It is impossible to predict how many LEO satellites will be launched over the next few years. But, it is safe to say it will be in the thousands rather than hundreds. Huge numbers of satellites are going to come online. The question is, with all this capacity coming online, who are the customers going to be? What are the applications that will drive LEO take-up?
Three Wishes, Three Markets
What are the markets for LEO satellite capacity? We can talk capacity of satellites, the numbers of satellites, but ultimately, the satellites are only as good as the customers which want to buy capacity. Canadian satellite operator Telesat is going more into LEO than any of the other big operators. The company’s Chief Technology Officer (CTO) Erwin Hudson told Via Satellite that mobile backhaul, global connectivity including cloud access, emergency services, and disaster recovery are examples of verticals that will be addressed by LEO satellite services. Hudson also highlighted news gathering along with Internet of Things (IOT) services as other applications that Telesat expects to become more satellite-addressable as high-quality fiber-like LEO services become widely available. “It is important to recognize that the government satellite market, when served by advanced LEO constellations, will likely grow far larger than it is today,” he adds. “The expanded government market is expected to include civilian services including digital inclusion, diplomatic communications, and border control and protection as well as highly reliable broadband for military and defence — global broadband that will deliver greatly improved resilience, speed and security in support of defence missions around the world.”
While mobility is certainly a key market in Telesat’s LEO business plan, the company is developing a satellite network that will serve a wide range of fixed and mobile user terminals, from less than 0.6-meter diameter antennas up to 3.4-meter diameter. Its global business plan focuses on different markets in each region of the world. “Our LEO service offerings will be transformational not just for mobility, but for mobile backhaul, data services, disaster recovery, government, military, and other applications. And while we will not be focused on consumer markets initially, we believe our system will be competitive in direct-to-home once the low-cost antennas required become widely available,” adds Hudson.
Telesat is designing its LEO system to be compliant with Metro Ethernet Forum (MEF) standards, allowing its LEO services to be integrated seamlessly into existing telecommunications networks. It expects this standards-based approach will result in Telesat LEO becoming more of a core component in the broadband infrastructure of its customers versus an independent or stand-alone proprietary network, which is how Geostationary Orbit (GEO) services are often used today. “We also expect to see more widespread adoption of standards-based LEO connectivity in many different types of networks around the world which will be another factor in Telesat LEO becoming more fully integrated in future networks used by both our commercial and government customers,” Hudson adds.
LeoSat Chief Executive Officer (CEO) Mark Rigolle adds that he thought the three big vertical opportunities for LEO satellite operators were enterprise-to-enterprise, energy, and telecoms. While there is a lot of talk about mobility, Rigolle believes that LeoSat has equally high (if not higher) expectations from the enterprise and government markets, as he says these are the companies that face the real challenges in connecting sites and locations in a high security and low-latency fashion. “What terrestrial cannot offer is what we will bring. Filling an immediate need for organizations that have budgeted the money for that, makes that an attractive target for LeoSat. Mobility is certainly facing the same issues, but now more in the context of ‘simply get me connected’. We believe we can be successful by focusing on the right markets where requirements go beyond merely getting connected. And, LeoSat will also make satellite relevant in completely new markets — online gaming, low-latency cloud applications, etc.,” he adds.
Rigolle says he believes the key attributes of LEO systems will fulfill critical communications needs for enterprise and government customers. He cites many examples, and says capacity here can provide banks, governments or research centers (scientific research, pharmaceuticals) ultra-secure networks with global offices, significantly more bandwidth for companies if the field of oil and gas and mining exploration than is available today. He says this will enable seamless connectivity for shipping operators and cruise lines, or providing telecom companies with primary 4G and 5G satellite backhaul connectivity.
One of the interesting newcomers to the LEO arena is Kepler Communications, a Canadian based satellite company. Its co-founder Jeffrey Osborne told Via Satellite that he believes that within mobility, LEO broadband can address maritime, aviation, oil and gas (specifically offshore platforms), and higher-value modes of transportation such as trains or emergency response vehicles. In terms of narrowband applications, Osborne adds, “The real applications for narrowband services are going to be in providing cellular-like connectivity, which broadly means MB/mo bandwidth, bi-directional communication for firmware updates and data acknowledgements, low-power consumption, and low form factor. A narrowband product like this will find applications in everything from asset monitoring to smart metering, and can only be delivered through a LEO system.”
Iridium Communications Executive Vice President (EVP) of Sales and Marketing Bryan Hartin says that when looking at additional markets where LEO can monetize, Iridium sees opportunities across the maritime vertical, especially when it comes to safety communications, primary communications for smaller vessels and Very Small Aperture Terminal (VSAT) companion applications; the aviation market for cockpit communications and safety voice capabilities; within IOT for asset tracking and monitoring; and across the land mobile market for enabling Communications-on-the-Move (COTM) with reliable and rugged satellite phones and satellite push-to-talk applications.
The Internet of Things
IOT can mean different things to different people, and where satellite fits in has been the subject of much discussion over the last few years. It is particularly relevant to satellite operators in the LEO space. Osborne says that IOT is interesting and different from traditional telecommunication services, as the majority of the value does not lie in just providing connectivity — it is derived from the additional services that are layered on top. He says this could include application-specific data analytics and hardware, security features, cloud compatibility, as well as installation and maintenance of hardware. “Satellite operators provide connectivity as their core, but there is a lot of flexibility to move around in the value chain to deliver these additional products and services,” he says. “For Kepler, we are initially focusing on the user hardware as well as the connectivity part of the value chain. In other words, we sell connectivity hardware and airtime. Our fundamental belief here is that by tightly integrating these two critical components and developing them in parallel, it will give us a compelling value proposition that will allow us to later move on to other portions of the value chain.”
Hudson says Telesat believes the IOT market today is more about potential than opportunities that will drive near-term satellite industry revenue. “As IOT visions such as “smart cities” and autonomous vehicles become more widely deployed, high performing LEO constellations will be a cost-effective way to connect devices, sensors, monitors and controllers to the global internet cloud. Telesat’s LEO satellite network is designed to support small terminals, including 0.6-meter antennas and smaller, that will be well-suited for IOT services, particularly in remote areas. We also expect many IOT customers to aggregate data from a number of IOT devices at a single satellite terminal for simple and low-cost connectivity into our LEO network,” he adds.
In the coming years, Hartin believes satellite IOT customers can expect to see small data modems capable of broadband speeds that can be easily embedded into any application, vehicle, machine, device or ‘thing’, which is going to be particularly important for Unmanned Aerial Vehicle (UAV) command and control type applications. “Most importantly, customers can have the peace of mind that their assets will remain connected anywhere on the planet,” he says.
Impact on GEO
With the satellite industry moving to a more data-focused world, one of the other big questions is how LEO and GEO satellites will co-exist in this new world, and how the applications will be mixed between the different satellite assets. Osborne says it is unlikely that LEO will be the orbit of choice for most data applications. As mentioned, the ground equipment characteristic will give GEO satellites a competitive advantage for many fixed applications, with LEO having performance advantages for mobile. “What will be particularly interesting in my view is the effect on bandwidth pricing should mega LEO constellations come online,” he says. “Consider that the jump in globally available bandwidth from 500 Gbps to 1 Tbps by the introduction of High Throughput Satellite (HTS) systems has plummeted prices to 30 percent of what they were a few years ago. Mega LEOs are promising 10s of Tbps of capacity, and this will have a profound impact on bandwidth pricing as well as business cases for these operators. Ultimately, the immutable laws of supply and demand will prevail!”
Hartin believes LEO will definitely dominate in remote areas, like the polar regions, especially in verticals like maritime, where reliable and available connectivity is paramount. He also believes that GEO VSAT will continue to reign strong in the higher bandwidth space. “It will be interesting to see what the likes of OneWeb and SpaceX’s Starlink constellation will do to that existing dynamic. A lot of new HTS capacity is planned to come from GEO, but now also some from LEO. We don’t have a dog in that fight because we’re in the L-band and focused on specialty broadband versus commodity broadband, specifically, but we’re as interested to see how it shakes out as everyone else,” he says.
Outside of those traditional markets, Hartin thinks LEO opens the door for many future and unique innovations. “I think with the rise of proposed constellations, we will see a rise in LEO satellite-connected-devices as well across the board.,” he says.
Telesat is somewhat unique given that it plays in both the LEO and GEO world. So, therefore it is in a great position to assess the merits of both orbits and how it will impact its business going forward. “We believe LEO satellite services will be transformative for two-way data applications. The capability to reliably connect from anywhere to anywhere, with low latency, high speeds and at low cost, is a very compelling value proposition for new LEO constellations like the one Telesat is developing. GEO satellites will continue to play a role in broadcast services and for consumer broadband given the huge investments made in GEO HTS platforms to serve consumers. As LEO networks mature and as LEO ground terminals become lower priced, we expect LEO satellites will also be an attractive option for high quality consumer broadband,” Hudson says.
Examples of LEO in a Mobile World
Mobility, whether connected ships, planes, or cars, has long been targeted by satellite players as they look to diversify their revenue streams. However, where does LEO fit into some of the mobility markets, and are there examples that LEO players can learn from? Osborne talks about a specific example in the maritime sector, where it is deploying its services on icebreaking vessels, such as the German Polarstern vessel, which spends the bulk of its operating lifetime outside of GEO coverage. He says what is important to remember is that it is difficult to learn about the market and about customers until you try and deploy a service. “This is why we opted to deploy our service as soon as possible. For instance, in deploying our service to vessels, we learned that deck space was a major challenge; vessel operators do not have deck space for additional antennas. If a LEO system requires three antennas versus two needed for GEO, that vessel simply cannot deploy a LEO service. This is a simple example, but it illustrates the point that lots of satellites are not needed to test out a market and learn about customers. Ultimately, failure to learn about a market will doom many large LEO projects,” he adds.
Rigolle when looking to give an example of how LEO satellite could be used talks about the provisioning of lowest latency links to the financial services industry. “Never before has that been done on anything other than subsea cables for transcontinental connections, now that will move to satellite. The ability to operate oil rigs from shore using the near real-time command and control capacities is another. LeoSat anticipates playing a key role in the oil and gas industry’s move towards the often talked about Digital Oilrig,” he says. VS