The satellite industry has seen huge changes since the last SATELLITE show, with constellations, consolidations, SPACs, space tourism — and a number of these developments made headlines beyond the industry. This is a time of unparalleled change. But, what state is the industry in? In this feature, industry leaders share their key talking points for SATELLITE 2021, and debate the impact of Low-Earth Orbit (LEO) and the technology questions facing the industry.
Tom Choi, executive chairman of Airspace Internet Exchange, highlights the issue of business cases for LEO, and questions how billions of dollars of hardware in space turn into sustainable revenues into the future. He has a number of questions to pay attention to at the show, such as how Fixed Satellite Services (FSS) operators can meet the challenge of LEOs and expand their system capacity and drive pricing lower for customers who are expecting ever lower pricing. And, how do equipment suppliers and subcontractors survive in this dynamic landscape?
“Orders for GEO [Geostationary Orbit] satellites are falling and many constellations are vertically integrating their own manufacturing. Do they vertically integrate themselves or form alliances with others?” he asks.
Teruo Yamashita, group president of the Global Business Group Space Business Unit for SKY Perfect JSAT Corporation wants to hear about sales and customer satisfaction for LEO systems OneWeb and Starlink. He asks: “What will be the next big mergers and acquisitions? And what will the world and the industry be like in 30 years?”
Dan Zajicek, CEO of Spacecom, believes the most prevalent talking points at SATELLITE 2021 will focus on next generation GEO; LEO constellations; mobility; new antennas; the influence of 5G; Internet of Things (IoT); and milsatcom.
Developments on the Ground
Zajicek says ground technologies are extending the industry’s abilities to deliver greater value to the higher and lower ends of the market. He cites the example of rural communications, where ground systems enable communities to enjoy connectivity, something that was not affordable and accessible until very recently.
“We are very proud to assist NuRAN Wireless, though our investment and satellites, with its plan to facilitate extensive rural connectivity across Africa. We are also working closely with other technological ground segment vendors in various domains. The ground segment is no different than the rest of the industry as innovation and technology drive growth,” he says.
Choi says that while about $200 million of investment has gone toward independent phased array antenna manufacturers, he does not believe any of them have managed to build an affordable phased array antenna for LEO systems.
“We are seeing stabilized and tracking antenna providers such as Intellian making headway for gateway and high capacity antennas for LEO systems. This makes sense to me,” Choi says. “We haven’t yet seen from third party providers a remarkable low-cost antenna for LEO systems. I believe GEO terminals are below $200 now in production cost and I can see they will get to $100 per unit.”
Choi hopes someone will make an extremely power efficient, low cost antenna that can track both LEO, Medium-Earth Orbit (MEO), and GEO satellites. He believes this will be a game changer allowing customers to use multiple orbits to receive capacity. It would give customers the ability to route high priority and low latency demanding applications and traffic to LEO systems and move streaming and bulk data applications to GEO.
Yamashita says that while some players are trying to innovate the ground segment and promote the use of Non-Geostationary Orbit (NGSO), SkyPerfect JSAT believes that the technologies still need to be improved upon. “We hope further improvement of the ground segment in the future,” he says.
Technological Innovations
In terms of technology innovations coming down the pipe, Yamashita highlights developments in laser technology that are in the works from a collaborative research group with Japan’s largest R&D institution Riken, and SKY Perfect JSAT. “The group’s goal is to develop the world's most compact, highly efficient, high pulse energy space laser that will be used for space debris removal. Space debris removal will be a reality once this advanced technology has been released,” Yamashita says.
Zajicek believes next-generation digital technologies will be game changers. He says, “As they become more affordable, they will allow us to deploy completely ‘generic’ satellites – capable of quickly changing service area, orbital slots, type of service, and more. Thus, we will be able to adjust and address the market’s ever-changing needs, improve space spectrum utilization, offer shorter times to market, and enhanced synergies with other communication infrastructures like cellular networks, and more.”
The Pace of Change
The satellite industry is transitioning from an era of launching a handful of satellites per year to thousands per year. Given the extensive funding currently directed towards LEO, Zajicek says it is not a surprise that this part of the industry is gaining momentum and traction. He says there is no doubt that recent years’ technological evolution has enabled advancements.
However, he strikes a note of caution. “Big challenges remain for providing sustainable and consistent operations. The demand for greater capacity via a cost-effective offering is an important trend and we will continue to see more GEO FSS satellites replaced by [High Throughput Satellites] HTS with greater abilities. Spacecom is focusing on our regions such as Africa, the Middle East and the European Union, where GEO currently plays a major role. We are investing in innovation and new solutions.”
It promises to be an exciting decade for our industry. Zajicek believes there will be lots of technology disrupting promises with new players entering the fray.
“We see new communication platforms, technologies opening abilities, new versus legacy companies, and a major shift toward a digitally connected world. I believe this decade will provide shifts to novel models alongside the emergence of new, large players and additional business drivers,” he says. “I also believe that these major forces will increase market turnovers. At the end of the day, I believe the industry’s fundamentals will remain the same; whoever can deliver superior services with efficient operations will remain and even enlarge their business.”
Yamashita says, “With the rise of NGSO, including EO [Earth Observation] and the entry of huge capital such as Amazon, the satellite industry map has changed dramatically. NGSO operators are gaining momentum, and the industry is no longer a village society. There have been major changes in every decade, and GEO operators have always been at the center of the changes. However, we have seen the huge movement of the satellite industry led by tech giants in these days, which may lead to a new world order.”
Choi says that despite talk about the fall of the GEO FSS industry to LEOs for more than five years, the GEO FSS industry continues to march on and customers are still coming to the satellite operators for requirements and capacity. While he admits that revenues are down slightly each year, he believes the industry is moving forward.
“HTS capacity investment is a must for GEO FSS players today. There is customer demand, I am talking to the end users. However, the ability to spend $200 million to $300 million on a new HTS today for many FSS operators is challenging. A new model must be developed to help them obtain that type of capacity,” he says.
Choi thinks the billion-dollar race to LEO waged by billionaires is still very experimental and challenging from an economic and technical perspective. These businesses need a new application to create a larger demand than the GEO FSS business. To enter an existing industry and gain market share, Choi thinks the disruptor must be fundamentally better and have a lower cost.
“When LEO antennas are below $200 and priced below $60 per Mbps — then customers will really pay attention,” he says. VS