Today, more and more companies are investing significantly in developing and deploying satellite constellations to enable communication services globally. Satellite technologies also play an important role in delivering high-speed Internet access anywhere on Earth. Currently, there are more than 2,500 active satellites orbiting the planet, which could soon soar as a growing number of low-Earth-orbit (LEO) satellites continue to take the skies. Big industry players such as the Elon Musk-owned Space X and Amazon have recently announced plans to invest billions of dollars to launch LEO satellites.
Connectivity is a key factor for any nation’s economic development. LEO satellites, which operate 500 to 2,000 kilometres above the Earth’s surface, offer faster communications as it has lower latencies as compared to traditional satellites. This means that they can be leveraged for enabling applications that rely on low latency such as high-definition video conferencing; enhancing Internet quality; and ensuring seamless remote access to services such as online banking, e-learning, and government services.
To further explore the benefits and regional opportunities brought by the burgeoning LEO satellite market, ITP.net caught up with Boston Consulting Group (BCG)’s managing director and partner, Thibault Werle.
Can you please give a brief overview of the LEO satellite market? What are the key aspects driving its growth?
By 2030, BCG estimates that the Middle East Low Earth Orbit (LEO) satellite market will be valued at approximately $110 million, which is a conservative projection given that the global satellite communication (SATCOM) market is expected to reach $40 billion by 2030, and LEO is expected to contribute to $16 billion to this market.
The main purpose of LEO satellite operators such as OneWeb and Starlink is to provide non-terrestrial data services but with higher speed and lower latency than traditional satellite communications. In the Middle East, there is a growing demand for such services from consumers, driven mainly by people living in remote areas that don’t have access to terrestrial communication like 4G or fibre. There’s also a huge requirement coming from businesses to connect remote facilities, oil rigs and likes as well as government organisations for defence and security purposes.
Because of all these applications, we believe that the market will grow strongly once the first players start commercial operations. Beyond its market size, the overall economic value that this technology can unlock is far greater: LEO technology is part of a broad and dynamic ecosystem that encompasses Earth Observation (EO) and Positioning, Navigation, and Timing (PNT) beyond the core SATCOM usage.
What role do LEO satellites play in the digital era?
The COVID-19 pandemic has forced the world to embrace digital transformation at an accelerated pace. However, the pandemic has also highlighted that billions of people remain without internet access, which is a universal right.
Geographic accessibility and the high cost of building physical infrastructure such as the laying of fibere optic cables are two key barriers in providing ubiquitous broadband internet access. LEO satellites can address these challenges by providing global coverage and low latency broadband connectivity. Moreover, connecting to LEO satellites does not require large on-premise ground infrastructure – a portable end-user terminal that can be self-assembled is sufficient to gain access to the internet.
Here in the region, in what way can LEO technology accelerate ambitious national plans such as the Abu Dhabi Economic Vision 2030 and Saudi Vision 2030?
The region can leverage LEO technology for commercial and government use cases that contribute to the successful delivery of national transformation programs, such as Saudi Arabia’s Vision 2030 or Abu Dhabi Economic Vision 2030. Primarily focused on economic diversification and socio-economic development, these programs typically include three elements – technology, transportation, and connectivity – that could directly benefit from LEO technology. For example, LEO satellites can be critical enablers for logistics (live shipment tracking), mobility (redundancy for autonomous vehicles), and other transportation initiatives in the region.
Which sectors will LEO technology transform the most and how?
In terms of technology, LEO can promote business digitalisation and Internet of Things (IoT) adoption, for example in the oil and gas sector. By providing high-quality connectivity to remote oil fields (offshore and onshore), LEO technology can enable oil companies to enhance their digital capabilities, machine learning, and security initiatives at remote sites.
Governments have set ambitions to develop aerial, maritime, and inland transport infrastructure around these cities to develop logistics hubs as well as encourage tourism. LEO technology can help national carriers capitalise on the planned increase in passenger traffic by offering high-quality in-flight connectivity. LEO connectivity services also represent a sizeable opportunity for the maritime market given the high density and scale of maritime traffic passing through the region.
Similarly, the transportation sector is proving to be a key enabler for economic and social activity, driven by the emergence of mega-city development projects such as NEOM. Future developments of LEO technology are also expected to play a role in inland transport by enabling autonomous vehicles.
How should players in the LEO satellite market innovate to address challenges around environmental sustainability?
Because they are expecting to multiply by more than 10x the number of satellites in orbit above the earth, LEO operators will need to significantly invest in R&D and innovation around launch, satellite manufacturing, and space debris management.
On the other hand, the data that LEO satellites will capture can help us better understand climate change and identify ways to mitigate it. With a very dense coverage above the earth’s surface, oceans, and the atmosphere in a timely, regular and accurate manner, LEO satellites will be instrumental in dynamically measuring progress towards environmental sustainability. Data collected by satellites in Low-Earth Orbit (LEO) is crucial in sustainability use cases such as Earth Observation (EO) – a method to monitor, observe and measure biological, chemical, and physical parameters. Remotely sensed data produced by EO satellites is relevant to climate change, agriculture, disaster management, weather forecasting, and so on.
