Washington – A massive market disruption and new technologies are forcing a traditionally conservative and insular satellite industry to embrace virtualization and interoperability to survive and perhaps even thrive as a more integral part of the trillion-dollar global telecommunications sector.
The transition will not happen overnight, as sunk investments in hardware-based analog systems, often based on proprietary technologies, and painstakingly slow progress on interoperability standards act as barriers. But during numerous discussions here at the Satellite 2025 conference organized by Access Intelligence, there was a clear consensus among satellite service and technology providers alike that the industry must evolve sooner rather than later.
“Things are clearly changing,” said Gerry Collins, director of product management at global satellite operator Intelsat. Speaking March 12 at a private breakfast event hosted by satellite infrastructure provider Kratos, Collins noted what he saw as a new embrace of interoperability.”
“The era of reliance on closed ecosystems is coming to an end,” Collins said. “We are part of efforts across the industry to develop interoperable systems, to develop around and contribute to standardization and open standards, and adapt because of the massive disruption we’ve experienced in the past few years.”
Collins did not identify the source of the disruption because he didn’t have to. The competitive challenge posed by SpaceX, with its 7,000-satellite Starlink Low Earth Orbit (LEO) broadband constellation, has been a dominant industry theme for the past three years.
Panelists discuss the road to 5G with virtual ground at a private breakfast event during Satellite in Washington, D.C., March 12, 2025
Nathan de Ruiter, partner and managing director at Novaspace, a space industry consultancy, said during the breakfast that Starlink has indeed wrested market share from traditional satellite operators, particularly in the maritime and residential broadband markets. At the same time, he said, Starlink has opened up markets that previously were unavailable to the satellite communications industry.
The Virtues of Flexibility and Scale
To restore its footing in a changed environment, the legacy industry, traditionally reliant on geostationary-orbiting satellites, requires agility and scale. Part of the solution is software-defined, very high throughout (VHTS) satellites, which offer tremendous bandwidth and can be quickly reconfigured on orbit in response to shifting demand.
Stuart Daughtridge, Vice President of Advanced Technology at Kratos, said a digitized ground segment is necessary to take advantage of not only the huge capacity increase provided by VHTS satellites but also their ability to dynamically shift capacity as the market dictates. “If you can update your satellites on a regular basis…you need your ground system to be able to coordinate and be just as flexible,” Daughtridge said March 11 during a panel discussion.
Digitalization is an enabler of virtualization, whereby network hardware elements are replaced by software that can run generic computers connected to the cloud. This in turn enables service providers to scale quickly without massive investments in hardware to address market that rarely remain static, Daughtridge said. Ultimately, he said, the ground segment must scale not only to compete with the likes of Starlink, whose massive investment in terminals helped bring their unit cost down, but also to integrate more closely with the massive terrestrial telecom sector, whose sheer scale is the key to its service affordability.
Virtualization, meanwhile, is a precursor to interoperability standards that have long eluded the satellite industry but are widely considered essential to the sector’s future. Advocates attribute the mobile telecom industry’s runaway growth over the last few decades in large part to the universal adoption of standards that enable cell phones made by different manufacturers to connect instantly and seamlessly to different terrestrial networks across the globe.
Even satellite modem providers, long seen as an impediment to interoperability because their business model was built around proprietary hardware and software, recognize the need to change. “I think all of the next-generation systems are going to have to be virtualized so you can scale up or down quickly,” Don Claussen, CEO of modem provider ST Engineering iDirect, said March 12 during a separate panel discussion.
It Won’t Happen Overnight
While most experts believe virtualization and interoperability are inevitable, they acknowledged there are obstacles that will slow the pace of change, regardless of the urgency.
Michel Dothey, Co-founder and Commercial Director of OSS/BSS software provider NeXat, said cost is a key obstacle. As long as the existing analog infrastructure is working, little will change, he said during a March 11 digitization panel discussion. During the transition period, ground segment infrastructure might have to be compatible with both analog and digital operations, he said.
Another challenge has been multiyear delays to the large, software-defined satellites that will depend on virtualized, flexible ground networks to reach their full potential, Daughtridge said. “They were way harder to manufacture than people thought,” he said.
However, once these systems are launched in numbers, Daughtridge predicted there will be accelerated investment in software defined ground networks.
A number of industry groups are working hard on standards for digitization and radio frequency wave forms, but the process is complicated.
Greg Quiggle, Senior Vice President of Product Management at Kratos, cited the 3rd Generation Partnership Project (3GPP), which is currently developing 5G standards, including non terrestrial network standards that proponents say are key to integrating satellite into the broader terrestrial telecommunications grid.
“When you actually go to one of these 3GPP meetings, it’s hundreds of companies, thousands of engineers, working together to negotiate and work through key revisions in the standard in order to accomplish the right growth through new use cases,” Quiggle said at the Kratos breakfast event.
The prospect is daunting, Quiggle acknowledged. “But I will tell you that the value that comes out on the other end makes it well worth it,” he said.
Forging Ahead
Likely early adopters of virtualized, flexible ground infrastructure include the military, which has the budget along with a pressing need for agile, resilient architectures capable routing traffic through satellites in different orbits as well as terrestrial networks, experts said.
Daughtridge noted that the commercial remote sensing industry has already made the transition to virtualization because the economics did not support each operator owning and operating its own dedicated ground station infrastructure.
At some point, however, the satellite telecommunications industry will have no choice but to follow suit if it hopes to integrate with the wider telecommunications industry. Collins said that objective has been driving Intelsat’s strategy for the past seven to eight years. “The closer we can integrate with the mainstream telecommunications market and with the mainstream telecommunications carriers, the bigger opportunities we can address,” Collins said. “This can’t happen quickly enough for us.”
One thing the industry has in its favor is the ability to piggyback on the huge investments by the terrestrial telecom industry on 5G standards.
To start from scratch, or attempt to go it alone, is to invite failure, Collins said. “The only way is to find an ecosystem that allows us to jump up and start from somewhere really exciting,” he said. “There’s no other option. There’s no other way.”
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