The Critical Link

The emerging market for Low Earth Orbit (LEO) constellations is ripe with opportunity, paving the way for multiple providers to achieve significant market success. The LEO sector is not destined to be a winner-take-all market; instead, it presents vast opportunities fueled by advanced technology revolutionizing space connectivity.

The addressable market for LEO services is enormous, with Telesat estimating the enterprise market for LEO broadband connectivity to be US$320 billion. Capturing just one percent of this market translates to US$3.2 billion in revenue by 2030. This expansive potential is echoed by leading analysts who agree on the opportunity, profitability, and viability of LEO broadband constellations.

At the recent Satellite 2024 conference, NSR, a leading analyst firm, stated that one of the show’s “Burning Questions” was, “Is it possible to build a profitable LEO broadband constellation?” Their answer was a resounding yes, highlighting that building a profitable LEO broadband constellation is possible and probable with sufficient capacity, addressability, and market capture.

Another leading firm, Quilty Space, analyzed Telesat Lightspeed after our August 2023 funding announcement, reaffirming this optimism. They emphasized the critical needs of enterprise and government customers for high-quality broadband with Committed Information Rates (CIRs) and robust Service Level Agreements (SLAs).

Several technical innovations underpin the success of multiple LEO constellations. Moore’s Law – the observation that the number of transistors on a chipset doubles every two years while costs fall – has arrived in space with full force. These breakthroughs have made LEO constellations incredibly powerful and financially viable, with the ability to offer improved satellite bandwidth with terrestrial-like pricing. Some of these advancements for enterprise-class constellations include:

• Optical inter-satellite links (OISLs): The use of OISLs creates a highly resilient mesh network in space, providing improved data routing versus “bent pipe” satellite architectures, which require multiple hops or connections to transmit data from one part of Earth to another. OISLs eliminate these hops, reducing the number of landing stations required to deliver global services while providing a highly robust and resilient service

• System management: Artificial intelligence, machine learning, advanced analytics, and system orchestration have dramatically improved usable capacity and service management.

• Digital direct radiating antennas: Design and technical enhancements to antennas on the spacecraft have resulted in better link performance, increased network efficiency, and enhanced flexibility to focus and dynamically deliver capacity to our customers. When combined with onboard processing, the Telesat Lightspeed network can support multi-Gbps links to various user terminals and dynamically aggregate massive amounts of capacity within a demand hot spot like an airport hub or remote community.

• Manufacturing: Unlike the typical three-year satellite manufacturing run for a single geostationary satellite, LEO satellites can leverage advanced assembly-line manufacturing, which drives down costs. One satellite per day will be delivered for Telesat Lightspeed.

The future of LEO constellations is bright and full of promise. Five years ago, few would have predicted how fundamentally LEO constellations would transform the space market. And no one today can guarantee what the next five years will deliver.

What can be predicted with confidence is that it won’t be winner-take-all. With technological advancements continuing and a vast and growing addressable market, multiple providers are well-positioned to capture significant market share and drive the next wave of innovation in space connectivity. At Telesat we’re ready to lead the charge into an exciting new frontier.