Satcom silos are breaking down: Operators must be ready for convergence

Within the global telecommunications (telco) market, satellite communications (SatCom) has been a vital component, connecting people and businesses across the globe in remote and rural areas, or for mobile applications. Currently, the SatCom industry is undergoing an important transformation as the barriers separating it from the rest of the telco ecosystem are breaking down. The resulting convergence of satellite and terrestrial communications brings together the best of both worlds – but complacency may prove fatal for operators.

Source: Adobe Stock Images.
Demand for ubiquitous connectivity drives SatCom growth

In recent years, the SatCom market has witnessed substantial growth that is expected to continue. Within the predicted $1+ Tn space economy by 2040[1], a large portion is generally attributed to consumer broadband, internet enabled applications and government services, all three of which are typically enabled to some extent by SatCom.

Users today don’t care about the actual technical solution; they care about latency, bandwidth, and ubiquitous, resilient and secure connectivity. This shift in user preferences combined with technological trends such as the availability of Low Earth Orbit (LEO) broadband connectivity and the emergence of multi-orbit, multi-frequency, and integrated satellite / terrestrial networks is contributing to an increasing demand for satellite communications

A global drive to “connect the unconnected” calls for new solutions to deliver connectivity to rural and remote regions, which includes hybrid networks and future ambitions for broadband direct-to-device (D2D) satellite connectivity. D2D could drastically alter the communications landscape, by bringing satellite broadband directly to millions or even billions of smartphones.

Furthermore, there is a new drive towards combined connectivity solutions that deliver optimal quality of service in all situations by seamlessly integrating networks across different satellite orbits, different frequency bands and different technologies (e.g., 5G and satellite).

Multi-orbit integration leverages strengths of each orbit tailored to use case

As part of the approach for integration, connectivity providers (i.e., satellite operators, telecom operators and providers of integrated solutions) need to consider the different technologies in relation to key use cases. While nowadays all satellite orbits can facilitate high bandwidth networks, geostationary (GEO) satellites are still limited by high signal latencies and thus less suited for applications requiring a high degree of real-time interaction such as video calls, video gaming or high frequency trading. Low or Medium Earth Orbits (LEO/MEO), or even stratospheric high-altitude pseudo satellites (HAPS) providing connectivity, on the other hand, have lower latencies but also provide rather regional coverage and require handover operations to achieve global reach. Satellite numbers and associated constellation costs are thus vastly different if the same level of coverage is the goal.

Characteristics of non-terrestrial connectivity solutions by altitude above the Earth (orbit).

Terrestrial cable-based networks (e.g., fibre optic or 5G/6G mobile networks) typically have much higher capacity than satellite networks, but may be expensive to deploy in challenging geographies and are not suitable for remote mobile applications such as in-flight and/or maritime connectivity.

Suitability of different connectivity technologies depending on use case.
New business models are enabled by SatCom/telco convergence but operators need to be ready

The increasing convergence of different satellite and terrestrial communications solutions has given rise to – and is driven by – new innovative business models.

Dedicated satellite constellations are already in place to offer narrowband satellite connectivity for emergency messaging directly to cellphones (D2D), bridging the gap between satellite and mobile network operators and challenging traditional business models and value chains. In addition, a new contributor is appearing: HAPS offer the potential to revolutionise wireless connectivity by providing mobile cell towers in the skies. Hardware doesn’t have to be space qualified, launch is quick and easy, operations are environmentally sustainable and payloads can be upgraded easily – so this new technology is sure to capture the attention of satellite operators, telcos, mobile connectivity providers and tower companies alike once prototypes have fully demonstrated technical and commercial viability.  

In essence, connectivity providers are increasingly looking to sell seamless connectivity solutions that deliver best performance and continuity of service for a range of scenarios within a given use case, such as seamless and automated handover between terrestrial wireless and satellite networks for maritime applications depending on proximity to coastline. Networks integrating such different solutions can facilitate many applications of the future, from connected cars and Internet-of-Things devices to smart cities – with connectivity available everywhere, at all times.

Satellite operators embracing multi-orbit and integrated satellite-terrestrial capabilities are faced with chartering new territory and discovering challenges along the way. SpaceTec Partners can support the ecosystem with strategic analysis, technology roadmapping, market and service portfolio strategies and decision-making linked to various key topics:

  • Buy or build: Operators must carefully consider their convergence strategies, whether to develop their own capabilities or explore mergers and acquisitions (M&A) to enhance their network footprint and capabilities. While ongoing market consolidation has seen a range of M&A activity mergers pass internal and external scrutiny (e.g., Eutelsat and OneWeb or Viasat and Inmarsat), others appear to be pursuing a strategy driven by ringfenced partnerships for specific solutions or markets (e.g., Intelsat in partnership with Eutelsat and OneWeb). NewSpace players such as Internet-of-Things / D2D constellation operators are partnering with telcos or Mobile Network Operators to provide a combined solution to their respective customers.
  • Optimise flow: Efficient network orchestration is critical to ensure seamless integration and service delivery across multi-orbit and multi-frequency networks. Technology companies are increasingly looking to expand into the space sector and contributing by developing protocols and networking solutions such as SD-WAN that enable automation and integration of different technologies for connectivity. The goals of automated network orchestration capabilities need to be clearly defined in order to identify the most suitable technical solution for implementation. While certain players for networking technology are experienced in this field from the perspective of terrestrial cellular networks, a clear market leader has yet to emerge.
  • Ensure flexibility: Additionally, end-user devices and terminals need to be capable of supporting these diverse communication technologies. Developments of multi-frequency and multi-band antennas, electronically steerable beams, flat-panel technologies and a general trend towards smaller, mass-manufactured (off-the-shelf) components will be a key bottleneck for implementation of fully integrated communications solutions.
  • Use spectrum efficiently: Regulators are increasingly focusing on the topic of telco / SatCom convergence (e.g., EU, UK and US directives and frameworks). Strategic decisions regarding spectrum utilisation (e.g., satellite vs. cellular frequencies, frequency band depending on considerations around regional constraints, interference & regulatory approval) must be made to optimise network performance and minimise technical, administrative and regulatory obstacles. Optical communications may well be a crucial part of future strategies, enabling operators to navigate radio frequency spectrum challenges.
  • Integrate technologies: Interoperability and adherence to standards (such as 3GPP) while integrating with terrestrial networks are also essential aspects to consider. To ensure fully integrated solutions, key insights with regards to technology, service delivery and customer expectations need to be consolidated from both the telco and the SatCom side, and a common terminology, joint understanding of ultimate objectives and harmonised processes are critical.
  • Set competitive service portfolios and pricing: Operators must adapt their service portfolio and pricing strategies to cater to the evolving demands of the market while remaining competitive in the face of increasing convergence. Successful pricing will include considerations around current markets and future evolution (e.g., predicted decline of global video broadcasting markets or increasing market reach for high-speed consumer broadband solutions), knowledge about the overall ecosystem and key competitor insights, as well as detailed internal analysis of target markets, geographies and cost for service delivery.

In conclusion, the convergence of satellite and terrestrial communications is reshaping the global markets for telecommunications. Satellite operators need to address key strategic questions to move beyond individual orbits as silos and embrace integrated solutions that cater to the demands of modern users. If implemented successfully, the integration of multi-orbit satellite and terrestrial networks not only ensures seamless service delivery but also provides the foundation for the next generation of communication capabilities, fostering a truly connected world.

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[1] Source: Morgan Stanley

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