New players, technologies and business models are raising the prospect of valuable, new satellite connectivity services. But how credible are the new opportunities and what do operators need to do?

Developments in satellite and non-terrestrial networks

Since 2020 there has been a resurgence in interest around satellite connectivity, with a focus on fixed broadband and D2D satellite connectivity. Much of this interest is driven by the regularity with which satellites are now being launched. Ten years ago, there were only around 1,000 orbiting the earth, now there are around 7,500 and this number is expected to rise to over 27,000 by 2030. The potential of satellite connectivity is becoming more apparent as satellite companies claim that they can help to deliver full broadband coverage and completely remove connectivity dead zones. How exactly new satellite connectivity will interact with existing mobile and fixed broadband networks will play a significant role in the evolution of the telecoms industry in the coming years.

Improvements in technology have coincided with a rise in demand. A lack of connectivity is no longer tolerable in the eyes of consumers, businesses and governments. Fixed and mobile broadband coverage forms a critical part of people’s daily lives, the running of enterprises and the operation of military and security services. There is now a sense that terrestrial networks are unlikely to expand much further than they already have, as areas that are not covered tend to be rural and sparsely populated, making the financial case for investment challenging. The pressure is on the telecoms industry and its partners to find a solution to the coverage problem. At the moment, NTNs represent the most promising potential solution.

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Satellites and their uses

Satellites are used for traditional applications such as radio and television, but also enable a range of essential connectivity use cases in maritime, aviation and military environments. In telecoms, the primary satellite application has been for mobile backhaul, in geographies where building out traditional backhaul infrastructure has been too expensive. The common theme amongst satellite connectivity use cases is that they provide connectivity where terrestrial and broadband connectivity is weak or not available at all. Up until now, satellite connectivity has been very expensive or limited in its uses. Large enterprises or specialists have been able to justify the investment for critical connectivity applications, but high prices and the need for specific hardware have kept overall demand relatively low. The entrance of major technology players such as Amazon and SpaceX into the market has introduced the possibility of lower costs, owing to their ability to launch satellites much more cheaply, to scale and to go directly to consumers.

SpaceX, through subsidiary Starlink, has already caused major disruptions in the satellite broadband market with the introduction of high-speed, low-latency satellite broadband. Starlink launched its first satellites in 2019 and already boasts over two million subscribers, many of which are living and working in remote locations without access to fibre. These customers range from individual consumers looking to boost their connectivity, to the Ukrainian government, which was gifted about 20,000 units by SpaceX in 2022.

The surge in enthusiasm around satellite connectivity for cellular devices has been driven by a number of new announcements and releases. With the launch of the iPhone 14 in September 2022, Apple introduced satellite connectivity for emergencies to its mobile handsets. A similar feature is set to become available for Android phones via a partnership between Qualcomm and Iridium. In August 2022, T-Mobile and SpaceX launched a technology partnership pledging to “end mobile dead zones”. Whilst the connectivity offered by these solutions is so far limited, the introduction of the new technology has brought about intense speculation regarding when and how more advanced D2D satellite-to-smartphone connectivity is likely to become available. The announcements have also coincided with the entrance of ambitious new startups such as Lynk Global and AST Mobile into the satellite market. Both have set their sights high. AST has promised that it can deliver satellite-to-mobile services with performance comparable to terrestrial networks, all within the next few years.

Types of non-terrestrial network

The new technologies and investments are associated with different types of NTNs. These types and other terminology used in this report are explained below.

• NTNs: This term encompasses both space-borne vehicles (i.e. satellites) and airborne vehicles (uncrewed aerial systems [UAS] and HAPS). This report primarily focuses on satellite communications but will also discuss the potential of HAPS and where they are likely to sit within the overall connectivity landscape as offerings mature. The entities that operate these space-borne and airborne vehicles are referred to as non-terrestrial operators, and those that operate satellites specifically are referred to as satellite service providers (SSPs) or satcos.
• Terrestrial operators: Throughout this report the term ‘telco’ is used to refer to traditional/legacy MNOs. However, there are others within the terrestrial ecosystem who may also be keen to collaborate with satellite providers and are looking to develop their satellite capabilities: for instance, IoT-focused operators and mobile virtual network operators (MVNOs).
• GEO satellites: Geostationary satellites revolve around the earth at the same speed as the earth’s orbit and complete one orbit in roughly 24 hours. They are placed at an altitude of approximately 35,800 kilometres, meaning they have extremely large coverage areas.
• MEO satellites: These orbit around the earth in anywhere from five to ten hours at an altitude of between 8,000 kilometres and 18,000 kilometres. Depending on their altitude, between six and twenty satellites will be required to provide complete coverage of the earth.
• LEO satellites: These are smaller than GEOs and orbit much closer to the earth. They orbit between 160 kilometres and 2,000 kilometres with an orbit time of around 90 minutes. Providing coverage using LEO satellites requires a far larger constellation than when using GEO or MEO satellites because of how focused the beams are.
• Multi-orbit systems: It is clear that LEO and GEO satellites offer different benefits, and this has led some satellite providers to focus their attention on combining these capabilities. The idea behind these multi-orbit systems is that they can rely on LEO or MEOs to offer the lower latency necessary to integrate with terrestrial networks more effectively, while GEO satellites can provide more capacity in specific areas with high demand.
• HAPS are forms of aircraft that fly or float in the stratosphere, at altitudes between 17 kilometres and 22 kilometres. They are uncrewed and designed to be airborne for extended periods of time. As HAPS are much closer to the ground than satellites, they can project smaller beams onto the ground from a directional antenna. This increases the capacity delivered per unit area. The primary benefit of HAPS is that their low distance from the earth allows them to, in theory, provide cellular connectivity to standard mobile devices using existing spectrum licenses. They can also be launched more quickly than satellites, meaning they could cover an area temporarily.

Different types of NTN offer contrasting latency and coverage benefits

Source: STL Partners

Table of contents

• Executive Summary
• Introduction
  • Satellites and their uses
  • Types of non-terrestrial network
• What is the potential of satellite connectivity?
  • Mobile backhaul
  • Remote area basic connectivity
  • Emergency backup connectivity: Disasters and conflict
  • Small-volume IoT data
• D2D challenges: Devices, standards, regulation and spectrum
  • 3GPP Release 17 specification
  • What will release 18 have in store?
  • Securing satellite spectrum
  • Will new hardware be required for satellite to mobile?
  • Deeper integration between mobile and satellite services is beset by technical and regulatory uncertainty
• New satellite connectivity market and business models
  • Satellite broadband
  • Satellite-to-mobile business models
• Conclusion
• Index

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