For decades, GEO satellites have been the cornerstone of the satcom industry. They provide wide-area coverage and have long been the go-to solution for broadcasting, communications, weather forecasting and other Earth observation applications. However, the arrival of LEO mega constellations, with their low latency, global coverage and often low-cost offering, has turned the industry on its head.
With the likes of Kuiper, OneWeb, Lightspeed and Guo Wang entering the LEO arena alongside Starlink, the LEO market is set to grow rapidly over the coming months and years. Orders for geostationary satellites are reportedly on the decline, and some analysts are forecasting that NGSO constellations are set to overtake geostationary satellites in revenue by 2028. LEO’s market expansion is already having a major impact on the traditional satcom market and satellite operators are facing a number of challenges.
Understanding the challenges
Up until the launch of LEO mega constellations, the satcom industry was largely dominated by GEO, but now LEO providers are entering the markets traditionally served by GEO operators such as broadband connectivity, media distribution and enterprise communications. This influx of new players has increased competition, driven down prices and squeezed profit margins, making it more difficult for GEO operators to maintain their market position. GEO operators are also dealing with rising production costs and lengthy delivery delays as manufacturers purportedly prioritise the production of LEO over GEO satellites. This is making it increasingly difficult for GEO operators to maintain launch schedules and rising production costs is also further reducing profit margins.
Additionally, a lot of investment that historically would have gone towards GEO, is now being directed to LEO. As a result, it’s become increasingly difficult for GEO operators to attract investment to fund new satellite constellations. Another challenge arises because customers are reluctant to commit to long term contracts. There’s a lot of watching and waiting going on in the market as customers wait for capacity to increase and service price to further reduce; this is driving customers to demand annual contracts instead of longer term contracts. This is adding pressure for GEO operators and making long term planning more difficult.
Additionally, LEO requires a massive number of satellites to achieve global coverage, and this is leading to industry wide concerns about an overly congested spectrum and a potential for increased risk of harmful interference.
Let’s not forget, it’s not plain sailing for LEO operators either. The high number of satellites needed for LEO constellations leads to a greater risk of failure and increased operational costs, and the sheer scale of deployment requires significant capital expenditure, as well as ongoing maintenance and replenishment. As a result, LEO providers face a steep path to profitability, and smaller players may not survive the long term.
Multi-orbit environment
Although LEO is continuing to take an ever bigger share of the pie, it isn’t a panacea for all. As a matter of fact, it’s become increasingly clear that no single orbit can provide the required resilience or meet the varying needs nor capacity demands of all users. When considering the relative merits of LEO, MEO and GEO, each stack up differently in terms of latency, bandwidth, capacity and coverage. While GEO provides wide coverage and high capacity, making it ideal for data heavy applications, broadcasting and Earth monitoring, MEO is better suited for GPS and navigation applications, and LEO is great for applications requiring high-speed internet connectivity.
So, while LEO may well be ideally suited to some applications, it falls short in others. Organisations operating mission critical services in industries such as defence, government, and maritime operations demand highly reliable, uninterrupted service, and require stringent SLAs and CIRs (Committed Information Rates), which LEO operators are struggling to provide.
Coexistence and collaboration
With all this in mind, how can the satcom industry find a new equilibrium where there is greater collaboration between LEO, MEO and GEO to ensure that the varying needs of customers are best met and the industry is strengthened as a result?
The answer likely lies in coexistence rather than direct competition between orbits. While LEO constellations bring clear benefits in specific use cases, no single orbit, whether LEO, MEO, or GEO can meet the diverse needs of the entire market. Each orbit has its strengths and weaknesses, and it is becoming increasingly clear that a hybrid approach leveraging the best aspects of all three will provide the most robust and reliable solutions.
Collaboration between LEO, GEO, and MEO operators is becoming essential. By combining resources and leveraging the unique strengths of each orbital layer, the industry can provide a more comprehensive solution to customers. Hybrid networks that integrate these different orbits will offer the flexibility and resilience needed to meet a wide range of customer demands, from mission-critical operations to high-speed broadband.
The way forward
LEO satellites have undeniably disrupted the satellite industry, challenging the status quo and forcing the market to evolve. However, the future of satcom is not about one orbit replacing another. Instead, it is about recognising the complementary roles that LEO, GEO, and MEO can play in creating a diverse, reliable, and resilient global communications network.
As the satellite industry continues to evolve, operators must embrace coexistence and collaboration. By working together, the industry can deliver better solutions and enhance the overall customer experience. Ultimately, the key to success in the satellite market will be finding the right balance between competition and cooperation, ensuring that every orbit has its place in the future of global connectivity.
Take an active role in finding solutions
Satcoms Innovation Group (SIG) provides a platform for operators, manufacturers, and solutions providers to work together to identify, address, and solve technical challenges facing satcom. As a membership organisation, it strives to foster innovation within the satcom industry by promoting collaboration between industry stakeholders. SIG members are invited to share knowledge, exchange ideas, discuss technical aspects of industry efficiencies and explore opportunities.
For more information or to become a member of the SIG, go to the SIG website.
