Future of satellite internet. Is it killing cellular companies?

The Internet has been one of the most potent democratizing forces we’ve ever seen in human history, connecting people worldwide. It all started with the simple source of information sharing. And now we are moving towards distributed servers and networks as part of blockchains, connecting autonomous homes, cars, and healthcare systems using robust IoT connectivity. Internet is now becoming an integral part of human society. You may also classify the Internet in different generations of maturity.

The Telecom industry came a long way from hardwire phones to cellular companies, which disrupted the old telecom business model by connecting people on cellular. It was just around 90’s when we used to pay high cellular rates even for SMS, incoming and outgoing calls. Now, all companies got converted from telecom companies to internet service providers (ISP), relying on internet data usage and giving free calls and SMS. VOIP and Internet messaging have already disrupted conventional telecom voice and messages revenue streams.

Installing a physical telephone tower network and its maintenance is always a challenge for many telecom providers. Companies are spending significant revenue on network maintenance and expansion on new geo-locations. Still, I am not talking on the Internet on flight and sea routes. Even after heavy capital expenditure(CAPEX) for around 50+ years of telecom industry presence, countries can still struggle to cover a maximum average of 65% of internet penetration on land.

High CAPEX is one of the key reasons it is venerable to any technological changes. As a result, we can see hardly a few companies can survive or grow when the industry changed from fixed-wired to wireless. In a recent example, Jio, Airtel in India is almost having duopoly, where a few years back, it had 8–9 telecom players.

Uninterrupted internet accessibility in remote areas is key for IoT success because most industrial sensors need to be installed in places where continuous manual monitoring is not?viable.

Satellite phones exist, but they have long-running technical issues like bad coverage, voice drops, and not reaching ordinary people due to high cost. So far, it is limited to special purpose use and limited to groups like sailors, military etc.

It brings in a massive gap in demand and supply. And work as an opportunity for Sattelite Internet providers to fill this gap.

Internet on IoT devices is trying to capture every aspect of human life, starting from healthcare where we are trying to have real-time monitoring of the body, until logistics moving in the middle of the sea and connecting people living on top to the hill. One of the simple benefits is that the user does not need to change cellular numbers when they travel across the country. GoogleFi is trying to achieve this by using a mobile virtual network operator (MVNO)

To address this demand, we can see new satellite internet providers trying to disrupt the telecom industry eg: Viasat, HughesNet, Starlink by SpaceX, and Project Kuiper by Amazon, OneWeb Gov. of UK, on the other hand, some existing telecom companies are also investing satellite space.

Many telecom companies already doing business diversification and investing in the Fiber networks. eg: xfinity, AT&T,JIO, Airtel on respective geographies. Some data about fiber market share in usa and in india

With that being said, some companies have already started understanding future telecom businesses and started investing either in satellite or fiber businesses.

Even though satellite Internet looks fabulous idea to disrupt the existing cellular industry and some of the big companies are already competing for this space eg?: blueorigin,spacex and lockhead martin, it is still in the inspection phase, and many challenges are yet to resolve.

1. Even though communication satellites are on the lower orbit of space and the internet speed is slow, projects like Starlink fill the sky with a massive number of satellites.
2. Producing and launching Sattelite is a high capital expense. Companies need to work on reducing production costs. The economy of Scale may be a temporary solution, but in the long run, technology needs to change to reduce the cost and size of satellites.
3. The high number of satellites on lower orbit also gives another long-term challenge of satellite collision on crowded orbits and also difficulties in space exploration.

@talk2viren