Constellations recently spoke with Northern Sky Research (NSR) Senior Analyst Lluc Palerm, and Kratos Vice President of Product Management Chris Boyd, about the satellite industry’s growth, and the huge market potential available if it can better integrate with the global telecommunications market. Taking place at Satellite 2022, the conversation built on NSR’s recent report “Telecom-Satellite Digital Network Integration: The Keys to New Market Opportunities.” With satellite holding a mere 1% share of global telecom, it explored how the industry can access these expansive new markets, and the key technologies that satellite service providers will need to adopt to more seamlessly tie-in with telecom providers to realize this potential.

Moving beyond the past

Asked which factors have limited satellite’s integration with telecom and what’s been changing more recently, Palerm of NSR noted the dramatic improvements in satellite performance and economics. With prices of satellite capacity and equipment going down, “it's now possible to serve a rural community, for example, with a much more economical solution via satellite.”

Boyd agreed about cost, while also pointing to the siloed nature of satellite operations, with stove-piped systems and proprietary technologies at the integration level as barriers.

“With exponentially more capacity coming online driving the cost down, satellite is more attractive to businesses for certain use cases,” Boyd said. “That's starting to get the attention of the telcos to say, ‘I can now adapt that to the mainstream technologies, but only if I can integrate it with my current business, with my current workflows and orchestrations, and only if I can do it at scale.’”

Noting how satellite as a business coexisted with telecom in the past before the gap widened, Boyd added, “Back in the day, they actually could do it pretty well. But as the telecom business has scaled and automation has crept in, the satellite industry hasn't really embraced a lot of the automation, with the buzzword being orchestration. So, those are some of the pieces that we're working on as an industry.”

Going where the opportunities are

Looking forward, Constellations asked which market opportunities satellite operators and telecom carriers should jointly pursue. Palerm played down the notion of chasing new, disruptive markets in favor of focusing on existing, underserved ones.

“I think it's going to be pretty much the same kind of applications that the industry serves today, but the scale is going to be totally different. For example, in cellular backhaul, where we do a lot of research, there is a huge potential for improvement,” said Palerm. “We think that there are 22 terabytes per second of addressable market compared with the three terabytes per second of supply that we currently have in the industry today. That’s 10 times more capacity than supply, and that’s just for backhaul. Then you have other use cases like in-flight connectivity, maritime, all these kinds of services that the telco industry is looking forward to better serve.

Boyd added that for the opportunity to make sense for telcos, it would need to match their existing product suite. “The opportunity here is to look at net new business together, not stealing from other markets that satellite already has, or where satellite is obviously the only one able to deliver those types of services. So, net new opportunities where we can align the order management, the provisioning, the scale factor that Lluc mentioned, is really key. The telcos are going to look to both an operational configuration but also the actual technology alignment.”

Asked what it would take for satellite to align and more seamlessly interoperate with carrier networks, Boyd cited the importance of standards, specifically the adoption MEF, a set of carrier ethernet standards managed by the Metro Ethernet Forum or MEF.

“MEF aligns methodologies to provide carrier class ethernet services, map critical aspects of Quality of Service, guaranteed bandwidth, and more,” Boyd explained. “What's critical about carrier ethernet is as a customer connects to a terrestrial carrier ethernet, there's a defined service architecture that they get. Also, providers can exchange services from one operator to the other on a similar or the same service definition or service architecture. So, it allows a specific way for us to transport the customer's traffic over a technology agnostic layer.

“For telcos,” Boyd continued, “that means the access layer for satellite won’t look any different than a fiber link or a terrestrial copper link. So, aligning with the standards is important for the satellite industry so that we’re all talking the same language.”

More change needed on the Ground

In addition to carrier ethernet for integrating satellite and telco networks, Constellations asked what other changes would be needed, for example, whether provisioning satellite resources and services would need to be done differently or faster than in the past?

“There are lots of dynamics in satellite, where provisioning isn’t like a piece of fiber or copper,” said Boyd. “The satellite has its configurations, and the ground system has its configurations, and with the shift to software-defined payloads, services can now adjust at any time. And so, we're seeing a fully dynamic scenario. If the satellite plan changes, the ground system has to quickly match it. And if we want to change the configuration of all of these elements, the key to do this at scale is through automation.

He continued, “the next thing to achieve scale includes digitizing the spectrum. There's a number of things occurring in the industry now to take the intermediate frequency (IF) from analog to digital. And that's critical because as you re-groom the satellite, we need to re-groom the IF uplinks and downlinks to match those processes. So again, going back to the business cases, with the satellite being dynamic and the ground needing to change quickly, those are going to force automation. And to do that, you've got to take the humans out of the loop and do this through automated processes.”

Palerm added, that in addition to changing satellite infrastructure, that “the industry also needs to think how to make it easier for mobile operators and the general telco ecosystem to adopt satellite.

“We're now at a point where to achieve some of this dream that we have about integration, we have to follow what the telco industry has done. They have also automated their digital layers, the software, the software radios. So they're already expecting that from us to be on the level playing field.”

Looking down the horizon

Palerm was asked to give his analyst outlook on how the role of satellites will change in the telecom service ecosystem over the next five years.

“I think we are in a very good time. I'm very positive about the future of the satellite industry. Think about all the players that are now getting interested in the satellite industry. You see all the big telco operators now signing partnerships with the satellite industry. That's very encouraging and we see a lot of growth in verticals, again, like backhaul, mobility, private networks. We think that the industry is going to grow quite rapidly in the coming years,” said Palerm. “Again, we'll continue to be a small share of the total telco ecosystem, but even if you grow from 1% to 3% or 5%, it's a massive opportunity for the satellite industry.

Boyd agreed, adding that “if you look at the telco industry, they have a long set of standards and technologies that they've rallied around. Five years ago, satellite would not have been even considered in those standard bodies. So, for example, in the MEF, Metro Ethernet Forum, there was not a satellite performance tier, so you actually could not achieve a certified service through MEF using satellite because the latency profiles of the GEO satellites.

“And similarly in 3GPP, which is the driver behind 4G and 5G standards, they have also adopted things

to accommodate satellite in the non-terrestrial network, which is a part of release 17. So what we're seeing is now the telco standards bodies accommodating satellite as a technology given our inherent physical attributes.

“That's really key,” Boyd continued, “they’re starting to acknowledge that we're becoming viable to them, and then starting to align.”

Click here to listen to the full interview.

Click here to obtain a complimentary copy of the NSR report, “Telecom-Satellite Digital Network Integration: The Keys to New Market Opportunities.”