Before the close of the 20th century, an entity called Iridium launched a network of low-earth orbit (LEO) satellites designed to provide enterprises, the military, and the government an out-of-this-world resource for communications links to virtually any location back on planet Earth.
Iridium’s constellation of satellites initially focused on telephony applications in the decade-long, pre-iPhone era. Motorola-backed Iridium survived a LEO constellation market segment shakeout that hit others, including Globalstar, Teledesic, and Odyssey.
Now fast forward to 2020, where Elon Musk's SpaceX, Amazon, Telesat, and OneWeb are vying to fully take flight to support next-gen networking-driven initiatives here on Earth, likely providing IT managers with fresh new options for supporting new and rearchitected business undertakings.
With earlier geostationary satellites, several high-orbit birds could provide global coverage, albeit from over 22,000 above Earth. With LEOs, which are set at about 100-1,200 miles above the planet, a LEO can cover about 1/66th of the globe, which means a large constellation of birds is required for true blanket global coverage. Though they have shorter lifespans, they are more advanced and less expensive.
As a result, today’s LEO satellite networks promise higher-throughput, lower-delay communications that provide more bandwidth per user, “even more than cable, copper, and pre-5G fixed wireless,” states a report released by McKinsey & Co. earlier this year.
Early LEOs were commonly used for voice communication and military applications. However, this latest generation of operators are expected to offer HD video streaming, higher-bandwidth data communications, and provide rural broadband to bridge the digital divide. Most of their former voice traffic is carried on terrestrial wireless and wired networks.
Musk’ SpaceX had already launched a constellation with over 400 LEO satellites by April (with more to come) under the Starlink brand name. Telesat will start with over 100 birds, with more available, and Amazon has already filed to launch 32,000 plus satellites in its constellation.
Under Amazon’s Project Kuiper, the company will invest $10 billion in an FCC-approved plan to launch 3,326 LEO satellites.
Yet another competitor is OneWeb, which has emerged from bankruptcy under new management and with new funding just before Thanksgiving. It plans to recommence satellite launches in December, toward its initial goal of 650.
Failure to launch
Caution is suggested in selecting providers, as launching a LEO satellite constellation is quite expensive. Funding, or lack thereof, can explain where providers are on the timeline to boasting a full fleet of LEO birds.
Specifically, OneWeb has already had serious financial problems. Another player, veteran global satellite service provider Telesat, has not yet named a manufacturer(s) for its LEO satellite fleet. Telesat has launched about one-tenth of its approximately 700 planned LEO satellites. One-time contender, LeoSat, which had committed customers but not much on the investor front, shut down operations in August.
Money is everything in LEO constellation endeavors. Evaluating equipment and service providers in LEO satellite services is of paramount importance for enterprise IT managers since entrants are at different points in their grand plans to launch large constellations.
For example, OneWeb has already emerged from Chapter 11 bankruptcy and been infused with new capital. Deep-pocketed SpaceX already has several hundred birds in space without financial challenges. Telesat is counting on about $460 million (U.S.) from the government of Canada once its birds begin offering reduced-cost broadband Internet to rural areas across the nation of far-flung cities.
Getting a solid handle on pricing for LEO services is extremely difficult as only pieces of some offerings have been nailed down per link. For example, it appears that IT managers will pay $99 monthly plus a one-time $499 upfront charge for a user terminal device to link with satellites (as well as a Wi-Fi router and a tripod) from SpaceX for a 1Gbps Internet connection. That is much faster than 4G but less than 5G. This was given as beta pricing.
By contrast, OneWeb is expected to offer several connections of over 400 Mbps but has not yet provided full pricing information.
Equipment costs for user terminals are expected to drop substantially with technical evolution and volume manufacturing.
High-earth orbit satellites have long been able to provide wide coverage from a small number of birds. However, if an enterprise has international communications needs, they will find that current LEO satellite plays are initially focused on individual regions or continents. This is largely because securing regulatory approvals is time-consuming. Expect eventual change as rollouts continue. If the need is near-term, another option is to seek a LEO satellite provider with interconnection/sales arrangements with one or more other operators.
Flawed business models limited ambitious LEO launchers in the 1990s. Building and launching a network of LEO satellites is still a big-ticket and time-consuming undertaking today. It is unclear if some of the models have taken enterprise user demand into account. Multiple current contenders have been slowed by financing challenges.
Given this LEO satellite reality, IT managers would be best advised to track provider business models and press operators for pricing structures (or better yet, actual pricing) for the promised high-speed services. This should be feasible in 2021 as the current market evolves with hopes of avoiding the growing pains and failures of the 1990s pioneers.