The wholesale space race - LEO internet constellations

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The wholesale space race

It is estimated that over 30,000 LEO satellites will be launched over the next few years.

The wholesale space race LEO internet constellations A number of paradigms have been emerging, with the potention of disrupting internet-based services.

A few interesting paradigms have been emerging over the last few years, with the potential to disrupting the Internet infrastructure and the design and deployment of Internet-based services.

Low earth orbit (LEO) satellite communication networks is definitely at the core of this revolution. These constellations have existed for decades, but a new generation of satellites is currently being launched, taking advantage of the drastic reductions in the costs of building, launching and operating nanosats (very small satellites). They come with lots of promises, but also with significant challenges to overcome.

The LEO constellations being designed or launched come in different shapes or forms in terms of number of satellites, altitudes and functionalities. They are also targeted at specific market segments, including

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residential or enterprise broadband connectivity, mobile operators’ backhaul services and IoT solutions.

These are delivered with either direct device to satellite connectivity or via a gateway connectivity, based on 3GPP or Low Power Wide Area standards. Various LEO/5G based voice/data connectivity models and space based fiber paths for long distance connectivity are also being considered.

This new generation of LEO networks is in the early launch stage, with an expectation of over a dozen major new constellations operational over the next 2 to 3 years.

These are primarily from North America and China, with few other constellations out of Europe. It is estimated that over 30,000 satellites will be launched over the next few years, subject to business models materializing.

LEO wholesale opportunities The new LEO satellite networks being designed at the moment bring in new set of opportunities for wholesale telecom operators, taking advantage of the low latency, extensive reach and high capacity of such networks.

On the other side of the coin, they may also be seen as threats in some cases, depending on the market segment, regional applicability and state of wireline/wireless ground infrastructure. Threat or opportunity will have to be assessed on a case-by-case basis, and similarly when it comes to LEO vs. traditional GEO constellations.

With the foreseen likelihood of seeing some of these constellations rapidly succeed, as highlighted with the aggressive launch of up to 800 SpaceX satellites as of October 2020, we are confident that there is a significant opportunity for wholesale operators to leverage LEO networks for various Internet service offering. Some of these opportunities include: • Enterprises: Augmenting the set of options to serve enterprise customers, complementing the existing terrestrial wireline/wireless and satellite GEO alternatives.

• Mobile backhaul: Providing new mobile backhaul alternatives, with different latency/bandwidth/cost dynamics, for 3G/4G and 5G networks, with a focus

on sub-urban/rural and lightly connected regions.

• IoT networks: Extending the geographical reach of existing IoT networks and leveraging IoT centric LEO networks.

• Network extension: Complementing terrestrial fiber and submarine fiber routes in specific cases, including for redundancy, load balancing and disaster recovery scenarios.

• Alternate connectivity: Providing alternate connectivity models to wireless Internet service providers, on top of the license/unlicensed spectrum based connectivity models in place.

• Alternate IP transit: Providing alternative transit/ peering paths to Internet service providers, leveraging space based peer-to-peer connectivity in certain regions of the world.

• MVNO reach: Augmenting the reach of global Mobile Virtual Network Operations (MVNOs), given the large-scale geographical nature of LEO networks and their underlying economics.

• Edge connectivity: Extending edge cloud services connectivity to leverage LEO constellations, where the distributed data centers would interface directly with satellite connectivity

LEO wholesale challenges With new technology and innovation often comes a various challenges which will need to be addressed over the coming years, and the success of some of these initiatives will depend on that. Some of the key challenges include: • Interoperability: Finalizing interoperability mechanisms with 3GPP and specifically 5G standards to ensure seamless operations an extension of some of the terrestrial 3GPP services, in particular for IoT and Voice/Data services.

• Routing: Harmonizing Internet routing and signaling protocol design, where routing protocols will need to be adapted to fit with the requirements of LEO networks.

• QoS: Evolving QoS and traffic management mechanisms to optimize data path resources management and the design and dimensioning of over-subscription models over LEO space segments.

• Cyber-security: Tailoring state-of-the-art cybersecurity mechanisms, as data and control paths

cyber-security require rethinking to accommodate the specific characteristics of space segments, given the constrained functionalities on satellites.

• IoT: Growing next-generation IoT networks, leveraging LEO connectivity given that IoT gateways and back-end architectures in use today will benefit from interfacing with the control and management plane of LEO networks.

• Regulation: Fashioning technology standards and regulations for LEO networks, taking into account that standards bodies have already been addressing the various regulations required for the deployment of large-scale LEO networks.

• Pricing model: Addressing the cost structures of LEO constellations and in particular the pricing structures and models of end user devices and the end-to-end deployment Total Cost of Ownership (TCO), including power, operations and management aspects.

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the way forward The next few years will likely witness a rapid evolution of these technologies, with a possible significant impact on how Internet services evolve. A potentially high-risk highreturn equation, where there will likely be few winners and lots of losers. These are certainly exhilarating times for Internet evolution, in a world where the Internet is, and will continue to be, the cornerstone of nations’ development.

Time will tell if the LEO wave will deliver on its promises.

What is clear though is that there is an open window of opportunity for the wholesale industry to take leadership in defining the synergies with LEO operators.

In fact, finding the right synergies and defining the right commercial models shall be a key focus of the various players through the value chain.

Whether it is about delivering broadband in rural networks, scaling IoT deployments, optimizing content/ cloud delivery models or complementing sub-marine connectivity, among other things, the question of how to take advantage of LEO, and at times, hedge versus possible competition from LEO, is a timely one.

If you are ready to embark on this journey and one of the wholesalers eager to find out how you can address the LEO opportunity, contact us at: sales@hottelecom.com and we will be happy to teach you everything we know on the topic.

the author Riad has spent the last two decades contributing to the development of Internet, Mobile and AI technologies, mostly out of the Silicon Valley, building multiple leading technology startups, advising on strategic investments and rolling out innovative technologies all over the world.

He has led many industry firsts in the areas of wireless/ internet network design, web scale data architectures, Space Internet and AI. He is well versed in the technology startups, innovation and investment eco-systems globally.

Riad holds two Engineering and a Master degree.

He was awarded a Doctorate in AI with highest honors from the University of Paris and finalized his doctoral and post-doctoral work at the University of California, Berkeley - all by age 25.

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Dr. Riad Hartani Partner, HOT TELECOM

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