Part II: LEO Systems Analysis
While our Part I report provided a historical retrospective on failed LEO efforts of the 1990s, our Part II report focuses squarely on the here-and-now, providing a comprehensive overview Amazon, OneWeb, SpaceX, and Telesat.
Our ~80-page report breaks down the opportunities, risks, and leading players across five major spheres. A narrow sampling of considerations and takeaways includes:
- Spectrum. OneWeb and Telesat are in the drivers’ seat. Amazon is still working on a strategy.
- Space Segment. Space segment price per bit varies widely. And despite the universal appeal of optical inter-satellite links (O-ISLs), Telesat is the only company today to baseline the technology on Gen1 satellites. Do O-ISLs have implications for a key LEO competitive advantage, latency?
- Launch. SpaceX’s order of magnitude cost advantage and its launch cadence control gives it design freedom (both satellite and network) that others can only dream of.
- Ground Network. There is much work to be done from a gateway infrastructure standpoint. Immaturity (unavailability) of low-cost FPAs, a potential LEO Broadband Achilles’ heel, will impact some LEO Broadband operators more than others.
- Sales and Distribution. Sales and distribution is a key driver of success, and it is an area that many fellow industry-watchers have glossed over. Amazon has a secret weapon, but what of the others?
- Financing. This is the story of the haves and the have-nots. And beyond simple access to capital, operators’ cost of capital can confer unique competitive advantage (or disadvantage).
The four key LEO Broadband players are often discussed as a group. But with vastly different system architectures, serving what our analysis indicates will be quite distinct addressable market segments, these operators are anything but a coherent group. These nuances may result in the difference between simple GEO bandwidth substitution (problematic) versus fully weaving SATCOM into the broader global telecom landscape (exciting).
Ultimately, LEO Broadband operators’ fate will be sealed by their cost structure, execution to plan, and access to financing – and their success or lack thereof depends on exercising sales and distribution muscle and surviving to Gen2.
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