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The final data frontier

Date: 24th March 2017
Topic: Monthly Features
Technology: Public networks
Tags: Satellites, Globalstar, VSAT, James Hayes, MNOs

Low orbiting high-throughput satellites might help make connectivity available to everyone, but do they also pose a threat to MNOs’ dominance? James Hayes studies the heavens

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Before the end of this decade newly-launched fleets of ‘routers in space’ circling the globe in low earth orbit (LEO) promise to boost satellite-based communications’ capacity and capability, and elevate satcoms’ position in the telecommunications market.

Launches from companies like LeoSat Enterprises, OneWeb and SpaceX aim to compete with incumbent satellite offerings relayed from constellations orbiting at higher altitudes. Their proprietors speak of providing links with low latency levels and speeds as fast as or faster than earthbound fibre. If their ambitions work out these new low orbit/high-throughput satellite (HTS) networks will offer alternative wireless communications for service retailers and intermediaries.

Mobile satellite service provider Globalstar is already ahead in the new space race, having had its LEO fleet in operation since the early 2010s. Although Globalstar’s market model varies from those of LeoSat and OneWeb, its success has demonstrated the viability of low orbit satcoms for specialised service delivery across diverse vertical sectors. 

The forthcoming LEO/HTS networks will differ from conventional higher altitude satellite operations in the way they use greater constellation densities and laser-linked inter-satellite routing power to transmit data between orbiting formations before it is sent earthwards to base stations. LeoSat Enterprises says that the routers aboard its 108 planned HTSs will form a mesh network interconnected through laser channels to create an ‘optical backbone in space’, which it claims will be ‘about 1.5 times faster than terrestrial fibre backbones’. 

OneWeb says that it will launch an initial 10 (of 650) satellites early next year, followed by a full launch campaign towards the end of the year, with the goal of providing low latency broadband access as early as 2019. LeoSat’s current schedule is to start launching its first ‘routers in space’ around the same time.

Third contender SpaceX has a different agenda: its satcom-based global internet service is seen as a way to fund the company’s other space exploration activities. CEO Elon Musk has spoken in terms of 4,000-satellite networks. 

“Satellite has traditionally been seen by MNOs as a last resort backhaul tool relegated to very remote sites where no other alternative was available,” says Lluc Palerm, senior analyst at Northern Sky Research. “However, with the arrival of HTS [already operational in geostationary equatorial orbit satcoms] this perspective is changing.”

The satellite sector has had its share of big promise/low fulfilment projects, but some industry watchers still claim that when they do arrive new LEO/HTS-based communications will, eventually, have a significantly disruptive impact on both the satcoms and terrestrial telecoms markets. “The key disruption of the incoming LEO/HTS networks will be the tremendous volume of satellite capacity that these networks will bring,” predicts Craig O’Leary, technical consultant for satellite data communications at Arqiva. “This is likely to have a significant effect on the price points for certain applications.”

Satellites are “good at high speed, low volume links – so for rural or metro edge areas where traffic volume is not very high but speed requirements are satellite provides a competitive solution,” says Palerm. “Instead of upgrading the whole ground backhaul backbone to accommodate the most critical scenario of traffic speed, satellite offers a flexible bandwidth pool among multiple sites. With 4G the peak versus average traffic ratio is growing. This, together with new satellite ground segment capable of statistically sharing traffic among multiple sites, plus cheaper satellite capacity, will accelerate with the arrival of LEO constellations with even more cheap capacity available.”

The new LEO constellations’ core technology will also be a factor in making them more ‘data friendly’ explains Ronald van der Breggen, chief commercial officer at LeoSat Enterprises. “Traditional satellite design only gets you so far when trying to integrate with terrestrial networks. If the objective is to have satellites seamlessly interoperate with terrestrial networks they need to support full duplex, and they also need to have route and switch capabilities [like] their counterparts on the ground.”

On-board processing and multi-protocol label switching are integrated features of LeoSat satellites, allowing them to operate as a full duplex spatial extension to terrestrial networks, van der Breggen claims. While the LEO/HTS combo may solve the capacity and latency issues sometimes associated with satcoms, he says that the real disruption will come from the seamless integration with terrestrial networking without loss of performance, while keeping satellite’s traditional advantages: rapid deployment, ubiquitous coverage and security. 

For Palerm, LEO/HTS’s disrupting element will be ubiquitous connectivity. “After years of fibre backbone deployment there are some symptoms of stagnation. Ground networks will never be able to connect all the villages of the world – even in developed markets – so these systems will help bridge this final frontier by providing capacity for backhaul and last-mile connectivity globally. This is important for emergent markets [where fibre backbone coverage is still low], for rural communities, and even for the IoT.”

Once LEO/HTS operators have adopted a more data-centric delivery model will their business models also become more data-centric? As well as partnering with MNOs to provide backhaul capacity, could they also compete with them – and other telcos – around the delivery of mobile and broadband services? Globalstar has proved that the demand exists in terms of mobile telephony.

But Palerm is yet to be convinced. “[The] overlap between MNOs’ markets and LEO constellation markets is thin,” he says. “[Next-generation LEO satcoms] will mostly target fixed locations. There will be demand for connectivity to aircrafts and ocean-going vessels, but not on a consumer level… Consequently, the typical use case would be for a fixed home in a rural area, or for demand aggregation points like mobile towers or Wi-Fi hotspots. That said, with the fixed wireless convergence there might be a bigger overlap in semi-rural areas where satellite and ground-fixed wireless technologies will compete for the same set of customers.”

“The average revenue per user and up-front terminal costs for a LEO/HTS service are very different to those for a terrestrial mobile operator, so I don’t see LEO satellite services competing directly with terrestrial mobile broadband,” says Philip Bates, principal and head of satellite consulting at Analysys Mason. “LEO satellite services can, however, be used to provide backhaul to terrestrial mobile base stations in remote areas where alternatives such as microwave would be difficult to install or prohibitively expensive to run. The key advantage that LEO systems will offer over existing geostationary satellite backhaul is lower latency – which should improve the experience of end users who rely on satellite backhaul.”

Palerm also doesn’t expect LEO satcoms to become direct competition for MNOs anytime soon. “Satellite will be part of the backhaul technology mix that forms MNOs’ backbone. Among the main investors backing OneWeb there are several MNOs. They see the investment as a way to get access to a tool to extend their networks.”

For O’Leary the critical factor underlying the head-to-head competition question is whether global demand will increase as forecast, or whether there will be an oversupply of capacity. “If there is oversupply then there will be tough competition from either side. If the demand increases as predicted then [it’s likely] there will be jostling for market share, but otherwise each technology will find its place.”

“Now 4G services over satellite are totally viable – technically and economically – and this is driving a lot of growth from a satcom perspective and allowing MNOs to reach areas where it was totally uneconomical to offer broadband,” adds Palerm. “These systems will have even lower latency than fibre for long-distance connectivity, so applications like high-speed trading could be interested in these solutions.”

“It seems likely that the first area LEO/HTS operators will make a difference is the provision of passenger broadband services in the aeronautical and maritime sectors,” says Analysys Mason’s Bates. “The land mobile sector is much harder for LEO operators to penetrate because the majority of motor vehicles, for instance, rarely drive out of terrestrial wireless broadband coverage.”

Gavan Murphy, director of marketing EMEA at Globalstar, suggests that “a hybrid approach is gaining traction – where you see mobile satellite services being used for crew communications, tracking assets, and lone workers, as well as conveying back office business data. This offers cost savings by removing non-mission-critical traffic from their critical networks, enabling them to perform better. Users can also embrace technology alternatives that deliver complementary features, and provide a back-up should VSAT [very small aperture terminal] networks fail. For some environments there’s no need for VSAT’s full belt and braces approach.”

“If we look from the capacity perspective some of the key drivers for demand are coming from the transport sector – aeronautical, maritime, etc. – that provide connectivity in captive environments,” says O’Leary. “American Airlines is replacing in-flight entertainment systems with in-flight connectivity – via VSAT broadband in most cases... – driven by global technology trends such as tablets. In other sectors growing cyber-crime threats and business continuity requirements are likely to see satellite as a preferred technology; satellite can add distinct value, deliver private dedicated networks that are off the grid, and terrestrial networks from end to end, giving unprecedented reliability.”

All the new LEO/HTS constellation operators will target the mobile backhaul market to a greater or lesser extent, anticipates Bates. “Mobile operators are likely to take a fairly pragmatic approach in considering the availability and total cost of ownership of LEO satellite backhaul versus self-built microwave, so the success of new satellite operators in this market will ultimately depend on the reliability levels and price points they can achieve.” 


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