Are GEO Space Networks Dead? The LEO Takeover Shaking Up the Telecoms Industry

On February 19, 2025, Moody’s Ratings changed its outlook on satellite operator SES from “stable” to “negative,” which has been attributed to increased competition in the satellite sector, price pressure, and risk of oversupply from Low Earth Orbit (LEO). While the company is celebrating 40 years in the business, the company is also “streamlining” operations with layoffs of over 80 employees, about 3.5% of the company’s total workforce.

Likewise, global European satellite operator Eutelsat OneWeb has been rapidly declining in market capitalization over the past 6 months, declining to €820 million in February 2025 from €1,910 million in August 2024, down 57.07%. This extremely low market capitalization now makes the global company more comparable to regional operators.

Finally, Moody’s investors also affirmed the Caa2 rating for American Geostationary Earth Orbit (GEO) operator EchoStar, giving the company a negative long-term outlook. Furthermore, ABI Research estimates that Hughes Network broadband subscribers declined to 869,000 at the end of 2024 from 1.17 million at the end of 2023.

The proprietary and specialized GEO infrastructure of the past is now weighing down space industry incumbents that find themselves needing to rapidly innovate against mounting competition. Consolidation seems to have only prolonged the inevitable decline of these companies as well. Eutelsat attempted to diversify and build a multi-orbit strategy by acquiring LEO operator OneWeb (the company that went bankrupt in 2020), but has failed to gain meaningful market share in the key enterprise markets such as aviation, maritime, fixed, and land mobility (which the system was purpose-built to serve). Losing €873 million and more than 50% of the company’s market capitalization should say it all.

Likewise, while SES is “streamlining” operations, it is undergoing a €2.8 billion acquisition of Intelsat, except that, unlike Eutelsat, it is building redundancy by acquiring a fleet of GEO satellites. This is the same fleet that lost one of four Boeing-made satellites, Intelsat 33e, in 2024 from a sudden explosion, cutting down the fleet of active satellites and shared payloads to 37 GEO satellites. While SES does have Medium Earth Orbit (MEO) satellites that can boast 150 Millisecond (ms) latencies and high data throughputs of from 10 Megabits per Second (Mbps) to 10 Gigabits per Second (Gbps) per link for enterprise connectivity, Starlink Gen 3 satellites are reported to support satellite capacity  of 1 Terabits per Second (Tbps) on the downlink and 160 Gbps on the uplink, with 20 to 30 ms latencies and could, therefore, rival SES services.

The size of these new LEO disruptors is in a different galaxy as well. In 2024, ABI Research estimates that SpaceX’s 2024 Starlink connectivity service revenue amounted to US$ 7.4 billion with 4.6 million subscribers in 2024, eclipsing competitor Hughes Network estimated at US$1.35 billion in service revenue with 869,000 subscribers. To top this off, while Amazon Kuiper hasn’t launched satellites into orbit yet, Amazon’s total Capital Expenditure (CAPEX) for 2024 totaled US$83 billion and the cost of the Project Kuiper network is estimated between US$10 billion and US$20 billion. Amazon’s investment in its LEO satellite infrastructure could turn the satellite service provider into  an industry “whale.”

What is certain is that the outlook for incumbent GEO satellite business could experience some challenges. If the performance of these companies is coming from only the initial rise of SpaceX’s Starlink, then the full deployment of Project Kuper and Chinese mega constellations Qianfan (Shanghai Spacecom Satellite Technology (SSST)), Guowang (China SatNet), and Honghu-3 (Hongqing Technology) could signal the end of an GEO era. However, there are more options than selling off ground infrastructure or moving to a CAPEX-intensive LEO play.

The telecoms industry is rapidly embracing new space technologies that enable higher speeds and greater bandwidth at lower costs. The days of relying on complex and expensive single satellite solutions tailored for specific markets as a primary form of connectivity outside terrestrial coverage are quickly becoming outdated. In large part, this represents a phasing out of an older philosophy that was largely bred out of necessity for space networks to maximize the Size Weight and Power (SWAP) of their satellite platforms that reflect the limited budgets afforded to them. This often meant that satellite networks needed to make compromises in architecture and payload flexibility to enable profitability, which conflictingly meant systems were overdesigned to have staying power (15+ years), but now are becoming outdated every 2 or so years (or even worse, as they reach the launchpad) in the face of rapid iteration and mass manufactured networks.

However, with the rise in new technologies such as regenerative processors and software-defined satellite solutions, satellite networks, now more than ever, need to embrace digitalization and miniaturization to enable architecture customization. In this respect, software-defined and even miniaturized satellites can help alleviate much of the current issues GEO operators are facing. Launch costs represent around 30% to 50% of the overall telecommunication satellite procurement process, so exploring ways to decrease costs at the design level, which can ultimately bring the weight of the satellite down, will help improve overall Total Cost of Ownership (TCO). With the mass-production design of software-defined satellites, this will inherently drive down costs as satellites move away from customized and, therefore, expensive designs. Likewise, digitalization will also enable lower Operational Expenditure (OPEX), as software can help automate a number of tasks that will all ultimately lead to a better cost per bit in orbit.

While these innovations can help make GEO satellites of the future more valuable, the 36,000 Kilometer (km) distance and weak link budget inherent with this orbit is a constraining factor for the connectivity demands of tomorrow. Likewise, digitalization looks to the next generation of GEO satellites, but does not account for the current ones in orbit. In this way, incumbent space GEO operators will likely need to continue to drive down the price per bit and remove barriers to service access to remain competitive. Additionally, coming to terms with the reality that current GEO connectivity will likely be relegated to a back-up layer or a value-add in a multi-orbit service agreement is a probable inevitability. So, is GEO space dead? No, but GEO networks in their current form are on their way out. ABI Research anticipates, however, in its latest release of Satellite Constellations and Launch 2024 that the next generation of GEO satellites will have a place in the future of Earth and in-space connectivity with active GEO satellites forecast to grow from 539 in 2024 to 617 by 2032. ABI Research intends to explore the strategies, opportunities, and leaders driving digitalization in space networks in our Space Technologies & Innovation Research Service.