The Critical Link

The fact that Low-Earth-Orbit (LEO) constellations are transforming the space industry has become conventional wisdom. What isn’t so easily understood is exactly how LEO will integrate into carrier networks and unlock new markets and services.  

As they often do, the research firm NSR, an Analysys Mason Company, stepped up with a report exploring the issue. It’s titled Telecom-Satcom Digital Network Integration—The Keys to New Market Opportunities.

The report highlights three main growth opportunities for enterprise-grade services from carriers – Carrier Ethernet Networks, Cloud Extensions, and 5G applications.

Global enterprise services represent a $4 Trillion market, according to Gartner Research. Despite recent revenue growth stagnation, enterprise services are a growth opportunity because currently enterprise only makes up on average 15-25 percent of telecom operator total revenue. This is mainly because internet service providers (ISPs) and mobile network operators (MNOs) have been beaten to the punch by the Internet giants and their powerful cloud platforms and superior user experiences. From the report:

“Ownership of wide-area networks and granular network capillarity via expanding points of presence close to enterprise customers are key advantages that telecom carriers can leverage. Joining forces with satellite service providers and operators thus becomes natural for expanding managed services solutions to distant or hard to reach locations, as showcased by a recent wave of distribution partnerships between major telecom operators with emerging LEO players.”

5G is an accelerating technology trend driving satellite and telco networks together. A transformative move is the use of non-terrestrial networks (NTNs), such as LEO satellites, which will be fully integrated into terrestrial networks to create hybrid terrestrial/non-terrestrial 5G mobile infrastructures to serve enterprises and consumers. An NTN could connect directly to devices or provide backhaul for a local terrestrial network. Enterprise-class LEO networks can create “virtual fiber” networks that can reach any point on the globe.

NSR forecasts 5G VSAT revenues to be a US$8.5 billion market by 2030. More from the report:

“The inclusion of Non-Terrestrial Networks (NTN) into the definition of 5G represents indeed an opportunity for satellites to directly communicate with 5G mainstream devices (cellphones, IoT), thus potentially unlocking a massive addressable market, leveraging global scale distribution. Interoperability between satellite and carrier network systems will be a necessary first step towards the more expansive goal of satellite support for 5G.”

Of course, this kind of integration can only occur with LEO networks that choose to work with telecom service providers. Some LEO constellations will offer best-effort broadband straight to consumers. Telesat’s approach is to partner and complement telecom service providers, rather than trying to compete and disrupt the existing industry ecosystem. Telesat Lightspeed can provide its customers with a city-like broadband experience, no matter how rural or remote their location.

Enterprise-class LEO means delivering high throughput data links with guaranteed performance that is on par with terrestrial fibre. Services will be delivered with committed information rates and guaranteed service level agreements (SLAs). Telesat Lightspeed will be certified to MEF 3.0 standards for carrier Ethernet connectivity, ensuring easy integration, and leverage MEF Lifecycle Service Orchestration (LSO) APIs to automate back-office business and operations processes between Telesat and the carrier, enabling service providers to accelerate revenues and offer a differentiated customer experience. Additionally, service providers can also land traffic in-country or in-region, enabling sovereign control of their data.  

That’s the kind of enterprise-class LEO service that will expand carrier networks and open up new enterprise market opportunities.