SES says better business case soars 8,000 kms above earth
By Ahmad Hathout
THE HOT ACRONYM in rural broadband delivery from space is low earth orbit, or LEO, and it has entranced political leaders and industry in Canada for its potential to deliver fibre-like internet speeds and very low latency because of its proximity of up to roughly 1,000 kilometres above the earth’s surface.
But there’s been a cautionary tale to this foundational technology expected to help hook up rural and remote communities in the world’s second largest mass of land: The economics for LEO constellations have made it not for the faint of heart, as Mississauga-based Galaxy Broadband CEO Rick Hodgkinson put it at a conference late last month.
There’s a better alternative, some want you to believe, but it flies a little higher. Satellite company SES uses it to serve broadcasters and telecom companies, but not yet in Canada. The Luxembourg-based company claims it brings similar performance to LEOs while reining in the costs.
They’re called medium earth orbit (MEO) satellites.
“We, at SES, have serious doubts, to put it lightly, about the business case for LEO,” Christophe De Hauwer, SES’ chief strategy and development officer, told Cartt.ca in an interview. “The issue of LEO is about the amount of capital that needs to be deployed and the ability to recoup this investment sufficiently quickly until you need to reinvest again into replenishment of the fleet and deploy a new amount of significant capital.”
“In terms of latency, any service on MEO is absolutely comparable to fibre,” De Hauwer said. “In terms of latency, there’s absolutely minimum added value in a LEO-type of latency versus an MEO-type of latency.”
Innovation, Science and Economic Development (ISED) is currently consulting on the repurposing of the C-band spectrum — which runs from 3700 MHz to 4200 MHz — for 5G services. The C-band is currently in use by broadcasters and satellite companies.
The current satellite king is the geostationary constellation, which is seated some 36,000 kilometres above the earth’s surface and is in use to serve Canada by companies such as SES, Intelsat, and the country’s largest satellite player, Telesat. Those constellations use the C-band, Ku-band and Ka-band. SES uses Canadian provider Ciel, which delivers satellite services in the Ku-band.
SES currently does not use the C-band for its MEO constellation, which currently doesn’t cover Canada’s North. SES has said northern Canadian communities have built local networks with terrestrial technologies and need backhaul connectivity via satellite. “Therefore, an MEO architecture is perfectly suited for a far better connectivity of the North,” SES says.
Tim Farrar, of Menlo Park-based satellite and telecom consulting firm TMF Associates, told Cartt.ca that there are trade-offs that cannot definitively give answers as to whether one is truly more expensive than the other.
He explained that MEO satellites in the sky are less expensive than those of an LEO (and far fewer in number), but said it has “much more expensive” terminals on the ground communicating with the satellites — which generally means a higher cost of equipment to the consumer. Farrar compared the costs to SpaceX’s Starlink — whose beta equipment kit costs $649 plus a monthly service cost of $129 — and OneWeb’s terminals. And vice-versa: LEO constellations are more expensive, but the terminals are not as expensive as an MEO product.
But if MEOs, as stated, may work best providing backhaul for local networks. It depends on the application, Farrar said. “For example, you can afford to spend more for one terminal to provide a single backhaul link from a village than you can on terminals which go on the roof of every house in a widely spread farming area.”
Telesat agreed. In response to questions from Cartt.ca about the claim MEO satellites are a less expensive but comparable constellation to LEO, the company said more power is required from the terminals to communicate with satellites that are further away, which costs more money.
This week, Amazon’s Kuiper LEO satellite project announced a breakthrough with the terminals its customers will use, which the company claims will be smaller and affordable.
SES says the significant cost reduction for MEO is largely held up by the fact that global coverage for such a constellation only requires dozens of satellites, versus an LEO constellation requiring hundreds or even thousands of satellites. (Telesat said its LEO constellation will have around 300 satellites, using optical links for broad coverage, while SpaceX’s Starlink have over 1,400 of them and officials there have talked about launching more than 12,000 to service the world.)
As for its terminals, SES says it is “working on the antenna technology for our next generation, with the objective to have lower cost of terminals than the current generation.”
Right now, SES does not provide a direct-to-consumer (or direct-to-the-house roof) model and won’t do so for the “next few years,” it said. Instead, it beams its capacity to backhaul “aggregation points,” from which third parties carry the last mile home. The cost of the antenna at that aggregation point, SES says, is in the tens of thousands of U.S. dollars.
Last month, Telesat finalized a $600-million deal that would see the company sell broadband capacity to the federal government over 10 years. The Ottawa-based company said there are clear latency advantages with LEO satellites when it comes to things like “loading a content-rich web page.” The company’s own LEO will use a mesh network of satellites for added resiliency, it said, so when one satellite fails it doesn’t harm coverage. It also said that there will always be satellites in view from the ground without interference from objectives, which Telesat said can be a problem for MEO constellations.
MEO satellites today, including SES’s current ones and the next generation launching next year, will orbit at 8,000 KM over the equator. In other words, flying along that plane means the satellites won’t see Canada’s North. That has been a criticism of Telesat, which Farrar mentioned, too.
But this, according to SES, is “the idea”: The company said it could launch additional satellites at different planes to get global coverage with MEO — and still come in spending less.
“Instead of spending billions in a LEO constellation, the North of Canada could have fiber-like connectivity to any aggregation points it desires with the expansion of SES MEO, for a fraction of the cost,” SES said. “Or, if a LEO constellation is deployed, have a MEO competitive service too.”
