The New Space Race: How Nanosatellite Startups Will Impact the IoT Connectivity Landscape

Subscribe To Download This Insight

1Q 2019 | IN-5381

Much of the recent focus on emerging wireless network technologies has centered around 5G deployments but, within the past year, approximately two dozen nanosatellite startups, including Astrocast, Hiber, and Swarm, have entered the IoT market in an effort to increase the value proposition of satellite-connected IoT solutions. Joining established satellite communications companies such as Iridium, GlobalStar, and ORBCOMM, these startups are focused on reducing the costs of creating these networks by relying on open standards and smaller sized CubeSat satellites (30 cm x 10 cm x 10 cm) launched via SpaceX rockets to significantly lower deployment and solution costs to as little as US$3/month/device.

Registered users can unlock up to five pieces of premium content each month.

Log in or register to unlock this Insight.

 

Launching Nanosatellite Constellation Networks

NEWS


Much of the recent focus on emerging wireless network technologies has centered around 5G deployments but, within the past year, approximately two dozen nanosatellite startups, including Astrocast, Hiber, and Swarm, have entered the IoT market in an effort to increase the value proposition of satellite-connected IoT solutions. Joining established satellite communications companies such as Iridium, GlobalStar, and ORBCOMM, these startups are focused on reducing the costs of creating these networks by relying on open standards and smaller sized CubeSat satellites (30 cm x 10 cm x 10 cm) launched via SpaceX rockets to significantly lower deployment and solution costs to as little as US$3/month/device.

While Iridium’s NEXT constellation of 75 satellites (66 active and 9 spares) cost nearly US$3 billion to deploy, a typical CubeSat satellite can be designed, built, and launched into orbit for less than US$1 million. One main tradeoff is that these nanosatellites are not powerful enough to handle large data transfers, such as video or voice calls, but are instead designed to relay the tiny packets of data that IoT applications such as asset tracking, agriculture, and fleet management generate. While nanosatellite constellation networks have yet to be fully deployed, these startups are leveraging lower barriers to entry in the satellite telecommunications market to reduce long-term solution costs and reshape the IoT connectivity landscape moving forward.

Beyond Vertical-Specific Use Cases

IMPACT


Satellites are a key component in providing connectivity for IoT solutions but have historically been cost prohibitive and limited to only mission-critical and industrial applications. Additionally, traditional satellite solutions have not been suitable for the vast majority of IoT connections due to higher latencies, power consumption, and maintenance costs. For 2019, ABI Research forecasts that satellite connectivity fees will be almost 15 times higher than cellular connectivity fees. By lowering these connectivity solution costs for end-users, nanosatellite companies will expand the market for satellite-connected IoT solutions, particularly for asset tracking, telematics, and fleet management applications. By deploying solutions in Low Earth Orbit (LEO) as opposed to the traditional Geosynchronous Orbit (GEO), these startups will reduce the battery loss, latency, and signal issues that have plagued existing satellite solutions.

For the 90% of the world not covered by cellular networks, such as in developing areas like Latin America where less than 1% of rural regions have cellular coverage, low-cost satellite coverage can enable better resource management solutions that rely on agricultural sensors, water monitoring devices, and smart meters. These coverage gaps create a strong use case for satellite-enabled IoT connectivity, and existing nanosatellite startups have plans to currently launch 1,600 small satellites devoted to enabling lower-cost IoT solutions.

  Share of Satellite Connections by Application Category  

Satellite and Cellular Cooperation

RECOMMENDATIONS


For these startups to succeed, they will have to successfully expand existing satellite market share while also increasing demand for IoT solutions. Additionally, these new entrants will have to compete against not only each other, but also the existing satellite telecommunications providers who already have an existing customer base across multiple vertical industries.

One method to establish and grow market share is to cooperate with mobile network operators that deploy 5G networks. These operators are investing billions of dollars in research, infrastructure, and deployment costs and are realizing that the primary 5G use cases—such as fleet management, OEM telematics, and agriculture—will require more than just traditional terrestrial cellular networks to generate significant returns on investment.

3GPP, the association driving 5G development, has recognized the value that satellite coverage can bring to enabling mission critical and industrial 5G use cases where ubiquitous coverage is essential. 5G is frequently described as “a network of networks,” and, as such, satellite is a critical component of enabling universal 5G coverage and services. Additionally, by partnering with MNOs, satellite operators can help them extend their footprint into remote regions difficult to serve with cellular infrastructure. 3GPP has identified four use cases satellite can bring to 5G:

  1. Delivering service to underserved areas
  2. Enabling network availability to moving platforms such as aircraft, ships, trains, and buses
  3. Address critical communications in railway, maritime, and aeronautical applications
  4. Scale 5G network deployments by directing data delivery to the network edge or on-device

Satellites complement other cellular communications infrastructures, and this hybrid satellite/cellular approach can be leveraged to ensure end-user access to a wider swathe of IoT services and applications at a lower cost. By addressing solution costs and end-user needs, these nanosatellite startups could extend the value proposition of satellite solutions, thereby expanding the potential addressable market for IoT solutions and redefining the connectivity landscape.

Services