NGSO broadband constellation operators discuss the keystones to global connectivity at World Satellite Business Week in Paris, France, Sept. 13, 2023. (Source: screenshot WSBW/Euroconsult)
PARIS – Telecommunications satellite operators, traditionally fiercely proprietary and competitive, will increasingly have to work together, in some cases across multiple orbits, to contend with declining bandwidth prices and an ongoing market shift from broadcast to broadband data services.
The trend, already manifesting itself as new services from nongeostationary orbiting (NGSO) constellations disrupt the market, is driven largely by customer demand, delegates said during panel discussions at the World Satellite Business Week conference organized by Euroconsult. It comes amid what many in the industry see as an inevitable convergence between the space and terrestrial communications grid.
“We really think the power of multi-orbit is going to be a game changer – it’s going to be very, very powerful,” Massimiliano Ladovaz, chief technology officer with broadband constellation operator OneWeb, said during a panel discussion of NGSO operators. “The customer is asking for that—it’s not us just making it up.”
London-based OneWeb, which is beginning to roll out service from a constellation of some 640 satellites in low Earth orbit (LEO), is nearing closure on its planned merger with geostationary satellite operator Eutelsat of Paris.
Ladovaz cited the aviation market as a key example of where customers are demanding multi-orbit connectivity. “We have a LEO terminal; the customer wants a LEO-GEO” terminal, he said.
Maritime markets, in particular cruise ships, are another major driver for multi-orbit connectivity. During the conference, SpaceX, operator of the 4,500-satellite Starlink LEO broadband constellation, and SES, which owns satellites in GEO and medium Earth orbit (MEO), announced an agreement to provide combined services to cruise ship operators. The development raised some eyebrows because vertically integrated SpaceX has been known for its go-it-alone approach to customers.
“Really, this was customer pull,” John-Paul Hemingway, chief strategy officer at Luxembourg-based SES, said, adding that Starlink and SES’s O3b MEO constellation bring different strengths to the table. For example, Starlink, with its high data speeds, is ideal for many passengers, whereas O3b’s uplink capacity might better support ship operations, he said.
“I think what we put together was something we probably would have struggled to do independently,” Hemingway said.
The agreement calls for the partnership to deliver 3 gigabits per second of data to cruise ships, something that Hemingway said SpaceX and SES could provide on their own. But the hybrid solution delivers the best of both worlds, Hemingway said. “Ultimately it’s a signal of a new kind of partnership in the industry,” he said.
The arrangement represents a departure of sorts for SpaceX because SES will manage the service. Until recently, Hawthorne, Calif.-based SpaceX has avoided resellers, preferring instead to work directly with its customers.
Jonathan Hofeller, vice president of Starlink and commercial sales at SpaceX, said the company in the last year has begun working more closely with resellers, who can provide value-added services including cybersecurity, installation and customer support.
Starlink’s undeniably disruptive impact was a major topic of discussion during a Sept. 12 panel of regional geostationary satellite operators, who are pivoting toward data services amid declining bandwidth prices and the steady erosion of traditional broadcast markets.
“Like other operators, we definitely feel the pressure from Starlink operations, particularly in our traditional market in Indonesia,” said Huang Baozhong, executive vice president of sales, marketing, and legal affairs at Hong Kong-based APT, which operates five GEO satellites serving Asia, Africa and the Middle East. Starlink “has greatly changed the expectations of the customers by packaging low prices with easy installation and those kinds of things,” he said, adding that GEO operators nonetheless retain certain advantages in some markets.
Satellite operators at WSBW acknowledged the stuff competition with SpaceX’s Starlink. (Source: Hadrian/Shutterstock)
“Something that is a surprise for all of us is their speed – they are faster than expected,”
said Miguel Angel Panduro, chief executive of Madrid-based Hispasat, a GEO satellite operator that derives most of its revenue from Latin American markets. Starlink initially was focused on delivering high-speed broadband services to consumers but is now getting more into the enterprise markets prized by GEO operators, he said.
“In our view, the future of satellite services is in having multi-layered solutions, adapting MEOs and LEOs and GEOs, depending on the optimization for market requirements,” Panduro said. “There’s a lot of work to do in the coming couple of years.”
Notwithstanding the hype surrounding the NGSO market, Sulaiman Al Ali, chief commercial officer of Abu Dhabi-based Yahsat, which operates five geostationary satellites providing fixed and mobile services in the Middle East, Africa, and Asia Pacific, said the costs of deploying and refurbishing large constellations does not justify the return. Consequently, he said, operators are beginning to shift toward “multi-owned constellations” that will deliver better economies of scale. The concept is analogous to GEO operators hosting payloads for other companies, he said.
Alhamedi Alanezi, chief executive or Riyadh, Saudi Arabia-based Arabsat, envisions more collaboration not just across orbits but also between operators serving different regions or even competitors. Arabsat primarily serves the Middle East, Africa and parts of Europe.
Regional operators also are responding to current market dynamics by moving down the food chain into managed services, rather than merely providing bandwidth.
“From an Arabsat perspective, we’re looking to companies in Asia and companies [in] the Americas in order to provide full managed services so it will be transparent to the end consumer,” Alanezi said. “Travel is increasing, and people are now traveling from one country to another, so it becomes really valuable for satellite operators to provide managed services together.”
Meanwhile, GEO operators aren’t the only ones feeling the heat from LEO, Alanezi said. SpaceX, which has enjoyed a first-to-market advantage, will soon have to contend with OneWeb and others poised to enter the competitive arena, he said.
“There will be a lot of competition between them and that will impact the profit for them and impact the services,” Alanezi said. “Saying that doesn’t mean we will not suffer from this—we will. But I think we will have the capacity to provide services to many of these customers and countries, especially governments and oil and gas [companies], who need secure speed with cost-effective services.”
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