LEOs line up to serve increased bandwidth demand

13 September 2021 | George Malim

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From Elon Musk and Sunil Bharti Mittal to the British government, investors have committed billions of dollars to rolling out low earth orbit satellite constellations, but substantial challenges remain in revenue generation, regulation and productivity, writes George Malim.

In contrast to geostationary earth orbit (GEO) and medium earth orbit (MEO) satellites, low earth orbit (LEO) satellites are far closer to the surface of the earth and typically involve lower cost for hardware, launch and operation. However, this is offset by shorter satellite lifespans and the fact that LEO satellites are mobile, so their coverage moves across the globe. This means they are not able to provide coverage to all areas where there is demand; therefore, they can be utilised for the less time than geostationary satellites, which have been positioned in order to target locations with high levels of demand.

“The obvious difference between LEO, MEO and GEO is how far away each orbit is from the surface of the planet,” explains Gavan Murphy, director of marketing for EMEA at Globalstar. “Our satellites in LEO are 1,414km high, while a satellite in GEO is at an altitude of approximately 36,000km above sea level. The technical architecture and operational cost base of fleets of satellites vary greatly, with some applications best suited to LEO while others fit better with GEO or other network types.”

Murphy highlights television broadcasting as a prime example of a GEO application, because signals need to be able to continuously reach a population of satellite antennas within the spacecraft’s footprint. He adds that Globalstar traditionally utilised its LEO satellite fleet to provide services to consumers, but now has expanded its offering to address Internet of Things (IoT) applications, such as asset tracking and lone worker support. The company has customers in industries such as oil and gas, alternative energy, agriculture, transportation and construction in addition to military and government organisations.

Satellite communication has the strongest attraction in markets where there is no terrestrial alternative, such as in-flight or maritime communications, or where the cost of terrestrial connections is prohibitively expensive because the density of demand is low. LEO satellites are seen as a means to cost-effectively provide bandwidth to these markets, but multiple satellites are required to cover a specific area because of the mobile orbit of LEO satellites. This results in decreased utilisation in comparison with GEOs, as satellites move to cover areas with low or no population and therefore no bandwidth demand.

This decrease in productive time is one the most significant challenges facing LEO satellite providers. “LEOs are just a satellite at a different orbit, but there are some really big differences because of those orbits that impact productivity,” says Mark Dankberg, the executive chairman of Viasat. “The single biggest issue is that, while LEO orbits are lower – so the round-trip distance is shorter, which lowers latency – only GEO satellites have the geosynchronous capability, where a satellite appears to stay in the same place in the sky, which means you can aim bandwidth to where there is demand. With LEOs you get advantages by being closer to the Earth, but the disadvantage is that for a large amount of time you see very little demand.”

Dankberg points out that land covers 30% of the planet and 95% of the population live on 5% of the land, with 80% of the population in the northern hemisphere, underlining the extent to which LEOs will often not be covering areas of large demand at a given time. This effectively limits the productivity of LEO satellites in terms of their ability to deliver bandwidth where it is needed and to generate revenues from that. This limitation is compounded because LEO satellites have a far shorter operating life (three to five years) than a typical GEO satellite (10-15 years).

He also has concerns that, in contrast to the ITU-administered GEO market, the nationally regulated LEO market will result in a fragmented approach to awarding slots to LEOs. There is currently no protocol to define how a LEO satellite will avoid interfering with another one and there are no globally accepted guidelines.

That’s the bad news, but Murphy is keen to emphasise the LEO upsides. “More LEO satellites are required to provide the same coverage as GEO satellites, but the spacecraft are smaller and are less complex, with fewer components, so they are less expensive to build,” he says. “They are also lighter, making them more economical to launch and to replace. These factors help to keep operational costs for the LEO fleets lower than for GEO, and consequently service prices for end users can be lower.”

Service reliability is improved using low earth orbit, says Murphy. “It’s simple physics: with LEO, because the satellites are moving relative to the planet, there are fewer hand-offs for calls or transmissions,” he adds. “When a LEO satellite picks up a signal, it delivers it directly to a gateway. The fewer the hand-offs, the better the reliability; and while geostationary players argue about the effects of weather, smaller LEO satellites just get on with the job.”

Dankberg, who is launching Viasat’s new ViaSat-3 constellation of GEO satellites, fears the limitation on the time during which LEO satellites can generate revenue places substantial challenges on the business case.

“The entry fee to the LEO market is several billion dollars, but trying to get a good return on capital is hard because the growth in bandwidth demand and reduction in value mean you can’t monetise the constellation sufficiently to cover the debt,” he explains.

“You will need hundreds – or, at very low altitude, thousands – of satellites to serve all the places you need to cover; and even then, productivity may be only 10% or 20%. GEO takes one satellite to provide continuous coverage and it will last 15 years. In addition, if you design it well, all of it will be used to provide productive bandwidth.”

Each technology has its merits; and with thirst for bandwidth unquenched and likely to increase as IoT connections take off, the ability of LEO to cost-effectively serve previously unaddressed parts of the planet might mean the multi-billion-dollar bets could still pay off.