Satellite connectivity is making waves across the 5G telecommunications space as a viable data transmission path, but hurdles remain tied to spectrum, operation and business model challenges.

Dan Hays, partner at consulting firm PwC, noted in a recent interview with SDxCentral that his firm was “seeing a lot of focus and interest on this intersection between satellite and terrestrial networks.”

“Whether it's the companies that are doing (or aspire to do) direct-to-device satellite connectivity, or whether the mainstream satellite broadband players now have some potential overlap with the mobile guys, this is an area we're getting asked a lot of questions about just how is this all going to come together,” Hays said.

Some of this increased interest has come from standards bodies that have started to release specifications for integrating satellite communications into traditional 5G-based services. Standards body 3GPP included an initial integration path for “non-terrestrial network” (NTN) technology in its 5G-focused Release 17 last year. It’s expected to further that integration and capability with Release 18, which is expected to be frozen by mid-2024.

This has, in turn, helped drive deployments and integration plans from a growing number of satellite providers that are either already in the space or new entrants with ambitious plans. The 800-pound gorilla remains SpaceX’s Starlink service, which has started to gain traction in providing consumer and enterprise broadband services.

However, a handful of new players have also announced their satellite ambitions. ABI Research noted more than “70 satellite service providers currently providing services worldwide.”

Spain-based Sateliot, as an example, recently launched its first low-Earth orbit (LEO) satellite into space, the first step toward the nascent satellite communications provider’s plans to eventually have 250 satellites in orbit to support 5G-based narrowband IoT (NB-IoT) connections.

The satellite’s LEO orbit means it operates relatively close to Earth at a height of less than 1,000 kilometers and is able to make a full Earth orbit in around 90 minutes. This allows the Sateliot constellation to provide relatively low latency compared to satellites that operate in medium-Earth orbit (MEO) at the expense of coverage per satellite.

Sateliot is entering a market that ABI Research predicts could generate $141 billion in service revenues by 2030. The research firm cited market opportunities like IoT, backhaul, commercial broadband and mobile satellite services.

PwC’s Hays noted that this Cambrian moment will eventually crest.

“It feels like a very crowded market right now and, of course, this is one where we're still in the early days,” Hays said. “You basically have one really big global player (Starlink) that's come to commercial reality, but you've got others that are still in waiting and getting ready to launch, so that's super interesting.”

Traditional telecommunication operators could play a big role in that outcome.

“Looking at these market opportunities, a thought may arise whether satellite operators are trying to disrupt the traditional telecom market. But the reality is that telcos will continue to be the primary service provider for wireless access,” MTN Consulting’s Arun Menon wrote in a report.

“Telcos are also going to benefit from partnerships with satellite operators as they will aid in providing an enhanced experience for telco customers, reinforced by ubiquitous coverage. For satellite operators, though, navigating the regulatory hurdles and ensuring constant capital flow are key concerns; several players from the current herd will vanish in the next three to five years.”

Many operators have started to strike alliances with different satellite providers to help extend network coverage and power new use cases.

AT&T, which has a long history in the satellite space, recently filed plans to lease some of its prime low-band spectrum assets to AST SpaceMobile to potentially bolster the carrier’s integration of satellite-based telecommunications services in expanding the reach of its 5G-based broadband network to more remote and edge locations.

Rival T-Mobile US last year signed a high-profile deal with Starlink to provide satellite connectivity using some of T-Mobile’s 2.5 GHz spectrum, while Verizon has an ongoing deal with hyperscaler Amazon Web Services (AWS) and its Project Kuiper.

That reach is also helping to power more specific edge use cases.

NTT earlier this year stated plans to integrate SES’s satellite network capabilities into its managed enterprise edge product, which is working to  bring NTT’s platform to remote enterprise locations. The integration will embed SES’s O3b mPower medium-Earth orbit (MEO) satellite system with NTT’s managed Private 5G and Edge Compute offerings. It’s targeted at enterprises operating in areas lacking terrestrial network coverage like mining, energy, maritime or remote manufacturing.

Shahid Ahmed, group EVP for new ventures and innovation at NTT, explained in an interview with SDxCentral that satellite integration is an essential option for many enterprises.

“It’s a must-have for any private network offering that anyone’s providing out there today,” Ahmed said. “Mainly because many of our customers have factories, plants, sites in such remote areas that you need a backhaul strategy. That was a sort of a must-have, and if your target market is manufacturing, industrials, including warehouses and mining operations and sometimes even ports, this is something we have to have as part of our offering portfolio. So it was a natural extension [and] something we have been already working with on a number of different installs and deployments, so we decided to industrialize that.”

While major players are working to align their intentions, hurdles remain.

Hays jokes that “the satellite industry has a long, proud history of making billionaires into millionaires,” adding that while there have been technology advances that have made handheld satellite communications more of a reality, “they haven’t changed the law of physics to this point.”

Hays explained that transmission terminals and antennas are smaller and more power efficient but are still outside the operating parameters of a traditional smartphone. Operators are attempting to work through this with their recent deals using traditional wireless spectrum, but it remains a challenge.

“The hardest model is still the direct satellite-to-device communications link,” Hays said. “It’s difficult for power, difficult for signal transmission. … Even if you look at some of the newest ones that have been released recently, they're still the size of oversized dinner plates. You're not putting them in your pocket. So that makes it quite tough to really get the broadband performance in a portable type of device.”

Work in that space will continue, bolstered by what Analysys Mason claims will be a $93 billion market opportunity by 2030.

Satellite connectivity will also need to work through pricing and usage models hamstrung by technology limitations.

ABI Research noted in a report that geosynchronous (GEO) satellites typically have latency of up to 800 milliseconds, which can hamper traditional communications. LEO satellites are significantly faster, with latency of around 50 milliseconds. However, transmission speeds can vary depending on satellite location and spectrum availability.

Boosting these performance metrics is also an expensive proposition that can further hamper business models.

“When we're looking at the constellation of a few hundred satellites, you're probably seeing a cost per gigabyte that is in the order of five- to 10-times higher than the terrestrial network,” Sven Hellsten, business development director for Ericsson, noted in a recent vendor briefing. “However, it's limited usage. You could never ever compare the traffic model with what you consume, on average, 19 or 20 gigabytes on Earth, per user. I think … we're talking probably a usage of a few hundred megabytes per month for out-of-coverage service. So cost is probably going to be acceptable for what you can achieve, but definitely higher.”