In today’s economy, broadband internet access is an essential enabler for users of online government services and active participants of commercial eCommerce applications. While people in most urban settings may have access to affordable offerings, that’s typically not true for many rural residents.
There’s a significant need in most remote locations for high-speed internet connectivity. Demand for internet access via broadband services over both fixed and mobile networks has increased dramatically. Yet, despite telecom network expansions and upgrades, it’s estimated that only half of the households worldwide currently have access to fixed broadband services.
With the rollout of Low Earth Orbit (LEO) constellations, satellite broadband services could improve broadband penetration. According to the latest market study by ABI Research, the satellite broadband market will reach 3.5 million subscribers in 2021 — growing at a CAGR of 8 percent to reach 5.2 million users in 2026, and generate $4.1 billion in service revenue.
Satellite broadband service market development
“LEO satellites will play an important role in satellite broadband services in the years to come. High Throughput Satellite (HTS) LEO systems can support multi-Gbps speed per satellite. Orbiting around 800-1600 km from the Earth’s surface, LEO systems offer a major advantage of low latency between 30-50 milliseconds, enabling LEO broadband services to support live video streaming,” said Khin Sandi Lynn, industry analyst at ABI Research.
Traditionally, Geostationary Earth Orbit (GEO) satellites are mainly used to provide broadband services to homes and businesses in remote or rural areas where the deployment of mobile or fixed broadband connectivity is challenging.
Although GEO satellites support a viable speed for broadband internet access, their distance from the Earth surface — approximately 36,000 kilometers — creates a drawback of longer latency time at about 600 milliseconds, limiting the use of most applications requiring network low latency.
LEO satellite operator SpaceX first launched its Starlink broadband services to residential users in 2020, supporting 100 Mbps broadband speed with unlimited data caps per month. SpaceX has launched over 1000 LEO satellites and aims to serve more than 600,000 homes and businesses within the United States market.
SpaceX is now working toward the expansion of its Starlink broadband service to some markets in Latin America. Other companies, such as OneWeb and Telesat, have launched LEO satellites providing connectivity to the business market segment.
Amazon, which plans to launch LEO constellations named project Kuiper, received FCC approval for its project in mid-2020, although the first satellite launch date is yet to be confirmed.
As global internet connectivity becomes more pervasive, satellite broadband access will remain an important part of the wireless broadband market. However, there is still competition from terrestrial broadband networks, due to the continued expansion of fixed and mobile network infrastructure.
The expansion of LTE and 5G terrestrial wireless networks will challenge the satellite broadband industry by supplying fixed wireless access (FWA) services. However, the investment cost and time associated with terrestrial network deployments can limit availability in rural and remote areas.
Outlook for satellite broadband service growth
“Flexible packages and pricing could make the services affordable for users in both developed and emerging markets. Even though heavy subsidising of hardware costs may be required initially, the ability to boost adoption rates will help ecosystem development and eventually lower the hardware cost,” Lynn concludes.
Takeaway: I’ve been researching the LEO satellite communications sector since 1996, during my role while working on the Iridium project, and I’ve witnessed significant advancements in all the related space technologies. I’m now anticipating that more people around the globe can benefit from broadband internet access services within both under-served and un-served areas.
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