Low Earth Orbit Satellite Constellations Top of Mind at Satellite 2015

“Constellations,” in satellite industry parlance, are top of mind at Satellite 2015. The immediate reason is a sudden upsurge of low earth orbit satellite ventures that is bringing with it fears about overinvestment, overcapacity, plunging capacity prices and market share disruption.

Not for perhaps a couple of decades have such issues been so “top of mind” in the satellite segment of the communications industry.

The reason for the sudden eruption of talk about the impact of new constellations is the threat of industry disruption that happens in any capacity-related industry when suppliers use new technology to support mas market business models built on lower capital and operating costs, allowing new lower retail prices, leading to more price competition, at the same time also offering better performance and user experience.

It’s a recipe for potential disruption.

Consider consumer Internet access by satellite, which has one level of current offers the upstarts threaten to overturn.

Asked about the challenges of supplying Internet access across South Asia and Southeast Asia, where hundreds of millions cannot afford to pay 41 cents a month for Internet access,
Dave Bettinger, OneWeb CTO quipped off stage, we’re talking about “15 cents a month” as an “ability to pay” hurdle to be overcome.

That is an issue incumbent satellite service providers will have to confront, assuming there are at least some winners in the emerging LEO segment of the business.

No geosynchronous satellite Internet service provider can afford to sell retail access at such prices. To be sure, geosynchronous providers will be working on getting their own cost structures down.

The issue is how much more performance they can wring out of their operations.

That isn’t the only potential threat to existing providers. Latency always has been an issue for services based on use of geosynchronous satellites, especially for isochronous apps (events or sessions that rely on equal time periods) such as interactive apps such as videoconferences or voice.

That is another area where LEO constellations will be a new threat. Operating at lower orbits, LEO satellites will feature lower latency than geosynchronous service providers can provide.

Caching helps with user experience in some cases, but encrypted HTTPS is a problem, compared to non-encrypted traffic, said Dave Rehbehn, Hughes Network Systems senior director. And the problem is growing, since more traffic is being encrypted.

HNS has a way of improving user experience by pre-fetching some web page elements, for example.

The unanswered question is what “outside the industry” developments might shape LEO success as “outside” developments once lead to the demise of Globalstar, Iridium and Teledesic (early LEO business plans and entities).

Rapid mobile adoption basically killed the earlier generation of LEO business plans and companies, argued  David Burr, O3b VP, essentially absorbing the demand the earlier LEO connectivity providers had hoped to serve.

“Where is that danger now?” Burr asked. Some of us might argue the answer is the same as last time: mobile service providers.
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