Elon Musk’s Starlink satellite internet service continues to grab market share and geopolitical clout, highlighted by its crucial role in providing communications resilience in the Ukraine conflict.
But the future of satellite communications, industry executives and experts point out, is moving towards hybrid networks that combine services from low-Earth orbit like SpaceX’s Starlink with those from higher altitude satellites in medium and geostationary orbits.
This shift is driven by both commercial demands and security needs, with the U.S. government and commercial users, like airlines and cruise ship companies, increasingly seeking multi-orbit solutions.
A recent spate of industry deals — such as the Eutelsat-OneWeb merger, Viasat’s acquisition of Inmarsat, Intelsat’s and SES’s agreements with OneWeb and Starlink — all point to mixed space networks spanning multiple orbits.
According to Caleb Henry, industry analyst and director of research at Quilty Space, hybrid networks that were once considered niche are now becoming a dominant trend in the satellite communications industry.
These networks leverage the strengths of different orbit types to provide enhanced connectivity. Smaller low-Earth orbit satellites offer low latency due to their proximity to Earth, while much larger geostationary satellites provide wide coverage but with higher latency. In between are medium Earth orbit (MEO) satellites. .
“If you look at the strengths and weaknesses of a multi-orbit approach, the biggest advantage, from a DoD perspective, is resiliency,” Henry noted. “Military users like to have a Plan A, a Plan B and even a Plan C. And with multi-orbit, you get that level of backup that gives them confidence they will always have service even if one is jammed, or there’s an outage or complication.”
There are also market forces at play in this shift to hybrid networks, Henry added.
The industry is witnessing a significant transformation as traditional satellite operators adapt to the upheaval caused by new entrants like Starlink and anticipate more competitive pressures from forthcoming LEO services such as Amazon’s Project Kuiper and Telesat Lightspeed.
As the industry evolves towards multi-layered networks, said Henry, collaboration and partnership models are becoming the norm for operators to stay relevant and meet the complex demands of customers who want to ensure continuous connectivity even in challenging situations.
According to a recent report from Euroconsult, a market research firm, the price of satellite bandwidth for data services has dropped 77% over five years after SpaceX’s Starlink constellation flooded the market with capacity.
“The GEO companies continue to feel financial pressure because their emerging competitors are heavily capitalized and have demonstrated an ability to pull in more resources than the classic satellite operator,” Henry said.
Moving to a ‘partnership model’
“Our world is changing in a way that satellite services are becoming much more complex,” said David Fields, president and chief executive of SES Space & Defense, the U.S. government arm of global satellite operator SES.
SES, which operates satellites in GEO and MEO, is partnering with LEO players like Starlink and OneWeb to offer integrated services for government and commercial use. And the plan is to also work with Amazon when Kuiper is deployed, he said.
Customers want the lower latency and affordability of LEO in addition to the survivability, high bandwidth and mature technology that GEO provides, Fields said. Defense customers, in particular, want a “robust satellite communications architecture.”
Fields noted that satellite operators have sold bandwidth to DoD for years, packaging satellite capacity from GEO satellites with terrestrial communications networks. However, the landscape has dramatically changed with the advent of non-GEO capabilities.
“The level of integration is much more sophisticated, the amount of software, hardware, ground systems, the amount of control that is required to operate those systems does not lend itself well to the model like we knew it before,” he said.
“We’re moving away from a vendor-centric model to a partnership model,” Fields said. “The government may still buy raw capacity, but that approach is not as effective when they have to package it with something else.”
The disruption caused by LEO providers continues, said Fields, and that means the consolidation that started in recent years is not over, “and the level of cooperation and collaboration between the operators needs to improve.”
There have been huge investments in LEO and MEO systems, he said. “What that means is the whole dynamics is changing,” and the traditional players must adapt or risk becoming irrelevant.
Although collaboration is a necessity, Fields said it has been challenging. “Everyone wants to compare our industry to the cell phone industry. But it’s not quite the same scale. We’re never going to deliver a billion handsets in a year, but what we can do is define some standards across the networks in a way that doesn’t put a burden on the operators.”
DoD is not forcing companies to partner, but the government is asking for more sophisticated services that demand vendors to team up, Fields added.
He noted that delivering seamless connectivity from multiple orbits “really requires the operators to invest more heavily in things like software, like network management, whereas before we could fly the satellites and we could sell the capacity.”
It’s also important for the industry to educate customers on how to best take advantage of hybrid networks, he said.
“Everyone talks about multi-orbit and multi-frequency, but the reality is you need the right orbit for the right mission. And every orbit that a customer uses should be connected together in a way that allows them to manage the network,” Fields said.
A case in point is the U.S. Special Operations Command, one of SES’ biggest customers that demands global connectivity. “For SOCOM, we partner with everyone in the industry,” he said.
The capacity glut fueled by LEO systems is driving traditional GEO operators to seek other sources of revenue to help offset the cost of fielding and maintaining constellations, Fields noted.
“We’re looking for opportunities to use our satellite as a platform, our constellation as a platform.” Instead of using satellites only as providers of communications services, the plan is to offer them as platforms to host payloads for customers such as Earth observation or imaging satellite operators.
As the industry shifts to multi-orbit networks, he cautioned, “My biggest concerns are not around the actual satellites but around the ground infrastructure.”
Although many companies are developing next-generation terminals that can talk to different satellite networks, that market is still evolving, Fields said. “We don’t have a lot of good multi-orbit solutions around antennas,” he added, and the pricing remains too high for many customers. “Terminals are still a work in progress.”
Market in transition
Another GEO satellite operator, Intelsat, is an authorized reseller of Starlink LEO broadband and integrates it into multi-orbit networks for the military.
The company has developed multi-orbit terminals for U.S. military ground vehicles and aircraft communicating with GEO and LEO satellites.
Intelsat’s president of government solutions, David Broadbent, said that DoD customers want these layered services but recognize that the terminals are a major obstacle.
The Air Force, for example, operates aircraft configured for GEO communications. Until they transition to modern digital antennas, “it becomes very difficult to evolve to multi-orbit communications.”
Like other GEO operators in the defense market, Intelsat is trying to transform from being a bandwidth provider to delivering fully integrated services.
“Being a capacity provider was a very simple model,” Broadbent said. “But with all of the disruption that we’ve been through, we really have to take a long hard look at the business and pivot to multi-orbit multi-band secure communication solutions.”
On the commercial side, Intelsat is providing multi-orbit space internet services to airlines under a partnership with OneWeb.
“We’re outfitting several hundred aircraft with a terminal that is capable of servicing both orbitologies and switching between bands as necessarily dependent upon coverage and any potential disruptions,” Broadbent said.
Traditional GEO operators are having to adapt and rethink business models, he said. “We saw a huge rush to LEO, and satellites flooding the market, on the consumer side as well as on the military and the government side.”
But in DoD, the sentiment has changed, he said. “It’s gone from ‘we must have proliferated LEO with low latency’ to ‘we really want resiliency, we really want availability.’”
This is significant because multi-orbit solutions “are more scalable, and are sticky from a customer perspective,” Broadbent said. “And that allows us to really move higher up the value chain.”
“We are going to continue to partner selectively,” he added.
Intelsat also is evaluating whether to build its own MEO constellation. “We’re expecting a decision on that within the next three months,” said Broadbent. “That’s a significant capability that would augment our multi-orbit strategy.”
Steve Gizinski, managing director of Viasat Government Services, also sees multi-orbit networks as an important factor in meeting future demand.
He said he could not comment on Viasat’s specific LEO partnerships but noted that the company intends to bring LEO services into multi-orbit offerings for DoD customers.
“It’s a wonderful technology that offers yet another element of strength for the network,” said Gizinski. “We recognize that by integrating these different services together, you have the most compelling solution.”
What’s happening in the market is clear, he said. SpaceX and Amazon Kuiper, with their financial clout, “can have an influence that is outsized, just by the amount of capital they’ve got available to them, and they are reshaping the competitive dynamics.”
More focus on resilience
Proliferated LEO satellite networks are commonly assumed to provide resilience through sheer numbers. But don’t be fooled, the Boeing Co. warned in a marketing piece published Feb. 13.
Boeing manufactures commercial GEO satellites for Viasat and MEO satellites for SES.
“There’s a love fest going on with proliferated LEO, but it’s pretty easy to poke a hole in that,” wrote Kay Sears, vice president and general manager of Boeing Space.
“To think that a proliferated LEO constellation alone can deliver a resilient outcome is flawed,” Sears wrote. “When you’re in LEO, you need thousands of satellites to have complete Earth coverage. When you’re in MEO, you can cover the globe with six satellites, and yet, the latency is just about the same.”
In an era when space is likely to become a battleground, Sears argues, “it’s about choosing the right thing for the right mission, and having the ability to do that.”
With anti-satellite weapons posing a growing menace, the industry sees the Space Force as a major catalyst driving the satellite industry’s shift to multi-layered networks.
The Space Force acquisitions chief Frank Calvelli said a multi-orbit approach enhances global coverage for tracking missile threats as well as for seamless communications.
U.S. space networks need redundancy and resilience, and proliferation in LEO is just one piece of that, Calvelli said Feb. 23 at the Center for Strategic and International Studies. “We do need to do more diversification of orbits.”
Historically concentrated in geostationary orbit, Calvelli noted that the Space Force is expanding capacity in low-Earth orbit in concert with commercial industry. Faced with escalating threats, the mandate is unambiguous: “I’m an advocate of proliferation everywhere.”
This article first appeared in the March 2024 issue of SpaceNews magazine.
