The New Space Race: Automating Satellite Connectivity to Boost Revenue

Communications service providers (CSPs) are turning to satellite backhaul as a cost-effective and flexible solution for extending 5G coverage and capacity in remote and hard-to-reach areas, and they are eager to tap new revenue by providing direct device-to-satellite connectivity to customers. The key to maximizing the benefits lies in operators’ ability to automate provisioning, activation, orchestration and management of satellite capacity.

“For many years satellite solutions were only an alternative when other options were not viable technically and/or economically,” said Telefónica Global Solution’s Enrique Macho Mateos in a recent interview with Via Satellite. “The old paradigm of satellite – latency, price, SLA [service level agreement] – is being shot down before our eyes.”

Telefónica and other CSPs believe 5G will accelerate use of low-Earth orbit (LEO) and medium-Earth orbit (MEO) satellites for backhaul and direct-to-customer connectivity. While traditional geostationary (GEO) satellites fly 36,000 kilometers (about 22,000 miles) above Earth, LEO satellites launched by SpaceX, OneWeb and Iridium fly much closer to Earth. SpaceX’s Starlink satellites, for example, fly just 550 kilometers (about 340 miles) above Earth. Because of their proximity to the planet and ability to orbit it quickly, LEO satellites can provide global coverage while ensuring minimal latency (less than 30 milliseconds).

Backhaul and beyond

The primary driver for satellite backhaul is extending coverage in rural and remote areas where there is no terrestrial network or it’s not economically feasible to build one. The International Telecommunication Union’s (ITU’s) latest data highlights the criticality of this issue globally: 13% of the rural population in the world’s least developed countries have no mobile signal at all, and only a third have access to a 4G network.

In many regions, regulators are requiring and incentivizing CSPs to expand connectivity to such areas. In the US, for example, the Broadband, Equity, Access and Deployment (BEAD) program provides $42.45 billion to expand high-speed internet access to unserved and underserved areas.

In October 2021 Verizon announced that it will use Amazon’s Project Kuiper constellation of LEO satellites (set to launch in the first half of 2024) initially for backhaul in areas where the operator has no terrestrial coverage, with the potential to offer services to customers via satellite later. Taking that next step could lead to new revenue, according to the analysts at New Street Research.

In a note to investors at the time of the announcement, analyst Philip Burnett calculated the potential based on 6 million to 7 million people not covered by Verizon’s LTE network spread over an area of about a million square miles. “If 50% of these people become Kuiper/Verizon customers and assuming Verizon’s phone ARPU [average revenue per subscriber] of ~$60, there could be $2.4BN in annual revenue,” he wrote, adding that the opportunity to serve enterprises could be even more lucrative.

Delivering on 5G slicing

The promise of network slicing lies in being able to support applications with very different performance requirements over the same infrastructure on demand.

By combining satellite backhaul with 5G network slicing, CSPs envision providing end-to-end network slices for customers in hard-to-reach areas (such as oil-drilling rigs or cargo ships in the middle of the ocean or remote agricultural areas where there is scant terrestrial coverage). At first, operators will use a combination of manual and automated processes to provision network slices, however, in order to scale, the entire lifecycle of network slice – and edge computing resources – must be automated. This means from ordering to provisioning, activation, orchestration and assurance – regardless of the type of underlying transport and across a mutli-vendor, multi-domain environment.

Symphonica can help operators tap this new revenue potential by automating provisioning, orchestration and management of satellite capacity from the point of view of the terrestrial network. This becomes challenging with 5G featuring dynamic network slicing.

Watch this video to learn more about how Symphonica orchestrates network slices: https://www.youtube.com/watch?v=3-TmGPlR97g