Satellite and telco industry build alignment to capitalize on 5G

With TRAI’s recommendations to auction spectrum in the 27.5-28.5 MHz band, and space policy still awaited, Indian industry is waiting to unfold a USD 1 billion near-term annual revenue opportunity in broadband from space services, likely timeline being mid-2023.

For the promise of 5G to be fully realized, that is, nearly ubiquitous, instantaneous, connected for large numbers of devices globally, the terrestrial telecommunications systems, which heavily rely on buried fiber optic cables, will not be enough.

Instead, there will be a need to move from a largely separate satellite and terrestrial communications systems with satellites, used primarily for solving the last mile problem (areas where laying fiber was a physical or economic challenge) or for discrete use cases (e.g., processing credit card payments at gas stations), to an integrated 5G network of networks, where satellites play an increasing role alongside terrestrial networks.

While the utility of satellite communications is more limited within cities and in city-to-city communications, in areas where fiber and Wi-Fi already dominate and the lines of sites necessary for satellites are significantly reduced, integrating satellite and terrestrial systems will be necessary to meet the full spectrum of future demands likely to be placed on 5G networks. These include:

• Increasing traffic and number of connections outside of dense city centers in more rural and remote areas with the proliferation of Internet of Things (IoT) devices;
• Providing coverage for devices on the move (such as a ship at sea or a car driving across the United States); and
• Processing and data caching pushing progressively closer and closer to the networks’ edge (i.e., edge computing) and farther away from areas of dense fiber availability.

Take, for example, the connectivity needs of mobility. If you disconnect a mobile asset (car, truck, plane, drone, ship) from the fiber network, you can still keep it connected by Wi-Fi and terrestrial 5G infrastructure so long as it is in, or is in close proximity to, cities. But as you move to rural and remote areas, only satellite communication has the potential to provide reliable coverage and sufficient data density. As the numbers, uses, and requirements of connectivity continue to evolve, so does the importance of extending the promise of 5G networks beyond the urban and densely networked communities.

To meet these demands, satellites will need to serve a diversity of purposes ranging from the last-mile problem to connections on the move, redundancy for critical emergency services, edge networking, and IoT dense-traffic areas outside of the already highly networked cities.

Satellites have a major role in determining the collective 5G future. How terrestrial and space-based components are integrated will determine the type and degree of connectivity 5G networks enable in practice.

5G represents more than just an important shift in the possibilities for, functions of, and the hardware-software interplay in mobile telecommunications networks as we moved from legacy generations, such as 3G and more modern generations like 4G LTE and now to 5G. 5G also represents an opportunity for a shift in the relationship between terrestrial and space-based communications systems more broadly.

And, importantly, for the first time, an evolution of the underpinning technology (primarily satellite and launch technology) and the business models of satellite companies (including satellites as a service) makes this integration both technically possible and economically feasible.

This shift can be seen today by the emergence of companies like SpaceX, OneWeb, AST SpaceMobile, and Project Kupier, who seek to create disruptive business models in low earth orbit (LEO), as well as more traditional geosynchronous (GSO) providers like Telesat and ViaSat that are adapting their infrastructure and satellite capabilities to compete for market share with the proliferated LEO providers.

Satcom services, once miles behind the telcos, are progressing fast. For many years, satellite solutions were only an alternative when other options were not viable technically and/or economically. With different technological innovations in the satellite industry, the satellite operators are providing what mobile operators really need. These include all the benefits of statistical multiplexing without limitations on inbound routes, number of stations per channel, number of channels a station can use, QoS functionalities in-line with what they already use in their networks, flexibility in topology allowing changes at any time, and an efficient pay-as-you-grow solution without large upfront investment and unused capacity.

Satellite operators have been working with mobile operators for many years now. For the former, it has been a lucrative business with highly desired customers; for the latter, it has been the option chosen last. When compared to mobile’s own transmission networks, based on high-throughput, low-cost optical networks, satellite has been characterized as an expensive, delay-introducing medium with limited throughput, to be used only when necessary.

The nature of the relationship between telcos and satellite is changing, and latency is key. Telcos and the satellite industry are set to work together, with telcos incorporating satellite technology into their network rollouts. The companies coming into the satellite sector are more tech companies and their heavy investments into satellite are changing things for everyone else. This strategy represents a game changer. These companies are adopting a new distribution model to go to market, and commercializing the huge volume of capacity available. The telcos adapt to this new ecosystem and establish an agreement as reseller of these services.

Satellite industry advancements over the years have reduced bandwidth prices. The emergence of lower-cost high-throughput satellites (HTS), for instance, has made satellite a more economical solution, even in low-revenue developing economies.

The MEO constellations provide low-latency and high-throughput data rates up to 1 Gbps to a single site. As backhaul networks rapidly transition to 4G and the installed base continues to expand, satellite mobile backhaul offers opportunities in all regions. Small cells, which are low-power, short-range wireless base stations that cover small geographical areas, will play an increasingly important role in satellite mobile backhaul growth, as lower costs expand the addressable market to areas previously uncovered. Lower capacity prices, an enhanced ground segment, and small cells will make it possible for telcos to earn positive returns, particularly in remote locations.

Satellite providers can also provide a more cost-effective managed-service model that aligns with telcos’ business requirements and empowers them to extend networks into underserved areas. Managed solutions from satellite providers that combine dynamically allocated capacity with an optimized network infrastructure help telcos deliver bandwidth seamlessly and efficiently to wherever it is needed.

There has never been a better time for telcos in the Asia-Pacific region to look at how satellite-enabled mobile backhaul can help expand reach and data capacity to end-users and enterprises adopting edge-hosted applications, while continuing to support the fulfilment of universal service obligations (USOs). The managed mobile backhaul solutions reduce the risks involved with providing broadband services for telcos, accelerate revenues for 2G, 3G, and 4G/LTE services, and simplify these services under a single, robust service-level agreement (SLA). Satellite mobile backhaul needs will only continue to grow as 5G becomes more widely available.

The future traffic growth is expected to be driven by more smartphone subscriptions and an increase in average data volumes per subscription. Upgrading mobile networks to 4G and 5G will also contribute to greater demand for enterprise bandwidth, particularly as the use of IoT devices across industries grows.

To be prepared for this reality, telcos need to provide the same quality of bandwidth in less populated areas as urban centers, since people generally use the same amount of data. Advancements in satellite technology, paired with managed mobile network solutions, give telcos increased capacity, performance, and flexibility in an optimized network infrastructure.

Yet, it is not widely appreciated how disruptive 5G will be for the satellite industry. On one side, there is infrastructure, how backhaul, how private networks, mobility will integrate with the main telecom ecosystem. The telcos will be able to manage satellite networks with their own network management systems. This is the basic concept of 5G, on the backend of the infrastructure.

Then, there is the direct satellite-to-device technology. There has been a lot of traction here and this could be massive for the satellite industry, both in terms of IoT and connecting devices.

Having said that, the relationship between satellite and telcos remains far from easy. It seems telcos do not like satellite very much. This has always been the case. It had always been about high cost, high latency, and generally limited bandwidth. They only used satellite when they had no other choice. It had been VSATs for 30 years. Telcos preferred a microwave link. It is interesting when a SpaceX (Starlink), Amazon (Project Kuiper) or OneWeb comes in with lower-latency services. If the cost per bit and the throughput are much closer to what they are used to, then it might change. It might just change their view!