At a distance of between 300 and 1,200 kilometers from Earth, in the low orbit or LEO (Low Earth Orbit), about 1,500 satellites currently operate, among the fleets that first occupied that space for telecommunications services - Iridium, Globalstar, Orbcomm, since the 1990s - artifacts for observation and scientific purposes, and the first incursions of large constellation projects. The industry today is focused on the promises of LEO, and the entire value chain analyzes how to transform itself for fleets of numerous satellites, revolving around the planet and with global coverage.

OneWeb, Amazon and Space X created - in part - this huge expectation due to the size of their constellations. OneWeb has already raised US$ 3.4 billion in financing from investors such as SoftBank, Grupo Salinas, Qualcomm, Virgin Group, Coca-Cola and Airbus for its fleet of 648 satellites, of which six have been in orbit since last February: in the first tests, they managed to offer broadband access of 400 megabits per second and a latency of 30 milliseconds. Space X, owned by Elon Musk, requested permission from the US FCC (Federal Communications Commission) for 12,000 devices: the first 60 of the constellation “Starlink” were launched in May and run as a test, Without communication with each other. In the case of Amazon, the Kuiper Project foresees a fleet of more than 3,200 artifacts to initially provide Internet access in the United States, with a first phase of 578 satellites, although without accurate launch dates.

The manifest mission of these three major initiatives is to provide Internet access worldwide, even in underserved areas. And at a lower latency: on average, in LEO a latency of 25 to 30 milliseconds can be achieved (compared to 500 offered today by geostationary fleets). What nobody explains along with the bombastic ads is how to make it profitable. Sources from the sector assured to Convergencialatina that the business model of these constellations changed from the original idea and is currently ambiguous: the focus on people without Internet access was transferred to clients with greater ARPUs, such as cruise ships or airplanes, in which the investment by terminal is not a problem. The profitability of future constellations will depend on how multiple unknowns are resolved around LEOs, and the adaptation of the traditional satellite industry –composed by operators, launchers, satellite, terminal manufacturers and terrestrial equipment-, based in the GEO (geostationary orbit), 36,000 km from Earth.

Among the "traditional" operators in the sector, the Canadian Telesat leads the way in the incursion into low orbit, by the hand of its Phase 1 LEO satellite, although with clear caution. Gerry Nagler, Marketing Director of the firm, explained to Convergencialatina that Phase 1 LEO is a satellite for demonstrations. It is used for testing and trials with select clients, with no intention of providing commercial services. For example, in a demo with Vodafone announced in May, Telesat offered 5G backhaul and achieved a latency of 18 to 40 milliseconds for video call transmission, 4K and 8K video streaming and web browsing. The test device is the starting point of a constellation of 200 satellites, which will provide services by 2022.

On its part, Intelsat bets on an integration of GEO and LEO satellites. This operator, with the largest fleet on Latin America (22 satellites in geostationary orbit), is one of the founding investors of OneWeb. In dialogue with this media, company sources clarified that they point to “a system that integrates GEO and LEO constellations, backed by economical and easy-to-install dual-mode user terminals that could easily switch between systems, driven by the end user application. We also seek to capture synergies based on complementary coverage of the LEO fleet, polar services for our aeronautical and maritime customers.”

The unknowns

The operation of the fleets in low orbit - and their impact on the sector in general - cannot be evaluated until the constellations are completely launched into space, because the systems needs all interconnected satellites turning around the world to provide low latency services. So far the new projects are in the experimental phase, with only initial parts of their constellations in orbit. Meanwhile, other challenges reveal business promoters in LEO:

Terminals. For the leg of the industry that looks at satellites from Earth - antennas, terminals, gateways -, the emergence of these new constellations implies a true revolution. The antennas must be able to follow all fleet satellites and communicate with several at the same time. They thus become more complex than existing antennas for GEO, and their cost today exceeds US$ 20,000. For Pablo Mosiul, general manager of Orbith in Argentina (the company acquires capacity in the Ka band from Hispasat), this cost of terminals would be unfeasible, compared to a value of US$ 200 to US$ 300 that is managed in the GEO business. While the industry ensures that these values will decrease with the volume promised by the fleets for LEO, they still do not know when this will occur, or how much the costs will be reduced.

Given. their global coverage, constellations must obtain country-by-country authorizations to provide services. To the bureaucratic complexity that this implies, geopolitical issues must be added: to name a case, the Russian Federal Security Service opposed that OneWeb offered broadband access in that country for national security reasons.

With regard to the specific regulation of the sector, the ITU (International Telecommunications Union) does not have a clear position on LEO, and in the case of a request to launch a national regulator, it only verifies emitted radiation levels. Nor is the period for the orbiting of satellites regulated: in GEO a period of seven years was set for the use of an orbital position, but for LEO this is not applicable, since the constellations are completed in various launch phases, and the lifespan of artifacts is shorter. This point could be resolved this year during the 2019 World Radiocommunication Conference in Egypt.

Space Garbage. In the low orbit a large amount of space mission debris is located. These fragments move at a speed of 7 or 8 kilometers per second, and with each collision with each other, they produce new fragments. This cascading effect will force to regulate the operation of LEO satellites taking into account specifications on service life, fuel load and other factors, which only add costs to the final account.

Maintenance cost. The useful life of LEO satellites - about five years on average - is less than that of GEO -15 years. This forces massive fleet replacements, so the financing capacity of the constellation becomes a central factor.