Satellite is changing what it means to be connected. It provides connectivity in the most difficult to serve areas and enables new and exciting use cases
Satellite solutions are going through a major evolution with the support of satellite consultants like us. Falling costs of airtime are opening up new business cases, for example, within IoT. In short, satellite connectivity can complete and augment terrestrial and cellular networks for truly global coverage. New capabilities are leading the ecosystem to innovate and traditional CSPs are revisiting their positioning and strategies.
Through our services, RDC supports strategic decision making to take full advantage of the satellite opportunity. Our experience as satellite consultants includes a complete go-to-market strategy for Ground Control, a leading Sat-comms IoT provider. We can help design a future-proof go-to-market strategy and apply satellite capabilities to your existing business.
At RDC we can support you with:
- Satellite strategy
- Satellite M&A
- Satellite market intelligence
- Convergence of Satellite, Cellular and Terrestrial communications
- Implementation of satellite into operations.
The evolution of satellite
The first successful satellite launch took place on October 4, 1957, when the Soviet Union sent Sputnik 1 into orbit. This kicked off of the space race and sparked a new era of satellite technology.
Over the next decade, satellites became increasingly advanced and diverse in their capabilities. In the 1960s, militaries and governments began using satellite communications, enabling secure communication and remote sensing. Following this, the 1970s saw satellite technology used for weather forecasting and transmitting live television signals.
Subsequently, in the 1980s and 1990s, satellite technology continued developing, driven by advances in geostationary satellites and GPS. Satellite internet became available in the 2000s, allowing for connectivity in remote areas and on-the-go communication.
In 2020, over 1,600 satellites launched into space – the highest number launched in a single year. According to Union of Concerned Scientists (UCS) there were 5,465 satellites as of May 2022, 4,700 of which were in low earth orbit.
There are four main types of satellites
A satellite is any object that moves in a curved path around a planet. As an example, the Moon is Earth’s only natural satellite, but there are thousands more artificial satellites in orbit. These satellites can receive and transmit signals from to and from Earth.
There are four primary orbits for satellites, which roughly correspond to their classification:
Low Earth Orbit (LEO)
Typically, LEO satellites have an orbit time of around 90 to 120 minutes and require a low signal strength. As LEOs are close to the earth and have high speed data transfer, they are mostly used for high resolution satellite imaging.
While LEO works well for satellite imaging, it is less well suited for tasks in telecommunications. This is due to the speed they move making tracking more difficult for ground stations. Instead, LEO communications satellites often work as part of or constellation where satellites work together to provide constant coverage. Multiple constellations can launch together to create a ‘net’ around earth. These make up 72% of spacecraft in LEO.
Generally found in a low earth orbit, there are no official established standards for smallsat. The term typically refers to spacecraft with a mass of less than 500kg, though some experts consider the threshold to be less. There are several classifications of smallsats, including nanosatellites (mass of 1-10 kg), microsatellites (10-100 kgs), minisatellites (100-500 kgs) and CubeSats (based around a form factor of 10 cm cubes and with a mass of less than 2 kg). Smallsats are more cost effective than larger spacecrafts and easier to produce on mass, making them best suited for constellations.
Geostationary Equatorial Orbit (GEO)
GEO satellites orbit the Earth at the same speed as its rotation, maintaining a constant positioning over the Earth. A corresponding fixed antenna on Earth stays pointed towards the GEO satellite. Accordingly, telecommunications and weather monitoring use cases are most common. For example, TV antennas do not require adjustment and continual observation of an area can identify weather trends. There are also navigation satellites on the GEO orbit to provide a known calibration point and enhance GPS accuracy.
As a result, satellites in this orbit make up over 10% of all satellites in space. Satellites in GEO have a large range over the Earth, so as few as three equally spaced satellites can provide near global coverage.
Medium Earth Orbit (MEO)
MEO refers to satellites between the LEO and GEO orbits. Despite the huge range of distance this involves, they make up less than 3% of operating satellites. MEO satellites were historically used for GPS and other navigation applications. More recently, MEO constellations deliver low-latency, high-bandwidth data connectivity to service providers, government agencies, and commercial enterprises.
This is the least common of the satellite orbits, accounting for just 2% of satellites. The vast majority of these are military or government missions, with just three in commercial use.
Four uses of today’s satellites:
- Television: Satellites send television signals directly to homes, but they also send signals from a central station to smaller stations that subsequently send the signals locally via cables or the airwaves
Communications: satellites provide in-flight phone communications on airplanes. Also, they are often the main conduit of voice communication for rural areas and areas where a disaster damages phone lines
- Navigation: GPS is satellite-based navigation. It’s used by civilians and the military for navigation on land, sea, and air, and is crucial in situations where other navigation tools, like maps are unavailable
- Weather: satellites provide meteorologists with the ability to see weather on a global scale, allowing them to follow the effects events have on weather patterns e.g., volcanic eruptions and burning gas on oil fields.
Some satellite trends to watch
In 2019, Amazon launched AWS Ground Station, a managed global network of ground station antennas for satellite owners and operators. It allows start-ups to use AWS Ground Stations instead of building their own infrastructure. Since then, Earth observation companies such as Iceye, Capella Space, and Maxar Technologies are using AWS cloud and Ground Station to get data from satellites to their clients within minutes.
Following suit, Microsoft launched Azure Orbital Ground Stationin September 2020. The proposition provides low-latency connection between satellites and Microsoft’s cloud computing platform Azure. Azure Orbital Ground Station provides free backhaul of satellite data from any site to any region, making it possible for satellite operators to control their spacecraft via the cloud or integrate satellite data with cloud-based storage and processing.
Mergers and acquisitions
Satellite capacity has become a commodity product, resulting in high demand for capacity. This high demand coupled with falling global ARPUs has led to a concerted change in strategies, with the aim of reaching higher revenues. As a result, a flurry of M&A activity has taken place.
Satellite operators are beginning to transition from sole wholesale bandwidth suppliers to managed service providers. They are aiming to increase the value added to customers and avoid the commodity price trap. Operators, such as SES and Inmarsat, are pushing towards end-to-end network solutions for select markets and customers.
The market drivers pushing these changes include not only the need for constant connectivity in any geography and low-cost high bandwidth for end users but also new sales models that put emphasis on revenue sharing, usage base models and co-investment.
A growing trend in satellite, it allows operators to defend profit margins using differentiation, improve value to end users and grow capacity utilization.
Recent examples include:
- Acquisition of BigBlu Broadband by Eutelsat in late 2020:
- Bigblu Broadband provided Eutelsat with a distribution arm for its broadband-to-consumer product across Europe, complementing its wholesale broadband strategy. At the time of acquisition, Bigblu was the largest European distributor of satellite broadband services. Before the acquisition, Eutelsat was working towards vertical integration notably through the acquisition of Middles Eastern video service provider Noorsat and the launch of Konnect Africa broadband services
- Acquisition of Gogo by Intelsat, 2020
The acquisition of Gogo made Intelsat the direct provider of Wi-Fi to over 3,000 commercial aircraft. Before this, Intelsat had aimed towards vertical integration (e.g., investment in AMN backhaul provider and terminal developer Kymeta) with limited success compared to other leading commercial satellite operators such as Eutelsat and SES
- France-based satellite operator Eutelsat merged with UK rival OneWeb in July 2022
- The transaction, which valued OneWeb at USD 3.4bn, combined OneWeb’s constellation of 648 low-earth-orbit satellites with Eutelsat’s fleet of 36 geostationary satellites. The hope is it will help them compete with the Starlink constellation of Elon Musk’s SpaceX
- California-based Viasat agreed to pay USD 7.3bn in November 2021 for UK-based Inmarsat
- Inmarsat’s 14 satellites provide global mobile communications for ships, planes, and remote areas.
Satellites connect the unconnected
Satellite technology plays a crucial role in connecting and informing the world. Its importance will only continue to grow as we rely more on digital communication and data.
Satellite is a reliable alternative to terrestrial communications in environments where infrastructure isn’t feasible. For example, Starlink, operated by SpaceX, launched in October 2020 and claimed more than one million active subscribers worldwide by the end of 2022. More than 3,000 Starlink satellites are in orbit, offering broadband connectivity to users — especially those in rural areas without fixed-line connections. Starlink’s goal is to increase this significantly with up to 42,000 satellites by mid-2027.
Working alongside cellular and fixed line networks, satellite can provide another dimension of connectivity. It can act as a redundancy to ensure constant connectivity or can be there to provide a complete replacement of connectivity options. Soon, satellite will flip the world of information exchange upside down. Satellite consultants like us enable this change.
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