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Satellite Operators Debate Go-to-Market Strategies for LEO and GEO Broadband

By Rachel Jewett | December 16, 2021

Photo: NASA

Satellite operators are bullish on the prospects for satellite broadband, but differ on their offerings and approaches to capture the market. 

On Tuesday during World Satellite Business Week, Jean-Hubert Lenotte, chief strategy and resources officer for Eutelsat, said satellite is now at the level to compete with terrestrial connectivity in areas where terrestrial connectivity is not available, or not much is available. Lenotte said the combination of High-Throughput Satellites (HTS), flexible satellite technology, and Low-Earth Orbit (LEO) has made this possible. 

Eutelsat expects these improved offerings to increase the reach of the satellite industry. “Our industry represents 0.5% of the whole telecom space, which is clearly a niche. We do believe that this is going to increase to 1% to 1.5% — tripling the industry, significant growth,” Lenotte said. “This is helped by LEO constellations bringing capacity for the latency that is critical for some applications.” 

Geostationary Orbit (GEO) operator Eutelsat was recognized at WSBW for “Strategic Transaction of the Year” for its investment in LEO operator OneWeb. Eutelsat and OneWeb have commercial teams working together on a combined offering for GEO and LEO service, Lenotte said. 

The teams are working to develop service with an antenna that can work with both LEO and GEO without full integration in the provisioning of services, Lenotte said. 

The ultimate goal is to offer “a true automated traffic management between LEO and GEO, that based on the specific use cases and the load of the network will steer capacity to the right place,” Lenotte said. “This is something that is already in the view of customers. And we are discussing it as well with telcos.” 

During the discussion, OneWeb CTO Massimiliano Ladovaz clarified a recent report from London business publication City A.M. that OneWeb will manufacture its second-generation system in the United Kingdom. The operator’s satellites are currently manufactured in Florida through a joint venture with Airbus, OneWeb Satellites

“We are still evaluating exactly how the entire supply chain in our Gen-2 will be deployed. Clearly, there will be an important presence in the U.K. I’m not denying that. We are going to look at the best in class everywhere,” Ladovaz said. He added that OneWeb currently has RFI’s for Gen-2 out now, and will soon put out competitive RFPs. 

Jonathan Hofeller, SpaceX vice president of Starlink and Commercial Sales, addressed SpaceX’s go-to-market strategy for LEO constellation Starlink, comparing it to how SpaceX tackled the launch market. Hofeller described how civil, military, and commercial launch customers were all key to SpaceX’s success. 

“If you just focused on commercial [or NASA or military] launch, we would not have been successful,” Hofeller said. “The three-legged stool is a paradigm that we also apply to Starlink. We have our consumer service, B2B enterprise service, and our government service as well. We’re putting effort in it across all three. It is a lot of work, but we’re focused on doing it right and learning in the process.” 

Hofeller gave an update on Starlink’s reach, and said the service has “well over 100,000 subscribers both on the consumer and enterprise side,” and operates in more than 20 countries. More than 230 different sovereignties have placed pre-orders for Starlink service, and the company is working to enter those markets to provide service. The Gen-1 constellation is complete, and SpaceX will begin launching Gen-2 in the next month or so, with inter-satellite links and Polar Orbit to target northern latitudes.

Hofeller also said that Starlink is expanding its enterprise service, and expects to be more public about its enterprise offerings in the future. 

“A lot of folks say that we’re focused on direct-to-consumer. Certainly that has been a large portion of our effort to date. But we are also currently on cellphone towers, airplanes, schools, and hospitals — you name it. There’s no lack of need for connectivity. [We] continue to expand upon those enterprise offerings and solidify them,” he said.  

AST SpaceMobile has the same goal of connecting the unconnected as Eutelsat, OneWeb, and SpaceX, but takes a completely different approach. The company, which went public through a SPAC earlier this year, is building a cellular broadband network in space, in which unmodified cell phones can connect directly to its satellite for service in areas outside of cellular towers. 

The company is going to market mostly through partnerships with mobile network operators. Chief Strategy Officer Scott Wisniewski said AST SpaceMobile has revenue share agreements in place with more than 20 MNOs, covering 1.5 billion subscribers. He explained that AST SpaceMobile does not have its own spectrum, and operates on the MNO partners’ spectrum. 

“The way our network works, and the way that we’ve been able to connect directly to handsets with no modification is by mirroring cellular architecture as much as possible,” Wisniewski said. 

AST SpaceMobile is preparing for the launch of its test satellite BlueWalker 3, set for 2022

With all of the different approaches to provide connectivity, the industry could benefit from further consolidation to achieve greater scale, said Ruy Pinto, CTO of SES

“I don’t think that we have seen the last of consolidation with the acquisition of Inmarsat by Viasat. I think there is more to come,” Pinto said. “But it has to be driven by logic. Can we achieve synergies? Can we have better scale? Can we better serve our customers? That should guide us as we look at M&A. That’s [the SES] view.” 

Correction: Jonathan Hofeller of SpaceX said that Starlink has pre-orders from more than 230 different sovereignties. A previous version of this story incorrectly paraphrased his statement as 230 nations. The story has been updated. 

Also, the story has been updated to clarify Jean-Hubert Lenotte’s comment about satellite’s value against terrestrial options.