LEO satellite broadband services to reach 5.2mn users in 2026, generate revenue of $4.1bn: Report

Low Earth Orbit (LEO) satellite broadband services which are touted as the next major leap in broadband technology to provide high-speed internet connectivity to far flung areas is forecasted to gain 3.5 million subscribers in 2021, growing at a compound annual growth rate (CAGR) of 8% to reach 5.2 million in 2026, and generate $4.1 billion services revenue, according to ABI Research.

Currently, the LEO satellite industry comprises companies like Elon Musk’s SpaceX, Bharti-backed OneWeb, and Canada’s Telesat.

SpaceX launched Starlink broadband services to residential users in 2020, with 100Mbps broadband speed paired with unlimited data caps. It has so far launched over 1,000 LEO satellites, while OneWeb and Telesat have launched LEO satellites providing connectivity to the business segment.

Amazon, which plans to launch LEO constellations named project Kuiper, received FCC approval for its project in mid-2020, although it is yet to confirm the launch date of the first satellite.

Traditionally, Geostationary Earth Orbit (GEO) satellites are mainly used to provide broadband services to homes and businesses in remote or rural areas where the deployment of mobile or fixed broadband connectivity is a challenge for operators.

GEO satellites typically support speeds over 100Mbps but their distance from the Earth surface, about 36,000km, leads to longer latency which may go as high as 600ms, limiting the use of low latency applications.

“LEO satellites will play an important role in satellite broadband services in the years to come…. Orbiting around 800-1600 km from the Earth’s surface, LEO systems offer a major advantage of low latency between 30-50 milliseconds, enabling LEO broadband services to support low latency services such as online gaming and live video streaming,” explained Khin Sandi Lynn, Industry Analyst at ABI Research.

The Satcom industry, however, will face competition from terrestrial broadband networks due to the expansion of fixed broadband networks and mobile networks, while LTE and 5G will challenge the satellite broadband industry by supplying fixed wireless access (FWA) services to residential users, Lynn added.

“The challenge of LEO-based broadband service currently is the cost of terminals, which are relatively high compared to existing satellite or terrestrial platforms… Flexible packages and pricing could make the services affordable for users in both developed and emerging markets.” Lynn further said.