Intelsat and SES Merger – What it could mean for the NTN Market

Both Intelsat and SES have been involved in the satellite communications industry for decades, offering satellite services for different applications. SES has been active in the Non-Terrestrial Network (NTN) market since 2007, using approximately 70 geostationary (GEO) satellites, which follow the Earth’s orbit, to provide broad coverage for internet access and TV services. Intelsat, meanwhile, has over 50 high-throughput satellites in orbit that can support both fixed and mobile broadband services.

Given their legacies, both companies would appear destined to dominate the NTN space. However, recent years have seen the emergence of a number of new, disruptive players launching Low Earth Orbit (LEO) satellites that can deliver lower latency broadband services and are putting pressure on the GEO incumbents. The new operators are able to offer direct-to-home broadband and enterprise services using low-cost terminals.

Starlink, operated by SpaceX, started launching satellites in 2019 and now has 2,500 satellites in orbit. UK company, OneWeb, also started launching satellites in 2019, and has approximately 650 in orbit. And more recently, Amazon announced its intentions to enter the NTN market, with plans to put over 3,000 satellites into orbit in the next few years.

Given the competitive threat that Intelsat and SES face, it’s no surprise that there are strong merger rumors surrounding the two companies, in a deal valued at around $10bn, according to Bloomberg. Both companies are also due a combined payout of approximately $9bn from the US government, for vacating C-band spectrum which is now used by terrestrial operators. They could come together to offer a broad range of satellites, both GEO and LEO, to deliver a service to a wider range of use cases and potentially unlock new markets.

However, success is not a shoo-in. A converged SES and Intelsat will need to focus on leveraging industry standards as means to accelerate convergence with terrestrial networks, which will reduce costs and increase support for the global volumes of low cost handsets and connected devices.

NTNs, to date, have been developed in isolation, using proprietary technology, which is both expensive and timely. This is because the industry has lacked 3GPP (the telecoms standards body) standardization, which has always been important for the development of telecoms networks. As a result, the NTN market has been very fragmented. This means, from an end-user handset perspective, a chipset or handset provider can only offer support with a single satellite provider. So, for example, we’ve seen Qualcomm partner with satellite company Iridium, and Apple partner with Globalstar. Their satellite services are limited to the reach of these companies.

Samsung, aware of this limitation, didn’t announce satellite capabilities in its latest handset, the Galaxy S23, which analysts were expecting it to do. Instead, weeks later, it said that it would be introducing a standards-based 5G NTN modem.

If satellite companies like SES and Intelsat can develop their satellites based on industry standards, it will open up their networks to a wider ecosystem of network equipment, handsets, and IoT devices, driving new commercial opportunities. But this approach also offers many benefits in terms of the way that networks can be built and the services they can deliver.

In the past, each satellite constellation had unique architectures and requirements to address the challenges of operating in harsh, constrained environments, which required significant time and financial investment. However, the 3GPP last year included satellite connectivity in its global standards, Release 17. There are two potential architectures for deploying 5G NTN infrastructure: “transparent” and “regenerative.”

The transparent architecture involves a satellite acting as a repeater to connect with the gNB (the base station) on the ground. In this architecture, the satellite repeats the signal, allowing it to meet link-budget requirements, but also causing additional latency and greater feeder-link demands when operating multiple satellites.

The regenerative model has the gNB installed on the satellite itself, providing greater performance enhancements, while avoiding the need for each satellite to have good visibility of a ground station. This model is more suited for LEO constellations. With the regenerative model, each satellite can talk to neighboring satellites directly, which enables a much denser constellation of satellites and subsequently, better coverage.

The regenerative model for NTNs benefits from the OpenRAN architecture, where elements of the radio network can be disaggregated, with some able to be hosted on the satellite and some on the ground stations. This means it will open up satellite infrastructure to OpenRAN vendors – companies that are providing much more software-centric and interoperable products. This means satellites may benefit from telecoms innovation offered beyond the traditional telecoms vendors.

Both of these 3GPP models also enable satellite infrastructure to converge with terrestrial networks. We’ve recently seen T-Mobile in the US announce a partnership with SpaceX, to provide connectivity to T-Mobile users where service is lacking. This kind of integration will become straightforward and more commonplace when NTNs conform with the same set of 3GPP standards as terrestrial telecom providers.

If NTNs are to produce universal, high-performance coverage, they will have to be composed of a large number of satellites and beams, each of which must be coordinated to provide seamless coverage and interoperation with existing 5G terrestrial networks. The development and deployment of these networks is complex and time-consuming, requiring extensive satellite system engineering and 5G network modeling expertise.

By using 3GPP standards, network design can be based on established blueprints that enable collaboration between network operators and equipment vendors. SES and Intelsat have extensive experience in creating top-tier satellite services and could utilize this approach to create a dominant force within the industry, offering GEO and LEO satellites to cater to various use cases. However, if they fail to act swiftly, it is likely that other companies in the sector will take advantage of this opportunity and the space race could be over before it has truly begun.

This article was originally posted on The Fast Mode – Intelsat and SES Merger – What it could mean for the NTN market.

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