A new generation of low earth orbiting (LEO) satellites is on the verge of competing with each other and with terrestrial approaches. An ABI Research LEO satellite broadband forecast calls for considerable growth for the technology.
In the past, GEO satellites have provided residential and business services to rural and remote customers. ABI says that while GEO satellites offer speeds faster than 100 Mbps, their distance from earth – 36,000 km – pushes latency to 600ms, which limits the applications for which they can be used.
LEOs, which reduce latency due to their lower orbits, may change the game. The biggest name is Starlink, which is part of Elon Musk’s SpaceX. It launched last year and so far has put more than 1,000 satellites in orbit. Plans call for it to serve more than 600,000 homes and business in the U.S.
SpaceX won $885.5 million to serve 642,000 locations in 35 states in the Rural Digital Opportunity Fund (RDOF) auction, which concluded earlier this year.
While SpaceX has made a lot of headlines, its success is not guaranteed. A report commissioned by the Fiber Broadband Association and NTCA-The Rural Broadband Association concluded that Starlink customers are likely to receive inferior service in areas it won the right to serve in the auction. The report was based on research by Cartesian.
ABI believes the market will reach 3.5 million subscribers this year and, with a compound annual growth rate (CAGR) of 8%, reach 5.2 million users in 2026. It will generate $4.1 billion that year, the firm says.
Amazon, another player with tremendous resources, has pledged $10 billion for the Kuiper project. Its FCC application said it would launch a fleet of 3,236 non-geostationary orbit (NGSO) satellites that would serve multiple world regions. All of the U.S. will be in its footprint with the exception of some areas of Alaska. The FCC order approving the application was issued in late July of last year.
According to ABI, Amazon has not yet confirmed a launch date for its first satellite.
“LEO satellites will play an important role in satellite broadband services in the years to come,” ABI Research Industry Analyst Khin Sandi Lynn said in a press release about the LEO satellite broadband forecast. “High Throughput
Satellite (HTS) LEO systems can support multi-Gbps speeds 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 low latency services such as online gaming and live video streaming.”
A bit of cold water was splashed on the LEO concept last June, when a report from CoBank Knowledge Exchange said that the sector faces considerable risk, including funding challenges. It suggested that Kuiper has the best chance of success.
The ABI report also mentions OneWeb and Telesat, LEO companies that will target business.
ABI points out that the satellite sector also will continue to face competition from terrestrial broadband providers, who will expand LTE and 5G fixed broadband and mobile networks. The cost and time associated with bringing those services to remote areas may tilt the playing field to satellite provider in those areas, ABI says.