Satellite operators gear up for Asia’s tidal wave of satellite capacity

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TAMPA, Fla. — Satellite operators in Asia are banking on soaring demand for connecting plane passengers and other customers on the move to absorb an exponentially increasing supply of capacity in the region.

More integration between satellite and mobile network operators will also create new opportunities for putting this anticipated glut of supply to work, executives said Oct. 18 during the APSCC 2022 Satellite Conference and Exhibition in Seoul, South Korea. 

Northern Sky Research expects global capacity supply to soar from about 39 terabits per second (Tbps) today to 172 Tbps by 2030. 

More than 61 Tbps of this satellite capacity is on track to cover Asia by 2030, according to Jose Rosario, research director at Northern Sky Research.

This jump, largely driven by SpaceX’s rapidly expanding Starlink broadband network, follows a steady rise in global capacity over the previous eight years from around 1 Tbps in 2013 to 3.7 Tbps in 2021.

After deploying another 54 Starlink satellites Oct. 20 in SpaceX’s 48th launch of the year, SpaceX CEO Elon Musk said the company now “has more active satellites in orbit than rest of Earth combined, tracking to double rest of Earth soon.”

The company has more than 3,100 working satellites in non-geostationary orbit (NGSO), according to data maintained by astronomer and spaceflight analyst Jonathan McDowell.

However, operators in geostationary orbit (GEO) are also contributing to this capacity flood. 

Viasat expects each of the three ViaSat-3 satellites it plans to start launching from this year will add about 1 Tbps of capacity to the market. 

The third ViaSat-3 satellite, slated to launch by the end of 2023, will specifically cover Asia.

Mobility demand

Peter Girvan, vice president and general manager of space and commercial networks at Viasat Australia, said there is an “enormous” opportunity in Asia to bring Wi-Fi to planes with this capacity. 

While the COVID-19 pandemic delayed plans to connect aircraft in the region and reduced travel worldwide, Girvan said it has also helped increase passenger demand for inflight connectivity (IFC).

He pointed to how a hygiene policy from Australian airline Qantas Airways that prohibited the use of entertainment touchscreens built into the back of seats encouraged passengers to bring their own devices.

That increased IFC adoption and the amount of bandwidth passengers use, according to Girvan, who said “Qantas is back to its pre-COVID traffic levels even though it has about two-thirds of the passengers that it was carrying pre-COVID.”

Only about 9,000 of the roughly 28,000 commercial aircraft in service globally today currently provide IFC, said Terry Bleakley, regional vice president of Asia Pacific for GEO fleet operator Intelsat.

Conservative estimates from Euroconsult analysts anticipate this growing to 16,000 connected aircraft by 2030, or 20,000 under an optimistic model.

“Whichever way you look at it, pessimistically or optimistically, there’s a lot of connectivity to bring about in the next eight years to that market globally,” Bleakley said.

Of the roughly 8,600 aircraft in service today in Asia, less than a third are connected — much lower than the rest of the world in an IFC market that the U.S. still dominates.

Coupled with how 61% of all new aircraft being built over the next decade are for Asia, Bleakley highlighted an “incredible opportunity for growth in just that sector.”

For India alone, Boeing recently forecasted airline operators would need more than 2,200 new jetliners over the next 20 years.

The maritime market also continues to grow in Asia, Bleakley added, and a recent request from agricultural farming giant Deere & Company for satellite solutions to connect its machines could significantly boost demand for land mobility worldwide.

“Just in mobility there’s three markets that are going to absorb a whole lot” of capacity coming to Asia, according to Bleakley.

Intelsat will need all the bandwidth it can get, he said, adding that “we probably won’t have enough, and we’re going to have to take from others” to meet demand.

There is also a growing need for backhaul services in Asia that will require more capacity in the region, said Christophe Cazes, CEO of Asia for GEO operator Eutelsat.

Cazes highlighted particularly strong demand for backhaul in “ultra” rural areas across the continent amid the transition to 5G mobile services

The need for scale

Eutelsat plans to buy NGSO operator OneWeb to serve future connectivity needs better, and Viasat is seeking to buy Inmarsat to expand globally across different orbits and frequency bands.

Viasat’s Girvan predicted more operators would turn to acquisitions to build scale as Starlink, Amazon, and other “entrants with deep pockets” come into the marketplace. 

“I don’t know that it’s over yet,” he said, “it’s in reaction to what’s coming.”

While Intelsat bought part of IFC provider Gogo in 2020 to expand in the aviation market, Bleakley believes the industry needs to look beyond just mergers and acquisitions to build significant scale.

“We’ve got to remember how small we are as an industry,” he said.

Whereas the industry generates about $14 billion in wholesale revenues, this is dwarfed by satellite customers such as U.S. telco AT&T, which made nearly $169 billion in 2021.

Another way to build scale is through standards, Bleakley said.

If operators can find a way to adopt 5G waveforms used in cheaper chipsets for the wireless industry, “as opposed to [being] held hostage by the people making silicon and the modems, we can get those price points down to where we need to go,” he said.

Intelsat and other satellite operators have been looking to virtualize modems and other ground-based hardware to increase interoperability.

“We need to be homogenous with the [mobile operator] network,” he said, “and up to now we’ve been heterogeneous — we’ve sat on the outside of it.”

Surviving industry transformation

Satellite capacity prices fell at double-digit levels as supply gradually increased from 2017 to the first quarter of 2022, according to Northern Sky Research.

But this is “nowhere near the supply shock that’s coming,” Rosario said.

He believes GEO operators will need to innovate and reinvent themselves to be competitive to thrive in this changing market.

“The option of staying still will lead to their companies going bankrupt,” Rosario warned.

This could even lead to them no longer being labeled as satellite companies over the next decade, he added, as their space-based networks are seamlessly integrated with terrestrial networks.