Unified Satellite Voice Seen Needed in 5G Standards Setting

Involvement in standardization work requires continuous activity, and terrestrial mobile interests have "more boots on the ground" and resources than the satellite community, said SES Senior Vice President-Global Regulatory and Governmental Strategy Gerry Oberst. He said SES is active in bodies from Europe's 5G Infrastructure Public Private Partnership to the ITU-Radiocommunication working group working on 5G standards for satellite. He said operators need to be a more unified voice in preserving satellite access to the spectrum bands that will play a big role in 5G -- Ka, Ku, C, V and Q.

Echoed Thales Alenia Space R&D and Product Policy Director Didier Le Boulc'h, satellite is "the little guy in this race," with terrestrial interests having far more clout with regulatory and policy bodies. Beyond standards, satellite needs to continually get data costs more competitive with terrestrial if it wants to be a part of the 5G network of networks, he said. Cost of a few cents per gigabyte "is not impossible, but it's a challenge," he said.

Quilty Analytics analyst Justin Cadman said the C-band plan could be a financial shot in the arm for satellite operators in that spectrum, and called it "a smart move" coming proactively before the FCC acts to free up that band for terrestrial use. Given the size of those operators' C-band businesses vs. the potential value of that spectrum -- in the tens of billions of dollars -- the C-band plan "is a no brainer," he said.

Some experts said it's still unclear how many of the low earth orbit (LEO) constellations are pending before the FCC and which ones will launch, let alone be economically viable. The satcom industry's ongoing convergence with the broader telco industry could bring substantial demand that would make a LEO constellation like OneWeb's potentially profitable, Cadman said. He said LEOs could have a bullish future if they are accompanied by developments in low-cost ground terminals, but without that tech, LEOs could face trouble. Speakers said it's unlikely even half of the NGSO constellations currently before the FCC will get off the ground. "OneWeb will get there, perhaps one other," Cadman said.

The mobile communications market is huge, so there's more than enough demand for LEO capacity, Kymeta CEO and founder Nathan Kundtz said: "The question is, what price point?" Kay Sears, Lockheed Martin vice president-strategy and business development, Space Systems, said LEO operators may need to better define their business case and decide whether to focus on network operator or data products. "Those two models are very different," she said. She said LEO operators' business models likely will change multiple times before they launch. Deloitte consultant Jeff Matthews said a "big blind spot" for many LEO operators is ground segment technology. He said many started assuming -- often incorrectly -- it's easy to get capital to build ground networks or that existing technology was available to do what they wanted.

Earnings for major publicly traded satellite operators have been fairly resilient, while their capital spending is becoming more efficient as hybrid and high-throughput constellations get greater capacity out of the same costs per megabit, Northern Sky Research President Chris Baugh said. But capacity pricing continues to plummet, with estimates of a decline of 35 to 60 percent between 2016 and the end of 2019, he said. Mobility pricing is being particularly hard hit, while areas like video and direct to home are holding up somewhat better, Baugh said. He said venture capitalists investing in space grew notably over the past handful of years, now numbering more than 120, and the number of emerging space companies established annually is close to 60, nearly double 2012.

Speakers said there's need for satellite operator consolidation. But Wells Fargo analyst Andrew Spinola said: "Everyone predicts 'it's this year' every year and nothing happens." Cadman said such deals have run up against a too-wide spread between buyers' bid prices and sellers' ask prices. Cadman said revenue growth for satellite operators is at least "a couple years away," and the industry needs to focus on going after end-users in selected markets with price-competitive offerings. Spinola said in some areas of data, fixed satellite service operators might never return to revenue growth. "There are a lot of people interested in shorting satellite stocks," and not many are interested in investing, Spinola said.

For verticals like broadband access, cellular backhaul and enterprise data, the Q/V band is "the next frontier," said L3 Technologies Vice President-Business Development Christophe Bauer. He said that spectrum, widely available globally, offers close to 5 GHz of continuous downlink spectrum, while the C- and Ku-bands are far more congested. Bauer said with a variety of satellite operators having expressed interest in the V-band, the first commercial deployment likely will come within the next decade. He said L3 is working on Q-band gateways now for a commercial operator planning to deploy there.