Recent announcements from organisations seeking to connect rural areas with a 600+ constellation of low Earth orbiting satellites repeat a story that is more than 20 years old. We only need to examine the failed ventures of Teledesic and Skybridge…
Recent announcements from organisations seeking to connect rural areas with a 600+ constellation of low Earth orbiting satellites repeat a story that is more than 20 years old.
We only need to examine the failed ventures of Teledesic and Skybridge, which also received early backing for similar systems with multibillion dollar budgets, but were ultimately unable to get their services off the ground due to a lack of investor support. Are we coming back to the future?
Teledesic and Skybridge failed to attract sufficient investors because of the weakness of their business plans.
Wind the clock forward 20 years to today, with the globe enveloped by fibre optic cable and broadband wireless mobile networks, and the case for a low Earth orbiting satellite constellation is significantly weaker than it was back then.
Wind the clock forward another 5 to 10 years – before OneWeb and other systems are ever deployed – and the business case will be weaker still as fibre would have penetrated deeper into rural areas, and broadband wireless 4G/5G networks deployed at ever decreasing costs.
But there are significant risks to these business plans beyond the lack of a sizeable market segment. Building low cost satellite platforms will require significant investment and time. It is clear that this will cost billions of dollars.
There is very little amount of spectrum allocated to NGSO LEO/MEO networks, and geostationary operators will viciously fight the interference that these networks will cause if they seek to use spectrum allocated for GEO systems. Fighting to carve out new spectrum for LEO/MEO networks at the ITU will take several years if not decades.
There has also been no demonstrated low cost phased array antenna systems that work with significantly high gain that current GEO fixed antennas provide. Even if these satellites are interconnected by cross-links, most governments will not allow the services to be used in their countries without a local gateway.
Constructing these ground systems will significantly increase the cost and complexity of the networks, and obtaining local telecoms licences to operate the local gateways as a foreign entity will add to this burden.
Also, where is the market for these universally available internet services? Some 70% of the Earth’s landmass is covered by water. More than 50% of the global population live in countries that are well served by terrestrial fibre and broadband services.
I estimate people lack broadband in less than 10% of the surface area. These regions also do not have electricity or a reliable means of fuel distribution. Even if you can get the service in the remote jungles, it is very costly to distribute diesel to power generators to power satellite networks.
Where there are sufficient population centres, and where there is electrical power infrastructure, mobile operators are already offering terrestrial broadband. The global mobile revenue today is over US$1 trillion and growing. Mobile operators will continue to push to the rural areas. LEO satellites will not compete against terrestrial broadband wireless.
In urban areas DSL technology is pushing 500 Mbps dedicated access to the home, and 5G mobile systems are being tested for 1Gbps speeds. There is no urban market for LEO constellations.
What about GEO networks? Where there is no terrestrial competition, GEO systems will be providing connectivity at far less cost and complexity.
For LEOs, more than 600 satellites are required to cover 10% of the Earth’s landmass. This means that the fill rate for each satellite will be 10% or less. If they run out of capacity in the remote areas, to double the capacity they need to double the entire fleet of satellites. This is terribly inefficient.
GEO satellites can add capacity where there is demand and not waste bandwidth over territories better served by terrestrial alternatives or over water. GEO platforms will be much more efficient.
Pricing of GEO high throughput services will dip below US$500 per Mbps if not US$200 per Mbps – I see GEO systems in the future bringing costs down below US$100 per Mbps. There is no indication of pricing by new satellite systems like OneWeb, but they will have to be competitive to the future GEO systems.
GEO platforms are also already available and their HTS systems will arrive much earlier than the LEO systems. In outer space, the GEO ‘dinosaurs’ are alive and thriving.
There is a reason why GEO systems are successful and money making platforms, and why virtually 100% of all LEO and MEO systems have failed in the past and will fail in the future. Projects that are based on hype, unproven technology, enormous cost and complexity, and on an unclear market base, are doomed to fail.
I believe I am uniquely positioned to comment on this LEO broadband hype. I am running the fastest growing GEO satellite system in the world today, but 20 years ago I worked on GEO HTS system called Spaceway at Hughes.
At Hughes we studied and disproved the inadequacies of LEO systems. If it made sense back then, we would have invested in it. It makes even less sense 20 years later.
Tom Choi is chief executive of Asia Broadcast Satellite (ABS)