This ABI Insight analyzes the opportunity for multi-orbit solutions and whether 2024 will be the year that these solutions pick up momentum.
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SmallSat and Standards-Based NTN Solutions Continue to Evolve
Satellite equipment manufacturers and network operators are exploring the potential of multi-orbit network solutions, where a satellite ground terminal can connect with two or more satellite networks in Low Earth Orbit (LEO), Medium Earth Orbit (MEO), or Geosynchronous Earth Orbit (GEO). The hope is that such solutions will help diversify revenue streams and open a path for legacy “Old Space” operators (GEO satellite networks) and “New Space” operators (Non-Geostationary (NGSO) operators) to partner. With operators such as Intelsat, Eutelsat OneWeb, SES, and more actively exploring multi-orbit communications, it appears that multi-orbit networks and terminals are rapidly gaining momentum.
Multi-Orbit Solutions Are Not Yet Ready to Take Flight
Despite the hype, the adoption of multi-orbit solutions is not yet ready to take flight. While the industry players have been optimistic about the possibilities of enhanced resiliency, flexibility, and latency from multi-orbit connectivity, the wider industry appears to not be ready for wide-scale commercial adoption (yet). This comes down to several factors:
- Limited Commercial Opportunities and Costs: The cost to access multi-orbit services, both the terminals and satellite services, is still an expensive and yet-to-be commercially-proven option. While it’s anticipated that sub-US$2,000 multi-orbit terminals could enter the market in 2024, this is still a stark cost difference from Starlink’s or Amazon’s US$400 to US$600 terminals. The cost to access two or more network links and the Return on Investment (ROI) from real-world deployments of such a solution is still unknown as well. Given certain industries' inherent connectivity, resiliency, and latency demands, like the defense industry, link switching or multi-link capabilities (i.e., using both NGSO and GEO links simultaneously for different applications) could be a use case that multi-orbit solutions need to get buy-in and justify the more expensive terminals and service. Nevertheless, the industry is moving toward more affordable and accessible options, not expensive ones with novel applications.
- Carving Out Potentially Unused Capacity: While multi-orbit is being made possible by NGSO operators leasing capacity, like OneWeb or SES, the question remains if carving out capacity specifically for this market with limited applications and infrequent use is justified. Perhaps as a contended service, like Starlink, or with dynamically allocatable capacity when it is needed (software-defined satellite networks), it would make more sense. With the former, Service-Level Agreements (SLAs) would not be an immediate feature, but it’s better than operating a network with the hope that the capacity carved out for these services will eventually find a market and generate revenue. In many cases, a commercial-grade solution may be more than enough, as is the case with many adjacent markets. Therefore, it is likely more players will enter the fray as costs come down, capacity increases, and strong commercial opportunities present themselves.
- Multi-Orbit, Multi-Partner Conundrum: The question of multi-orbit also brings the issues of multi-orbit and multi-partner models. For example, two NGSO players will provide connectivity to a single multi-orbit solution. In this case, who will then provide capacity? To where and when? Unless there are explicit exclusivity operating agreements in place, multi-orbit could become the next frontier of contract and service disputes among operators in the industry, which could take years at a time to resolve. This all remains largely unsettled with multi-orbit solutions.
Imperatives for Multi-Orbit Solutions
The opportunity for multi-orbit at this stage is small. The high cost of the terminals and services relegates the solutions for more novel applications in the space sector, particularly in defense, maritime, and enterprise connectivity. While there are apparent challenges facing the future of multi-orbit solutions, the industry can unlock the technology in several ways:
- Explore Commercial-Grade Opportunities: While defense, maritime, and enterprise connectivity will be strong opportunities for multi-orbit capabilities, there is still a focus on customized and proprietary solutions. With the space industry moving toward lower-cost services with standardized equipment, looking for opportunities in more commercial segments, where an enterprise-grade (five 9s) solution may not be required would be good. As in the case of Starlink, operators may find that the market will be receptive to what works well enough for the application and price point.
- Create Clear Muli-Orbit Partnership Rules: Work to enhance multi-orbit partnerships and network compatibility should start now. Standardization can help with building the desired ecosystem for multi-orbit partnerships, but conversations need to be had on how operators will be dividing on-orbit resources and revenue. The same can be said for the ground network and traffic routing complexities that will come from solutions that leverage multiple networks, potentially at the same time.