SCS Not Seen Rivaling Terrestrial Capabilities, Raises Business Questions

Don't expect supplemental coverage from space to ever provide terrestrial broadband-like service -- there's not a strong business case, multiple operators said Wednesday at the SmallSat Symposium in Silicon Valley. Several questioned the economics of a robust SCS service with a thick data pipeline.

The SCS market is potentially around $42 billion in annual revenue, with about a third of that coming from providing service to people living in rural and remote areas outside terrestrial coverage, said Omnispace Vice President-Strategy George Giagtzoglou. He said the other two-thirds of demand is likely travelers -- people in urban and urban-adjacent areas who have mobile coverage but often move beyond it. Skylo Technologies Chief Product Officer Tarun Gupta said that SCS opportunities beyond smartphones are in wearables and IoT. The direct-to-device (D2D) market is probably a "hundreds of millions" of dollars opportunity, but IoT could drive significant revenue, said Iridium Executive Director-D2D Brian Aziz.

The likeliest use case for SCS service is emergency SOS messaging and perhaps two-way messaging, Aziz said. "Beyond that, it's hard to make the economics work," he acknowledged. A midband service to handsets supporting voice and emails is technologically feasible, said Gupta, but "I don't know if I see HD Netflix coming to a handset." It's unclear what consumers would be willing to pay for that midband service, he added.

Giagtzoglou said Omnispace is designing a system supporting texts, voice calls and a limited data capability for email or simple web browsing, but not browsing as robust as videostreaming.

In markets like parts of Africa, where lack of infrastructure is a challenge, D2D service is an appealing proposition, but satellite operators' ability to support legacy handsets dating from before the 3rd Generation Partnership Project's Release 17 isn't clear, said Viasat Chief Technology Officer-Wireless Initiatives Anton Monk. He said satellite operators can't offer SCS service on their own, and mobile network operator partnerships are “critical” as MNOs bring their big user bases. Most consumers don't want another subscription with a monthly bill but are likely far more willing to go to their existing mobile operator for a non-terrestrial network plan, Gupta said.

"SOS"-type emergency messaging service won't be profitable on its own, Monk said. He said the near-term opportunity for satellite operators is expanding into messaging and voice service. Gupta said Skylo has offered messaging and location tracking service for more than a year, and it's finding a willingness of people to pay.

“We’re making a mess” of space when it comes to orbital debris, said Arrasar Partners CEO Paul Struhsaker. The U.S., China, Russia and the EU are tracking debris but not sharing data, he said. Sharing requires revealing how accurate tracking systems are, and those governments aren’t keen on doing so, he said. With so many satellites, all the major mega constellations will employ automated orbit changes, the way SpaceX has employed that technology, he said. He said Starlink will likely have completed a cumulative 1 million such automated adjustments by 2028, he said.