Wired No More – The Growth of LEO Solutions

Tony: Today is Monday, February 10^th 2025, I’m Tony Mangino from TC2 and this is Staying Connected. Today, we will have a conversation about LEO satellite business solutions with David Lee, technology director at TechCaliber Consulting, and Steve Rosen, partner at LB3. Good afternoon gentlemen, and welcome back to the show. Dave, let’s start with you.  Why should we care about satellite services since they have been around for over 50 years?

Dave: Hey Tony. Good to be back with you and Steve discussing NTN or non-terrestrial services.  According to recent studies, approximately 15% of the US is too rural for effective wireline or cellular coverage, and there are many areas of the world that don’t have sufficient terrestrial coverage.  And yes, commercial satellite services have been around for over 50 years, but these geo-stationary satellites, at an altitude of 22,000 miles, have long Round Trip Delays that are very noticeable for real-time applications such as voice, video and web browsing and have relatively low uplink and downlink speeds. To give you a simple example, for a signal to travel to and from a Geostationary satellite, it is the equivalent of sending a packet around the Earth… two times.  In contrast, LEO or Low-Earth Orbit satellites made popular by Space X’s Starlink division, are at a 340-mile altitude.  Think of it as a cell tower that is 340 miles away.  LEO satellites can provide latency and bandwidth that is comparable to terrestrial Internet services. …and in some case better (more on that later).

Tony: Steve, I understand that the regulatory landscape for wireless internet access, including LEO satellite services, has shifted.

Steve: Hey Tony—it’s always good to be talking ICT procurement and regulation with you and Dave. And yes, the regulatory background for wireless internet services, including LEO satellite services, shifted significantly this year.  On January 2, a Federal Court overruled the FCC’s May 2024 Open Internet Order which stated that broadband Internet access service (BIAS) should be a regulated common carrier service and not an information service as previously categorized. The Federal Court reversed the Commission’s Order that BIAS—including satellite BIAS—is a fully regulated common carrier telecom service and held that it is a lightly regulated information service.  The resulting benefit to Enterprise customers should be an increase the number of providers of satellite service, especially among resellers and its systems integrators.

Tony: Dave, are LEO satellite internet services a legitimate competitor to terrestrial internet access?

Dave: As already mentioned, the biggest player is SpaceX, which has a fully functional constellation of approximately 6,900 satellites in orbit and is continually adding to that fleet.  To put that number in perspective, 14,450 satellites of any type have been launched in the history of mankind. The other provider with operational service is OneWeb.  As we know, OneWeb was acquired out of bankruptcy by Eutelsat in 2023 to give them an entree into the LEO market. OneWeb currently has a fleet of approximately 640 satellites.  Both Starlink and OneWeb rely on a portfolio of VARs and System Integrators to sell, advise, configure and deploy the appropriate earth station for the Enterprise business use case. In addition, Amazon’s Project Kuiper hopes to launch its first production satellites this year promising more bandwidth with a smaller satellite antenna.  As I’ve said before, don’t count Jeff Bezos out of any technology competition.

Tony:  Dave, what about the new “satellite to smartphone” services I’ve read about?

Dave:  That’s right Tony.  AST SpaceMobile has launched five LEO satellites that provide bandwidth for IoT, emergency alerts, texting, and other reduced capability business applications for rural areas where there is no service or where there is a disaster.  Starlink, not to be out done, has already launched 100 satellites with the same capabilities for rural cell services.  In the U.S., Starlink is partnered with T-Mobile  and AST is partnered with Verizon and AT&T. 

Tony: So it sounds like SpaceX is the 800 pound gorilla of LEO. What makes you think the number of providers will increase?

Dave: Good question Tony. I believe that the LEO marketplace will become increasingly competitive because the technologies are critical to success—the production of small, inexpensive, reliable satellites and inexpensive space launch capacity—are becoming increasingly accessible on a worldwide basis. I believe Starlink has an advantage in that they are vertically integrated with it’s launch service division SpaceX and it has first mover advantage. And the number of satellites planned by each entity is staggering.  For example, Starlink is licensed with the FCC for up to 12,000 satellites.

Tony: Dave, what other factors should Enterprises consider when selecting a LEO provider and how are these LEO services priced?

Dave: Good questions.  Both Starlink and OneWeb provide similar asymmetrical downlink and uplink speeds.  However, the OneWeb satellite constellation does not have the ultra highspeed inter-satellite laser cross-links that Starlink has today and Kuiper will have.  This is important for connections between sites that are far apart.  OneWeb has to pass its traffic down into a regional earth station which is the way it has been done for decades.  Whereas Starlink and Kuiper can keep the traffic up in space until it reaches its final destination. Project Kuiper stated that its satellite constellation will be able to move data around 30% faster compared to terrestrial fiber.  Also, when selecting a VAR or System Integrator provider for the configuration and deployment, scrutinize them as there can be significant differences in their knowledge and integration skill sets associated with your use case.

Concerning pricing, Starlink and OneWeb have basically the same pricing model.  What you end up paying, depends on your sourcing strategy and introducing competition.  There are one-time costs for the equipment and deployment such as antenna, equipment, configuration and integration with other devices and onsite deployment costs.  There is also the monthly recurring charges for the actual service which depends on the grade of service (business vs. more consumer) which translates into higher bandwidth and less packet loss.   For example, Starlink pricing in the U.S. is higher than in the EU or other countries.  The reasoning is that the U.S. customer is willing to pay higher prices compared to the regulated and subsidized broadband services outside the U.S.

Tony: Interesting.  So Steve, what is the word from our friends at the FCC regarding LEO satellites?

Steve: Two thumbs up, Tony.  In April 2023 the FCC established a Space Bureau and moved the regulation of satellites away from the International Bureau. Among other things, the purpose of this reorganization was to streamline and speed up the licensing of satellite services. And, the new Chairman of the FCC, Brendan Carr, has stated that he would like to see more LEO services such as Starlink providing internet and voice service. As such, he will likely support changes to the FCC’s rules with less regulations to launch satellites and make satellite services eligible for universal service subsidies. Finally, Chairman Carr is said to be a friend and admirer of Elon Musk, which bodes well for the regulatory treatment of satellite services under his Chairmanship.

Tony: Good stuff, Steve. Or maybe I should say the right stuff. It sounds like technological and regulatory factors are really starting to make LEOs a viable competitor to traditional Internet service and can make an impact by filling gaps in and supporting new use cases and business applications.  Do you have anything to add Dave?

Dave: Given the more frequent and impactful hacking by nation state actors, for example, the Salt Typhoon attack impacting U.S. telecom operators, satellite services are even more relevant today.   LEO satellite services not only can provide additional individual site resiliency when terrestrial services are not available, but also provide a reliable communications alternative for Enterprises, particularly those responsible for critical infrastructure and supply chain as well as Government agencies. 

Tony: Yes, the ever important security concerns—thanks for bringing that up, Dave.

If you’d like to learn more about these services or you have other ICT needs, you can contact Dave, Steve or any of our LB3 and TC2 colleagues by giving us a call or shooting us an email.  You can also stay up to date by subscribing to Staying Connected, by checking out our websites, and by following us on LinkedIn.