People around the world have seen remarkable growth in their use and reliance on Internet services over the past decade. Dependence on internet services has accentuated an increased demand for connectivity accessibility in rural and urban populations around the world, which has been exacerbated by the COVID-19 outbreak. As a result, terrestrial Internet Service Providers (ISPs) are expanding their networks and implementing new technologies such as fiber optic cables to deliver better coverage and faster speeds to more locations. Terrestrial broadband, on the other hand, has geographical constraints and people living in rural areas cannot easily access it. In fact, 27.6 million households (22.5% of total households with an average of 2.5 people per household) in the United States have no home Internet, and 35% of rural residents in United States still does not have access in April 2021. . To cater to this large market of customers, satellite ISPs are building constellations that will provide near-global coverage. It remains to be seen if these remote markets are robust enough to support satellite ISPs and if satellite speeds will ever be fast enough to compete with terrestrial ISPs.
GEO versus LEO
Traditionally, satellite ISPs, such as Viasat and HughesNet, have used large satellites placed in geostationary orbit (GEO) where only a few satellites are needed to provide services with near-global coverage. However, the latency and speeds these satellites can provide are relatively low given their distance from the Earth’s surface (~22,300 miles). Recently however, companies such as SpaceX have been developing and deploying large constellations in Low Earth Orbit (LEO) to deliver internet services via satellite. In LEO, the satellites are much closer to the surface (
Satellite vs Terrestrial
For areas with the necessary infrastructure (i.e. major cities), terrestrial broadband is the preferred choice given the fast speeds, low latency, affordability, and reliability that ‘he offers. Satellite ISPs are upgrading their services to compete with terrestrial broadband companies such as Xfinity, AT&T, Verizon, Google, and Spectrum, but as of 2022 there is a significant gap in the highest internet speeds they offer (Figure 1.1). To compare, among the five largest terrestrial ISPs, the lowest maximum speed offered is 940 Mbps while the highest maximum speed among satellite ISPs is 500 Mbps (Starlink Business plan). At the high end, terrestrial ISPs even offer up to 5000 Mbps (AT&T), which is 10 times the maximum speed offered by all satellite ISPs. There is some cost overlap when looking at monthly plans (Figure 1.2), but when costs are normalized against speed, terrestrial ISPs show much better costs for the speeds they offer (Figure 1.2). 1.3). On top of that, the fastest satellite internet via Starlink comes with a hefty $2500 one-time equipment fee. This makes satellite ISPs uncompetitive in terms of cost, speed, and latency in developed areas with the infrastructure to support terrestrial Internet services.
Summary of news:
- Commercial potential of satellite Internet
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