a commercial service. Should the tests prove the technical capabilities and that the business model is viable, it is likely that a larger IOT-dedicated project, if not constellation, is on the cards, however, this has not been included in the company’s capital expenditure plans as of yet.
New verticals or sectors that Eutelsat could target in IOT include smart cities, mining, agriculture, and transportation together with its applications in security and predictive maintenance.
Iridium Next: The $3 billion upgraded Iridium Next fleet was completed on Dec. 30 by Iridium’s sole launch provider, SpaceX. The 75 satellite fleet comprises of 66 active satellites and nine in-orbit spares.
Iridium Next operates using L-band frequencies, offering robust signal strength well suited for safety communications. The LEO satellites are able to provide voice and data connections to users anywhere within its global coverage. The company serves users in maritime, aviation, land mobility, and government verticals. Similarly to Eutelsat, Iridium is targeting low data rate communications for IOT or M2M applications.
LeoSat: LeoSat is currently working with Thales Alenia Space for its LEO Ka-band constellation of up to 108 communications satellites. However, the satellite operator has received approval from the FCC for 78 Ka-band satellites so far. According to the company plans, the satellite operator expects to launch the constellation in 2020. It plans to have all its High Throughput Satellites (HTS) interconnected through laser links. This would create a space-based optical backbone, without the need for any terrestrial touchpoints, that works 1.5 times faster than terrestrial fiber. These inter-satellite links also mean that LeoSat is well suited to address a high demand spot. In September, the company secured commercial agreements valued at more than $1 billion. It is also working on the development of a ground system and is in a partnership with Phasor Solutions, a developer of Electronically-Steered Antenna (ESA) systems.
Once operational, the constellation will provide high-speed, secure communications and bandwidth. The company will target high volume broadband markets for premium professional users, serving energy, maritime, government and enterprise verticals.
OneWeb: Similarly to LeoSat, OneWeb will seek to provide broadband for professional users and consumers, but differently, OneWeb offers global coverage rather than addressing a high demand spot. OneWeb is working to produce 900 satellites that will interlock with each other in order for the constellation’s footprint to cover the entire planet. Small, low-cost user terminals will connect with the satellites and emit 3G, LTE, 5G, and Wi-Fi to the surrounding areas. It is intended that the people living, working and studying in these areas will use this connection. By 2022, OneWeb aims to connect every unconnected school. By 2027, the company plans on bridging the digital divide. The service is also intended to include homes, connected cars, trains and planes, and cellular backhaul. The first 10 production satellites are scheduled for launch in 2019, following which OneWeb will begin providing broadband access in 2020.
SpaceX Starlink: The company describes itself as being in the “very early days” of developing its planned constellation, but it has already launched two prototypes in February 2018. A month later, the FCC approved its initial constellation of 4,425 satellites in Ku- and Ka-band frequencies. More recently, though, the FCC in November approved SpaceX’s proposed satellite constellation, authorizing an additional 7,518 satellites in what SpaceX calls Very Low Earth Orbit (VLEO). According to the rules of the FCC, upon receiving authorization in March, SpaceX has six years to launch at least half of its constellation. Within nine years, the full constellation must be launched. SpaceX is planning to begin service with 800 satellites in 2020 or 2021.
The constellation is intended to provide broadband communications, which SpaceX has expressed as being in high demand in numerous parts of the world. The company’s goal is, therefore, to provide broadband connectivity to underserved areas of the globe, as well as to provide competitive services to urban areas. VS