With technological advances bringing satellite connectivity to the fore again, policymakers have identified core uses for space-based communications. We outline the role for satellite connectivity and consider the limitations for broader adoption.
Advances in direct-to-device services and low Earth orbit infrastructure have been key to growing optimism around satellite connectivity. However, the dominance of big tech firms, including SpaceX and Amazon, has renewed anxieties around big tech’s ambitions in communications markets.
National governments have invested significantly in the development of satellite connectivity. Nonetheless, they continue to plan for more limited, specific uses for satellite internet, recognising satellites cannot replace terrestrial networks but can help towards meeting connectivity targets.
Mobile operators have formed a number of partnerships with satellite firms to extend network coverage. Regulators, including the US Federal Communications Commission, have responded by modifying spectrum management frameworks to allow for more flexible use in mobile bands.
Satellite connectivity has also been embraced as a tool to advance rural connectivity aims. Australia and Sweden have both acknowledged the importance of satellite connectivity for connecting the hardest to reach communities.
Both network resilience and broader digital sovereignty efforts can be supported by satellite infrastructure, with EU investments billed as an effort to challenge US tech firms and China in satellite development.
Satellite connectivity remains constrained both by its lack of affordability and the technical constraints of space-based infrastructure. For now, it’s poised to make small steps in network access and resilience as opposed to a giant leap ahead of the telecoms sector.
Technological developments have renewed both optimism around satellite connectivity and anxiety around big tech’s dominance
With innovations in the use of low Earth orbit (LEO) satellite constellations and satellite-to-device compatibility, the possibility of reliable and expansive communications networks connected via satellite appears increasingly feasible. Though mobile networks operators and governments have long been engaged in work to develop satellite connectivity, the technological developments powering a renewed age of optimism are largely credited to the work of big tech firms.
As an innovator in scaling LEO constellations, Starlink, a subsidiary of SpaceX and Elon Musk’s broader list of tech holdings, has come to dominate the market for consumer and government satellite connectivity while Amazon’s Project Kuiper is rapidly growing into a key challenger in the market. Apple’s 2022 announcement that new generations of iPhones would support direct-to-device (D2D) satellite connectivity for emergency communications greatly accelerated the anticipated timeline for adoption of satellite-to-mobile services. Given the recent leading role of big tech in driving the development of satellite connectivity, anxieties around the ambitions of these firms to move into telecoms markets as communications providers have understandably grown. Viable competition in compatible device and satellite infrastructure markets remains limited globally, supporting the idea that satellite could present another ‘winner take all’ opportunity for big tech.
Though governments are more optimistic, satellite is not currently seen as a replacement for terrestrial networks
Noting this technological advancement, a number of countries have recently invested significant sums of public funding to realise satellite connectivity capabilities, often through domestic firms. In 2021, the UK Government committed approximately $500m (£400m) to acquire a significant holding in London-based OneWeb following its bankruptcy in 2020. This year, the Canadian Government announced a C$2.14bn (£1.2bn) loan to Telesat to fund its Lightspeed constellation. The US Government was also prepared to grant $885m (£660m) to SpaceX in 2020 to fund rural broadband programmes before the firm failed to demonstrate its ability to achieve certain performance metrics in a secondary application.
Despite these investments, policymakers do not yet appear convinced of the potential for satellite connectivity to replace current communications networks. Ofcom in the UK has recently launched an expansive consultation to better understand the various use cases for satellite connectivity, but broadly, regulators around the world have generally planned for limited applications of satellite connectivity within the execution of broader public policy goals for communications networks. Said most succinctly in the EC’s recent white paper on digital infrastructure, “while satellite services can bridge the digital divide, they cannot currently replace the performance of ground-based networks”. Instead, governments see satellite connectivity as a complement to terrestrial mobile networks, a tool to improve rural and remote connectivity and a source of improved digital resilience and sovereignty (see Table 1).
Amendments to spectrum rules are making way for satellite to act as a complement to terrestrial mobile connectivity
Satellite connectivity has provided opportunities for collaboration in the mobile market for decades. Given the number and the value of partnerships emerging between telecoms operators and satellite firms, it is unsurprising that regulators have considered how existing frameworks can govern this evolving communications landscape. New or revised spectrum management frameworks have been a critical piece of that regulatory preparation.
In the US, for example, the Federal Communications Commission (FCC) adopted its Supplemental Coverage from Space (SCS) Framework in March 2024 as a response to the development of telecoms-satellite partnerships. The framework authorises mobile operators to extend coverage through cooperation with satellite connectivity providers using licensed, flexible use spectrum. In order to be eligible, satellite operators must have a spectrum lease agreement with their terrestrial partner and existing satellite licensing under Part 25 of the FCC’s rules while relevant device equipment certification must be updated to include SCS authorisation. The regime authorises flexible use in the 600MHz, 700MHz, 800MHz, 1.8GHz and 1.9GHz bands. Other regulators, including Innovation, Science and Economic Development (ISED) Canada and Brazil’s Anatel have similarly sought to modify spectrum rules to allow for greater collaboration, either by amending spectrum sharing rules or including regulatory sandboxes in spectrum licence terms.
Governments have embraced satellite internet as a tool for achieving rural connectivity goals
Governments have also looked to satellite connectivity as a tool to deliver residential connectivity to rural communities. The potential ubiquity of satellite connectivity is seen to present a cost effective alternative to extending fixed line or even fixed wireless access (FWA) connections to remote homes in pursuit of universal service improvements, such as the Digital Decade targets in Europe or Project Gigabit in the UK.
Sweden’s Post and Telecom Authority (PTS) has relied on satellite as the “the only realistic alternative” to delivering connectivity across sparsely populated rural communities. In its annual progress report on Sweden’s national broadband strategy, the PTS stated that satellite technology would support at least a 30Mbps connection to the approximately 6,000 premises still lacking it, thereby delivering on a 2025 coverage target set by the Government. The Australian Government has similarly invested in improvements to the state-owned National Broadband Network’s (NBN) satellite offerings alongside continued investments in FWA services for rural and remote communities. In 2023, the Government announced that the NBN’s Sky Muster satellite services would shift to an unlimited data allowance while it also invested in moving 120,000 premises to an FWA connection, freeing up additional satellite bandwidth. Both government’s investments demonstrate a distinct role for satellite internet in reaching ubiquitous connectivity.
Satellite presents a path to improved network resilience, as well as a less tangible degree of digital sovereignty
Apple’s promotion of D2D connectivity for emergency communications demonstrates how embracing satellite connectivity can offer gains in network resilience. For individual users, the more expansive coverage offered by D2D satellite connectivity ensures that they will always be able to reach emergency service providers regardless of the quality of terrestrial network coverage and the presence of not-spots. For communities and governments, having critical infrastructure set in orbit and away from terrestrial weather conditions ensures that communications systems remain operational through natural disasters. Satellite has been central to maintaining connectivity through humanitarian crises which interfere with or damage terrestrial infrastructure, including during the war in Ukraine.
In addition to these tangible improvements in network resilience, some governments are investing in satellite connectivity as a means to achieve a more ill-defined security or digital sovereignty. Not unlike the space race of the 20th century, satellite connectivity has become an exercise in extending geopolitical power. Both China and the EU have announced extensive spending plans to develop publicly owned satellite constellations in the coming years, aiming to challenge the dominance of US-owned constellations such as Starlink and Project Kuiper. In both contexts, policymakers foresee the potential to strengthen diplomacy around the world by offering alternative connectivity services to other countries instead of big tech affiliated satellite projects. However, the EU’s IRIS2 constellation, in which the bloc will invest an estimated €3bn (£2.6bn) in public funds, will also be used to conduct surveillance, demonstrating the fine line which separates the military and civilian uses for public satellite installations. As attention has recently turned to the security of terrestrial networks, including subsea cables and mobile infrastructure, the strategic geopolitical importance of sovereign satellite infrastructure will likely be an increasingly important justification or use case for the technology.
Satellite connectivity is still limited by affordability and technical challenges
Satellite technology has made significant progress and gained much greater acceptance among governments. However, its potential to compete with or even substitute for terrestrial networks remains limited. At a consumer level, satellite internet is consistently less affordable than terrestrial-based connections (see Figure 1). In the context of rural connectivity, satellite might be the only option available to consumers and may receive public funding dedicated to improving accessibility. Therefore, affordability should be understood as a significant limitation for uptake in this use case. As highlighted by the PTS in Sweden, this lack of affordability is also often paired with a perception among consumers that satellite connectivity is inferior to fixed connections. Taken together, this lack of consumer understanding and interest reflects a limited demand for the technology that could complicate governments’ promotion of satellite connectivity even for specified uses.
More fundamentally, satellite connectivity continues to face technical limitations that hinder its ability to compete with the performance of terrestrial networks. Though the growth of LEO constellations has improved quality of service, satellite internet has historically been plagued by poor speeds, latency and bandwidth. Many retail satellite providers still cap consumer data usage and fail to achieve similar speeds to terrestrial networks. D2D connectivity has also been largely limited to low-data services, as in the case of Apple’s emergency communications system. Despite satellites’ reputation for resilience, more mundane meteorological conditions such as snowfall can also degrade satellite service quality by interrupting signals. LEO satellites tend to have a shorter lifespan than earlier, higher orbit fixtures. More frequent replacement of this infrastructure is complicated by the high expense of building and launching satellites as well as by the accumulation of space debris threatening the sustainability of the system. Reading the limitations of satellite connectivity and governments’ targeted approach to supporting satellite development together, it appears unlikely from a commercial perspective that satellite connectivity can overtake terrestrial communications networks in the near-term. Instead of representing a giant leap ahead of the telecoms sector, satellite connectivity is instead making small steps towards expanding internet access and improving global network resilience.
