Can 3GPP standards progress the adoption of satellite IoT?

Due to the high cost of building, launching and maintaining a satellite network, utilising satellite connectivity for IoT applications has historically come with a premium price tag. Over the last decade, that price has been decreasing. This is chiefly due to the lower cost of launching satellites, and the trend for launching smaller satellites into Low Earth Orbit (LEO).

In 1995, the cost of launching a satellite was $26,884/Kg; in 2020, that had reduced to $951/Kg. Plus, since Iridium launched their LEO satellite constellation in 1997, almost every subsequent launch has been into Low Earth Orbit. Satellites designed for LEO are usually smaller and lighter than their geostationary counterparts, which again lowers the cost of launch. As an example, ViaSat-3 Asia-Pacific, a recently launched geostationary satellite, weighs 6,500 Kg. Each Iridium (LEO) satellite weighs approximately 1,000 Kg, and a Swarm (also LEO) satellite weighs 468 Kg.

With lower launch costs, companies have less capital to recoup, which brings prices down. And with less funding needed to launch a satellite or two, more players have entered the game. This comes with the potential to drive costs down further due to competition, and diversified service offerings (both of which we’ll return to shortly). But this is where we come to our first hurdle: the requirement for massive subscriber numbers.

Subscriber numbers

NewSpace Index lists over 70 companies set up to launch satellites to serve the IoT / M2M industry. Of these, more than half have been cancelled before launching satellites, or after prototypes were launched. Only three are complete: Iridium and Orbcomm, both of whom are well-established  ‘legacy’ players in the satellite industry, and Swarm, which has since been absorbed into Starlink, and is no longer being developed.

So it’s important when we talk about the future of satellite IoT connectivity to bear in mind that very few satellite network operators (SNOs) aiming for the IoT / M2M market have been able to maintain the momentum needed to bring their vision to life.

It is still expensive to build, launch and maintain a satellite network, albeit less so, and most companies need to be able to demonstrate that they will deliver a return on investment within a defined time frame. Companies promising extremely low costs will in turn need to grow their subscriber base extremely quickly in order to deliver shareholder value. This proved easy for Starlink as it disrupted the satellite broadband industry, but will be more challenging for satellite IoT as the value per subscriber is so much lower than a broadband user.

Further, the large number of new entrants and all of the accompanying hype may have left end users confused about what’s genuinely available. In the absence of certainty, decisions may be postponed or the trusted incumbent is chosen; so the massive number of new subscribers needed to make these new satellite networks commercially viable haven’t materialised… yet.

Proprietary vs. standards-based

To date, to communicate with a satellite network, you need a proprietary modem such as the Iridium 9603N. Add this modem to your drone, data buoy, tractor or tracking collar and, assuming you have a clear view of the sky and an orbiting satellite overhead, you’ll be able to transmit IoT and tracking data over satellite.

This option tends to be favoured by satellite network operators who already have an established satellite network, as you don’t have to change the already-orbiting satellites’ design.

The drawback for a user is that if you decided to change to a different satellite network, for better coverage or pricing, for example, you would need a new modem. And given that satellite IoT-enabled devices are almost by definition unmanned and in remote locations, changing the hardware is not a trivial matter. It makes satellite IoT customers extremely ‘sticky’, and for existing deployments, that’s unlikely to change in the near future.

The alternative is to launch new satellites that are compatible with unmodified terrestrial devices. This is possible because there’s now a shared standard called 3GPP. This makes devices and satellites interoperable when they’re both designed and built using the 3GPP standard.

Unsurprisingly, it’s the newer satellite network operators, the ones who are in the process of establishing their networks, who have opted for this. But by no means all new satellite networks are opting for standards-based: Swarm, Kinéis, SAS, Astrocast and Myriota are all new entrants who have opted for a proprietary model.

The proprietary model is not in and of itself a barrier to lower costs. While new viable satellite networks are not popping up like daisies, we are going to see more operators in this space (no pun intended), and the competition will drive down costs. But certainly, standards-based devices will drive down costs further. Users will be able to switch between satellite network operators (assuming sufficient coverage in their area) without needing to update their hardware, which will encourage SNOs to be more competitive on price.

In addition to lower priced airtime, we can expect lower priced modems, because a single modem would, in principle, allow you to communicate with multiple satellite networks (and terrestrial networks). So the volume of modems produced will increase, bringing the build costs and therefore the selling price of the physical hardware down.

Sounds great – what’s the catch?

It’s not exactly a catch, but the new satellite network operators (proprietary and standards-based alike) have hurdles to overcome. Chief among these challenges is spectrum allocation.

In order to prevent congestion and improve coordination of a limited resource, a good proportion of radio spectrum is licensed. The frequencies reserved for satellite communication are called Mobile Satellite Services (MSS). A satellite network operator with a licensed MSS spectrum doesn’t need any additional agreements with terrestrial networks (i.e. mobile network operators like T-Mobile) to send and receive data from a compatible terrestrial device.

L-band is perhaps the best radio spectrum for IoT applications, because it’s highly weather resilient; antennas are small, improving installation flexibility; devices consume relatively little power (essential for battery-powered systems), and it’s a more efficient use of the spectrum (i.e. more cost-effective) than using the higher bandwidth Ku- and C-band technologies. However, L-band is licensed, and these licences have already been allocated to established satellite network operators like Iridium, Inmarsat / ViaSat and Thuraya.

New entrants have three options:

• Option one: they work with another radio spectrum, usually shared UHF / VHF
• Option two: they work with terrestrial networks to repurpose cellular spectrum
• Option three: they work with the existing SNOs to rent their spectrum.

Shared UHF / VHF isn’t really scalable: there are congestion and capacity issues. It also runs into regulatory challenges in some parts of the world, and has issues penetrating obstacles like forests or rough terrain. But where there isn’t a huge amount of competition, and the geography isn’t a hindrance, it’s a viable option. This was Swarm’s model, and it’s the current model operated by Australia-based Myriota.

Working with terrestrial networks – mobile network operators (MNOs) like Vodafone, Verizon and Telefónica – is the path taken by many new entrants. If a company can persuade the MNO to reallocate part of its spectrum to be used by the SNO, they have a means of providing service to the country (or countries) where the agreement is reached. Agreements have to be made on an MNO-by-MNO basis, and so this strategy is unlikely to deliver global coverage. But if you can get a couple of large networks to work with you, you have the beginnings of a service. The goal would be to prove the concept (and the value of the revenue share) and gain more agreements over time. This is the option chosen by Spain’s SatelioT.

Working with existing SNOs who already have licensed MSS spectrum and landing rights is the fastest way to achieving global service and a high capability network. The existing SNOs will be very wary of cannibalising their own user base, and so will likely require that their partners don’t dramatically undercut their pricing. But given the huge IoT spectrum advantage they have, they’re going to be important in the success of future IoT networks, both proprietary and standards-based. Skylo is currently partnering with Inmarsat / ViaSat, and Astrocast with Thuraya, though regionally limited.

What now for users with a remote IoT connectivity challenge?

In the near future – potentially even in 2024 – we’ll start seeing some of the new entrants deliver service. In many cases, it’s going to be very low cost relative to the incumbents’ pricing, but for all of the reasons listed above, it’s also going to be low capability. If the new entrant has only a small number of satellites, then transmission times will be slow – maybe once or twice a day. Irrespective of the number of satellites, the new entrants’ coverage will be shaped, and often limited, by their partnership reach, and potentially their choice of radio frequency.

We see a two-tier market in the near future, with low cost, low capability as a new service option. But we don’t see this massively disrupting the higher cost, high capability networks that already exist today. Everywhere that satellite IoT is utilised today is basically mission-critical: pipeline monitoring, tsunami, flood and wildfire alarms, asset tracking, weather reporting, remote security alerts – this list goes on, with a shared characteristic that the data is needed in real-time. The new service will unlock new satellite IoT applications which don’t require real-time data transmission, growing the market rather than cannibalising the existing one.

This could change in a heartbeat if the existing SNOs decided to lease their spectrum rights more broadly, but that seems, at least in the near future, pretty improbable. So, if your use case is mission-critical, don’t waste time waiting for the holy grail of super low cost and high capability service.