How to Capitalize on the Blossoming LEO Satellite Communication Services

Low Earth Orbit (LEO) satellite services have increasingly amassed favorable perception in the global wireless communications sector due to their technical and economic benefits. The global Satellite Communications (SatCom) industry is headed for convergence with Terrestrial Networks (TNs) and Mobile Network Operators (MNOs)—potentially disrupting the telco space.

Market Overview

• Low Earth Orbit (LEO) satellite services have increasingly amassed favorable perception in the global wireless communications sector due to their technical and economic benefits.
• The global Satellite Communications (SatCom) industry is headed for convergence with Terrestrial Networks (TNs) and Mobile Network Operators (MNOs)—potentially disrupting the telco space.
• In 2021, there were 10.85 million Geostationary Earth Orbit (GEO) satellite subscribers, which is 86% of the global market. LEO and Medium Earth Orbit (MEO) satellite subscribers stood at 968,000 and 743,000, respectively.
• By 2030, the situation will change substantially as there will be more than 27 million LEO satellite subscribers, which will account for more than half of the worldwide SatCom market. GEO will be tailing closely behind LEO with 25.5 million satellite subscribers. MEO is on the decline, with a Compound Annual Growth Rate (CAGR) of -2% between 2022 and 2030—decreasing to 637,600 subscribers.
• Breaking down satellite communicationsservice subscriptions by service type, ABI Research estimates that satellite subscribers in the Internet of Things (IoT), broadband, and Non-Terrestrial Network (NTN) mobile service segments will grow from 7.6 million subscribers to 29.4 million subscribers, 3.5 million subscribers to 12 million subscribers, and 1.45 million to 11.8 million, respectively, from 2021 to 2030. The CAGRs for the 2022 to 2030 period are projected to be 27%, 16%, and 15%, respectively, for NTN mobile, the IoT, and broadband.
• Land-fixed (fixed ground positions) subscribers are estimated to grow from 5 million subscribers in 2022 to 23 million subscribers in 2030, accounting for a CAGR of 21%.
• Land-transportable satellite subscribers will grow from 3.7 million subscribers in 2022 to 11 million subscribers in 2030, accounting for a CAGR of 15%.
• For the marine operational domain (maritime vessels or oceanic environments), the number of SatCom subscribers will increase from 3.2 million subscribers in 2022 to 3.7 million subscribers by 2030, accounting for a CAGR of 20%.
• Finally, satellite communications service subscribers in the aeronautical domain will increase from 2.9 million subscribers in 2022 to 5 million subscribers in 2030 with a CAGR of 7%.

“The demand for satellite communications services via LEO satellite links will continue to build steadily. The SatCom subscription via LEO links market is expected to record a CAGR of ~44% during the forecast period of 2022 to 2030. Factors such as the miniaturization of satellites, increasing demand and growing commercial use cases for LEO satellites across industries, substantial cost reductions, and the growing demand for ubiquitous, high-quality connectivity will contribute to the growth of the LEO satellite-based connectivity market.”  – Andrew Cavalier, Industry Analyst at ABI Research

Key Decision Items

Assess the Use Cases for LEO Constellations

LEO constellations are gaining further popularity in myriad services and vertical segments due to their core advantages of low latency and high-throughput proficiencies. Additionally, the smaller equipment footprint and relatively inexpensive satellite deployment make LEO more financially accessible to those interested in SatCom.

Needless to say, the following are some of the service segments of LEO:

• NTN Mobile: A two-way transmission of voice, video, and data communications with a satellite-to-mobile device (or space station-to-earth station) link for land, aeronautical, and maritime applications via the mid-band (1 –  6 GHz) and high-band (6 – 24 GHz) spectrums.
• Satellite IoT: Makes it possible for physical objects to be sensed and controlled remotely over a satellite network via embedded satellite-enabled terminals (learn more in the whitepaper: Satellite in IoT: New Satellite Networks for New Wave of IoT Investment).
• Broadband: Enables entry of the Internet for terrestrial terminals by using direct uplink and downlink capabilities via satellite.
• Satellite Backhaul: Alludes to leveraging a satellite transport network that connects the core network and the Radio Access Network (RAN) of the mobile network.

Take Note of Customer Pain Points

Customer enthusiasm for satellite communications services will boil down to the following factors:

• Price
• Return on Investment (ROI)
• Data throughput and volume needs
• Network reliability, latency, and criticality

In the consumer space, LEO services will be driven by gaming, Extended Reality (XR), live video streaming, Video-on-Demand (VOD), and other use cases with high network demands. Moreover, remote work from home, especially in rural or hard-to-reach locations, enabled by TNs, will be a key driver for subscription growth.

For enterprises, LEO satellite technologies will be a welcome addition to wireless network infrastructure. These satellite communications services will be the key to lighting up historically dark regions on the map. Keep in mind that 5G and hybrid networks, as they become more typical in developed and emerging markets, will necessitate improved network resiliency and omnipresent connectivity. Here, LEO Internet will fill in the previously unfilled gaps.

Analyze the Satellite Communications Service Provider Landscape

SpaceX’s Starlink LEO satellite fleet accounts for roughly a third of all satellites in orbit—making the Elon Musk-led company a SatCom leader. OneWeb and Eutelsat, two other leading satellite communications service providers on the market, announced a merger earlier this year that will conjoin OneWeb’s LEO satellites with Eutelsat’s GEO fleet. This newly formed multi-orbit conglomerate will contend directly with SpaceX’s Starlink fleet. Two other notable satellite communications service providers that are poised to be formidable foes of the aforementioned companies include Canadian LEO operator Telesat and Amazon’s Kuiper System. Telesat has more than 4 decades of telco experience, while Amazon’s Kuiper System will undoubtedly benefit from its deep pockets and resources.

Realize the Opportunities for LEO Satellite Providers to Partner with Telcos and Phone Manufacturers

Telcos and smartphone manufacturers have increasingly been partnering with LEO satellite service providers to bring satellite-to-mobile phone services to their subscribers. Operators like SpaceX, OneWeb, and Globalstar have been striking partnership agreements with major telco players, such as Vodaphone, Rakuten Mobile, T-Mobile, AT&T, Telstra, and Apple. Even smaller LEO startups, such as Lynk Global and AST SpaceMobile, have signed commercial agreements with a number of telcos.

These alliances make it clear that the road to satellite-based smartphone solutions is being paved. These solutions will entail global network access through hybrid networks achieved by means of TNs and NTNs.

Another area of inquiry among satellite providers is broadband. The International Telecommunication Union (ITU) estimates that 34%of the world’s population has no Internet access. Unserved and underserved regions are a golden opportunity for satellite communications service operators to provide low-cost, high-speed Internet to expand global coverage.

Below are several recent SatCom/telco partnerships that have been in the press this year:

• T-Mobile Chief Executive Officer (CEO)/President Mike Sievert and SpaceX Chief Engineer Elon Musk announced a plan to work together to expand cell phone connectivity.
• Vodaphone and AT SpaceMobile collaborate for a commercial mobile communication service that is space-based.
• Telefónica plans to work with domestic satellite operator Sateliot to expand Narrowband-IoT (NB-IoT) networks to remote areas.
• Apple invested in satellite service provider Globalstar to incorporate Emergency Save Our Ship (SOS) via satellite for the iPhone 14.

Navigate the Web of Satellite Regulatory Intricacies

As it relates to licensing and spectrum access for space and ground segments (e.g., terrestrial stations, fixed terminals, and Earth Stations in Motion (ESIM)), there’s a lot for satellite operators to ponder. Not only is this a lengthy process requiring the approval of national and international regulators, but different regions may have varying processes and requirements. In this respect, it’s recommended that LEO operators collaborate with local experts for the best guidance.

The scale of operations is a highly influential element in license acquirement and spectrum allocation. LEO startups will find that obtaining ground licensing and spectrum for space services is a faster and more cost-effective process than planning for labyrinthine missions requiring enterprise-level security, data processing, and networking capabilities.

To avoid launch schedule delays, LEO operators must carefully coordinate ground and space segment licensing so that national and international policies are being followed correctly. Satellite service providers might find it useful to lease portions of space operations (i.e., ground stations or satellite capacity) to reduce upfront costs, improve time to market, and improve the Quality of Service (QoS).

Key Market Players to Watch

• Amazon
• Bharti Airtel Ltd.
• Eutalsat
• GalaxySpace
• Immarsat Ltd.
• Iridium Communications Inc
• Kepler Communications
• Omnisapce
• OneWeb
• SpaceX
• Telesat
• Viasat, Inc

Dig Deeper for the Full Picture

Analyze the market for satellite communications services more intensely in ABI Research’s Low Earth Orbit Satellite Services and Outlook research report.

Not ready for the report yet? Check out the 7 Influential Satellite Communication Service Providers To Keep an Eye On in 2023 blog post. Or head over to the company’s Satellite Communications Research Service to check out similar content authored by our seasoned expert analysts.