Low Earth Orbit Satellite Broadband to Drive Universal Broadband Access, Despite Challenges

In December 2020, the European Commission selected consortium members from satellite manufacturers, operators, service providers, and telco operators for design, development, and launch of space-based communication systems. The consortium members include Airbus, Arianespace, Eutelsat, Hispasat, OHB, Orange, SES, Telespazio, and Thales Alenia Space. The group will be assessing potential initiatives for providing universal connectivity coverage for rural and not-spot areas to strengthen the European digital economy. It will also study the potential of space-based systems to enhance current and future critical infrastructure such as road and maritime transport, air traffic control, autonomous vehicle development, and the Internet of Things (IoT).

Around 84% of households in Western Europe currently have broadband connectivity. Connections via DSL network make up more than half of total fixed broadband connections, while fiber optic connections represent only one fifth of total broadband access. Fixed broadband connectivity in Eastern Europe is quite limited—only 63% of total households. Satellite and fixed wireless access (FWA) broadband services are used mainly in areas with limited fixed broadband connectivity.

Despite the high broadband penetration in most parts of Europe, rural areas still have limited broadband connectivity. According to the European Commission, a majority (80%) of rural households have access to DSL broadband. Cable broadband coverage is only concentrated in high-density urban areas. FTTH and DOCSIS 3.0 networks cover 17% and 11% of rural EU homes. Since LTE is approaching complete coverage of rural homes across Europe, FWA has been adopted by many rural homes to substitute traditional fixed broadband technologies. Although satellite broadband services cover almost 100% of rural areas, adoption is limited to sparsely populated areas where other fixed broadband services cannot reach.

The limitations of satellite broadband have resulted in its limited adoption so far. First, pricing and data limits can be challenging for residential use cases. For example, Eutelsat’s Konnect packages are priced between €30 (US$37) for its 22 Mbps package and €70 (US$85) for its 75 Mbps package. Although there is no data cap, Konnect broadband upload/download speed will be slowed down when users exceed maximum data for each package.  The cost of satellite broadband service is relatively high, compared with a US$53 per month 100 Mbps unlimited DSL package. Similarly, 5G FWA unlimited service is available for a US$60 monthly fee, which is not usually the case for fixed broadband services. Latency is another issue with satellite broadband services. Median latency of satellite services is around 600 milliseconds, while latency of fixed broadband is around 40 milliseconds; the 5G network boasts latency as low as 1 to 2 milliseconds. Therefore, pricing, data limits, and latency of other broadband technologies are more appealing than satellite broadband. This means satellite broadband adoptions are limited to remote areas where satellite is the only option.

Governments and satellite industry players are now positing Low Earth Orbiting (LEO) satellites to bridge the digital divide; however, challenges still remain. Recently launched SpaceX’s LEO service—Starlink satellite broadband service in North America—promises between 50 and 150 Mbps broadband, latency as low as 15 milliseconds, and unlimited data. Starlink broadband is sold for a US$99 monthly fee and upfront equipment fee of US$500. Although the service’s beta test show an average download speed of around 100 Mbps with latency of 39 milliseconds, equipment costs and monthly service fees are still high compared to other services.

Competition in the broadband market continues to increase as operators try to upgrade their networks. DSL operators continue to upgrade to VDSL and FTTH, cable operators are expanding DOCSIS 3.1 networks and are now looking forward to DOCSIS 4.0. Mobile networks upgrading to 5G will create the emergence of more FWA offerings as well as accelerate competition in the broadband market. All these technologies will be widely available in urban and suburban areas and are likely to limit the satellite broadband services which could penetrate these areas. LEO satellites are smaller than geostationary satellites and may need more satellites to be launched to achieve good coverage. The high cost of receiving terminals can be another barrier for mass adoption. Therefore, satellite broadband services for residential use cases, even with enhanced quality services offered by LEO, will find it challenging to compete with other broadband platforms.

However, the European Commission’s plan for space-based communication system will surely help provide broadband access in remote areas where broadband is underserved or completely unserved. This will help achieve the government’s universal broadband targets. However, the ability to support lower CPE and monthly fees will be essential to boost affordability. Government support to subsidize the cost could be helpful to drive adoption. LEO satellites also bring the advantage of providing dedicated connectivity to the scientific community or enterprise in underserved areas, as well as communications on the move such as maritime and air transportation.   In addition, 3GPP is now in the process of standardization of technologies to support 5G in LEO constellations. The standardization is positioned as part of 3GPP Release 17 in 2021. Incorporating the 5G network will create low-latency connectivity for emergency responses, education, IoT connectivity for industrial, and mobile backhauling. As standardization progresses, the government and industry players need to assure coexistence of satellite and 5G systems such as careful spectrum allocation to accommodate both satellite and 5G systems, limiting out-of-band-emission (OOBE) levels to reduce interference between satellite earth stations and terrestrial networks, etc. In conclusion, despite the challenges, LEO systems are expected to bring advantages in Europe as well as other markets.