We have covered the momentum behind low earth orbit (LEO) satellite constellations over the last year, with an initial post digging into the key drivers behind LEO momentum. There have been plenty of headlines and soundbites for nearly a decade, devoted to the Next Billion, Connecting the Unconnected, Bridging the Digital Divide and so on. There seems to be a 70:30 rule, yes, not even 80:20, when it comes to terrestrial coverage deployments by mobile operators. That is, roughly 30% of a given country’s geography will remain out of reach for terrestrial mobile networks. Of course, this is an oversimplification, and it depends on the market being considered. For example, a country like Australia will do exceedingly well to cover 50% of area, while an island state like Singapore has been blanketed with coverage, including at indoor venues.
Nonetheless, there are a significant number of users who are remain stuck on the fringes of modern communications and Internet access. COVID19 has also played a part in shining a light on these disparities. Indeed, the pandemic only served to exacerbate the disparities. As we wrote in the earlier post, “The pandemic has caused well-documented disruptions to the workforce as well as consumer households through lockdowns and “work from home” strategies deployed, among others, to combat the spread of the virus. While the degree of disruption varies across countries and regions, one common theme has been the displacement of people from urban to rural, from workplace to “home,” from schools to “home” and so on. The implication of all these shifts, some transient, some permanent, has been that disparities in broadband connectivity have become very apparent. Policymakers have taken cognizance of this and moving quickly to address these gaps.”
So how does the industry address the elephant in the room, or in other words, the significant gaps in terrestrial network coverage? Relying on operators to fix the gaps is a non-starter, as there is no business case for rural and remote coverage in an industry that is already plagued by heavy capital expenditures, long depreciation cycles for legacy equipment and a mission critical dependence on the energy grid. Early and ambitious attempts by the likes of Google (Project Loon) and the formerly named Facebook (Aquila) did make a dent but were quickly sunset by their owners. There is renewed momentum with the advent of LEO technology and the heavy investments by the likes of Starlink, OneWeb and others to launch constellations. Elon Musk’s Starlink has recently helped to launch an Indonesian satellite Satria-II to occupy an orbital slot above Pulau, with a reported capacity throughput of 150 Gbps/sec. The Philippines is another archipelago country in Southeast Asia which is very keen on satellite connectivity. Globe, a Filipino operator, has been conducting trials with Lynk Global’s LEOs for SMS and emergence alerts, while other service providers like IEC Telecom is exploring solutions for the maritime industry in the Philippines.
But there seem to be some new drivers.
The first of these is momentum towards a vision of Direct to Device, or the ability for users to connect directly to other consumers using smartphones from their own devices when outside the range of terrestrial networks. We covered momentum for D2D in this post that was published after MWC23. In this post, we had discussed new developments from Snapdragon Satellite by Qualcomm, Mediatek Satellite as well as a number of operator-driven satellite services from the likes of Telefonica, Deutsche Telekom, and others. Telstra has also spoken recently about their ambitions to offer voice and fixed broadband services to remote areas through LEO connectivity.
The second new driver is coming from demand from telecom operators for backhaul links and capacity. The biggest of these announcements came from Telstra recently. Telstra will be partnering OneWeb (soon to be acquired by Eutelsat) to provide backhaul links to its remote sites across Australia. Many of these were previously based on GEO satellite links, which meant that the links were very expensive to maintain and also low capacity. Telstra will begin to transition “hundreds of existing remote base stations” to the OneWeb LEO constellation, with a claimed capacity of 25 Gbps per second.
The third new driver is demand for IOT applications in rural/remote areas. With the rise of Industry 4.0 and IoT, there is an increasing awareness of use cases that cut across manufacturing, oil and gas, aviation, maritime and several industry verticals, many of which are in remote areas and need reliable connectivity. In one recent example, Softbank in Japan has signed an MOU with a shipping line Mitsui OSK Lines and e5 Lab for maritime broadband communications at sea.
The fourth driver, albeit more of a supply side development, is the introduction of new chipsets and solutions from companies like Qualcomm, that recently announced new chipsets to “provide uninterrupted remote monitoring and asset tracking.” These new chipsets are an extension of Qualcomm’s recent launch of its Aware platform for IoT.
The biggest of these drivers in the short term will prove to be the telcos’ need for backhaul links, as they look to cast the net wider for consumer and enterprise connections. D2D will come along eventually, and despite some exciting demos like the Mediatek one we highlighted in the MWC23 note, the technology still has a way to go before it becomes mainstream. That said, we firmly believe that the satellite portion of NTN is much closer to reality than most currently are aware of.