Commercial Satcom Sector Should Address Developing World Opposition

Faced with an increasingly antagonistic developing world, the commercial satellite industry must do a better job selling itself and its benefits, NTIA senior spectrum advisor Scott Blake Harris said Tuesday during Access Intelligence’s Satellite 2024 conference in Washington. Regions that feel left out by the low earth orbit satellite boom expressed hostility toward LEO issues during the 2023 World Radiocommunication Conference, he said. Throughout the day, multiple satellite operators and space industry experts mentioned the developing world as a large potential target market, particularly for satellite broadband. Harris said he’s concerned that the ITU and regulatory processes could delay existing satellite systems and development of new ones. Between now and WRC-27, the satellite industry must convince the developing world “it has something to offer."

The day also saw debate about the future of geostationary orbit (GSO) satellites, discussions about the viability of competing with SpaceX's and Amazon's forthcoming mega constellations, and potential satellite industry M&As.

Harris criticized the satellite industry for not having crafted an agreement before WRC-23 on potential changes to equivalent power flux density limits that non-geostationary satellite operators must adhere to. Industry infighting at WRC-23 "was terrible," he added. Many expect that NGSO and geostationary orbit (GSO) interests will be fighting over EPFD limits for years (see 2402200005). While there’s no WRC-27 EPFD limits agenda item, the next WRC participants will decide whether WRC-27 acts on limits, Harris said.

Concerns about some LEO orbital shells effectively tied up by one or two giant constellations are "overblown," Harris said as he made an optimistic argument that science will solve such issues.

Don't expect a growing SpaceX's Starlink to become a fierce head-to-head competitor with terrestrial telcos, SpaceX President Gwynne Shotwell said. She said Starlink broadband is best suited to suburban and rural markets, though “at some point there might be some competition” with terrestrial providers. Like others, she said the developing world represents a “gigantic market.” She said: “There are a lot of [satellite] players, but there is a lot of room.”

Starlink is likely to turn profitable as soon as this year, 2028 on the outside, Northern Sky Research’s Chris Baugh said. NSR analysts said there’s room -- and possible profitability -- for commercial LEO constellations beyond Starlink and Amazon’s Kuiper, though the big challenge in competing with them is offering a compelling alternative service. Baugh said that by 2033 Starlink and Kuiper combined will likely have 36 million residential broadband subscribers. He said that by that point their networks will start facing congestion problems. He said the competitive opportunity for broadband competitors to those mega operators lies in the developing world. NSR analyst Jose Del Rosario said LEO broadband constellations competing with Kuiper and Starlink can be financially successful, but that will require aggressive cost controls, global brand value and wide market access.

Asked whether SpaceX is likely to jack up broadband prices once it forces out competition, Del Rosario said Starlink likely wants to dominate the marketplace, but competitors "have to compete" and match the value proposition it offers.

Pointing to its forthcoming Lightspeed LEO constellation, set to start service in 2027, Telesat CEO Dan Goldberg said that while he wished it could roll out sooner, today's "huge market ... will be bigger still" by then. With customers wanting a diversity of connectivity suppliers, "a lot of us can do great business up there" and achieve good returns as the satellite connectivity market grows, Goldberg said. Echoed SES CEO Adel Al-Saleh, "There is plenty of space for all constellations, all orbits."

Geostationary Legs

GSO operators and space industry experts were bullish on GSO having long legs for years, but there were disagreements over specifics. Telesat's Goldberg said point-to-multipoint video distribution will continue to be an anchor of GSO operations. Al-Saleh was similarly upbeat about GSO as a video distributor even as streaming gains momentum. Astranis CEO John Gedmark said he was more bearish, citing connectivity to close the world's digital divides being a far more important market.

While LEO is ascendent in the satellite universe, GSO satellites aren’t facing an expiration date and will coexist with LEOs as part of multi-orbit offerings, said NSR's Del Rosario. But the GSO heyday has passed, with fewer GSO launches in the future, he said.

The satellite industry “is a little crowded," with a lot of capacity going live soon, said Al-Saleh. Pointing to what he said was the company's strong balance sheet, Al-Saleh said SES “is absolutely looking at different [M&A] options." Intelsat CEO David Wajsgras reiterated that he also expects to see consolidation both among large legacy players and new entrants (see 2403180013).

One hurdle to M&A deals is the broader economy, NSR's Baugh said. The cost of financing a deal is "wacky," and valuations aren't realistic, he said.

Notebook

Opening the 17 GHz band to non-geostationary orbit satellite operations is a top priority for the FCC, and a draft order should come this year, FCC Space Bureau Chief of Staff Kerry Murray said. The commission has seen "a lot of interest" from other regulators about its supplemental coverage from space framework adopted last week, she said (see 2403140050).

SpaceX's Starship test flight last week was "incredibly successful," with the fourth test launch of the heavy rocket aimed for early May, SpaceX's Shotwell said. She said SpaceX likely won't deploy satellites on that flight, focusing more on testing reentry capabilities. She said SpaceX isn't focused on a Starlink spinoff and an initial public offering soon. SpaceX also has seven manned missions using its Dragon rocket scheduled for this year, she noted.

In-flight connectivity is "no longer optional” and needs to be as robust as on-ground connectivity, said Glenn Latta, managing director-inflight entertainment and connectivity, Delta Airlines. Estimating per-customer bandwidth needs are a challenge, he said. Delta and Hughes in November announced a deal that will see Delta using Hughes in-flight connectivity on more than 400 regional jets in North America. Hughes Chief Operating Officer Paul Gaske said video streaming is driving the demand for greater in-flight capacity.