Will Satellites Spoil the Rural 5G Buzz?

Space-based disrupters compete to connect remote communities

As wireless operators make plans to earn a return on the billions of dollars they’ve invested in 5G spectrum, either through auctions or acquisitions, bringing broadband connectivity to rural areas through fixed wireless access has become a common theme. This is particularly true in the US, where millions of people live in isolated communities with no access to landline broadband.

A couple of weeks ago, each of the three major wireless carriers in the US held events to update investors about their strategies. Exploiting spectrum investments was a recurring and timely theme in light of the tens of billions of dollars that carriers spent on the recently completed C-band spectrum auction in the US; Verizon alone spent almost $53 billion on spectrum licences, incentive payments and clearing costs. Investors certainly must have been curious about their long-term intentions.

The carriers were eager to talk about how 5G will enable them to compete with broadband providers, particularly when it comes to bringing fast connectivity to remote areas. But if wireless carriers are celebrating the potential of connecting underserved communities using a new technology to compete with others, several well-funded and well-known industry outsiders are set to bring their own competitive service using another type of technology: low-Earth-orbit satellites.

SpaceX’s Starlink and Amazon’s Project Kuiper are two players looking to a break away from terrestrial access, relying instead on base stations in space. If this sounds like a fanciful idea to steal attention from established players, consider that Starlink is already serving broadband to 10,000 customers. The company said that download speeds are at 100 Mbps or above, with upload speeds of 20 Mbps — that’s more speed than most people had just a few years ago.

SpaceX has been launching Starlink satellites on its Falcon 9 rockets in batches of 60 at a time, and launched its 17th lot on 20 January 2021. It now has roughly 960 functioning satellites in orbit, heralding an age of mega-constellations. Starlink’s array in low-Earth orbit, closer to the planet than traditional satellites, is enough to enable SpaceX to roll out service along a wide swathe of North America and the UK. As SpaceX sends up more satellites, the coverage area will grow, as will the number of potential customers.

The US Federal Communications Commission (FCC) coordinates trajectories and use of radio frequencies in the country. At the end of 2020, it awarded SpaceX $885 million in subsidies as part of a wider effort to bring broadband to over 10 million people in rural parts of the US. SpaceX will focus on 35 states, including Alabama, Idaho, Montana and Washington.

Starlink isn’t just a competitive threat to the rural plans of wireless carriers: it could make the services of other providers of satellite-based broadband such as Viasat and Hughes seem outdated.

Starlink, however, is not alone in this space race. Amazon founder Jeff Bezos is working on Project Kuiper, a small constellation of satellites in low orbit, to provide Internet coverage. Amazon describes Kuiper as “a long-term project that envisions serving tens of millions of people who lack basic access to broadband Internet”. This constellation will total 3,236 satellites, as per the current plan approved by the FCC. According to Amazon senior vice president for devices and services, Dave Limp, “There are still too many communities where Internet access is unreliable or prohibitively expensive”, and Project Kuiper will help to close that gap.

Networks of low-Earth-orbit satellites are certainly filled with complexities and uncertainties. Case in point, OneWeb, a UK company that raised $3.4 billion from investors including Airbus and SoftBank on the promise of “Internet access everywhere, for everyone”, but filed for insolvency in March 2020. The company was later bailed out by the UK government and Indian operator Bharti Airtel. It plans to start high-speed Internet services in India by mid-2022. In December 2020, it launched 36 satellites, taking its total to 110. OneWeb aims to reach a total of 648 as part of its plan to deliver high-speed and low-latency broadband services globally. In particular, this will boost rural broadband connectivity in India and other developing countries, including those in Africa.

Satellite connectivity is slowly emerging as a popular option to expand broadband coverage into hard-to-reach locations as rival technologies such as Google’s Loon have bit the dust. Broadening the reach of the Internet has never been more important as the pandemic has highlighted the true value of connectivity amid fears of a growing digital divide.

The biggest challenge, however, is affordability. Space is a huge and risky investment and it may take many years before devices fall sufficiently in price to become attractive to the mass market. This will be particularly relevant in emerging markets, which arguably have the greatest need for enhanced coverage.

Each access technology should eventually find its own space, with 5G being a real option for the last mile, as long as that’s not restrictively remote. And in many parts of the US and the world, satellites could cover that last mile from a thousand miles up.