Cellular's satellite backhaul options abound with no clear winner

Wireless network engineers who are looking for more ways to keep their cell sites connected need only to cast their eyes skyward.

There, in space, is a growing range of options for cell site satellite backhaul. SpaceX's Starlink, Eutelsat OneWeb, Amazon's Project Kuiper, Telesat's Lightspeed and Rivada Space Networks are some of the new names joining existing players like Viasat and EchoStar.

However, analysts generally agree that there aren't going to be many cell sites connected to satellites now or in the future, particularly in places like North America where fiber networks are widespread.

Further, the satellite services market is in nearly constant upheaval, with new connection options coming and going on an almost weekly basis. For example, just this month aerospace giant Boeing decided to scrap its plans to build a low-Earth orbit (LEO) satellite constellation. Rivada, meanwhile, has missed payments to its main satellite vendor Terran Orbital.

It's also unclear how the satellite backhaul market will develop in light of new technologies that promise to connect regular smartphones directly to satellites. It's possible that such technologies could undermine the need for additional cell sites in rural areas – the kind of sites that would make use of satellite backhaul.

"I know it is a very, very small share of cell sites that are backhauled with satellites," wrote Dell'Oro Group analyst Jimmy Yu in response to questions from Light Reading.

According to one estimate, the global satellite backhaul market will reach $3 billion by 2026, growing at a compound annual growth rate (CAGR) of 4.6%. Another estimate predicts revenues will grow at a 17.6% CAGR in the next 10 years and argues "there is still vast growth to be captured."

The old and the new

"Historically it [satellite backhaul] has not been cheap," said analyst Iain Gillott of iGR. Traditionally, satellite operators like Viasat and EchoStar have offered satellite backhaul options that provide relatively slow connections coupled with steep monthly service fees, he explained. As a result, most wireless network operators like AT&T and T-Mobile have looked to other backhaul technologies like fiber and microwave.

Satellite backhaul is "used in locations where fiber and point-to-point microwave is difficult to do," wrote Dell'Oro's Yu, adding that disaster recovery is another application for satellite. "For example, a small country that has one submarine cable connection," he explained. "If that submarine cable breaks, the only connection to the outside world is through satellite."

The problems surrounding satellite backhaul are exacerbated in the 5G era as speedy connections are paramount. The distance between traditional geosynchronous satellites and the Earth can introduce excessive latency, according to iGR's Gillott.

As a result, "ideally you want fiber to your cell site," he said.

But a new crop of players is promising something different. SpaceX's Starlink proved out the LEO satellite model by launching lots of small satellites in orbits much closer to Earth. That setup reduces latency and speeds up connections. 

But LEO constellations also create financial headaches for satellite operators that must launch hundreds of satellites into space.

Regardless, SpaceX currently counts around 5,000 satellites in orbit and is working on getting its second-generation satellites launched. Meanwhile, OneWeb now counts several hundred operational satellites, while Amazon has successfully tested a handful, according to reports.

And mobile network operators appear interested. Already Africa Mobile Networks (AMN) said it would use SpaceX's Starlink constellation "to connect AMN's mobile network base stations with high-speed, low-latency broadband services, to serve even in the most remote and rural communities around the world."

Verizon announced a similar deal with Amazon in 2021, while Eutelsat OneWeb said last month it "successfully connected to a 5G mobile network, supporting 5G QoS [quality of service] levels for the first time."

Steps forward and back

Canada's Telesat stands as a prime example of the opportunities – and challenges – in leveraging LEO technology for satellite backhaul. The company first announced its Lightspeed LEO plans in 2021, with hopes to launch services by 2023. But Michele Beck, Telesat's SVP of sales, told Light Reading that the COVID-19 pandemic and associated supply chain troubles squelched the company's ability to finance its plans for a 300-satellite LEO constellation.

However, Telesat this summer replaced its satellite supplier Thales Alenia Space with MDA and managed to rope in the financing necessary to launch around 200 LEO satellites starting in 2026. The delay helped Telesat obtain more powerful satellites that can supply connections up to 1 Gbit/s, according to Beck.

"We've designed our services around these capabilities," she explained, noting that Telesat plans to chase four main opportunities: the enterprise market, including satellite backhaul for cellular; government services; airline connections; and maritime operations.

"We're in discussions with many of the operators today" for satellite backhaul services, Beck said, without providing details. She suggested such connections could also be used for backup in case a primary cell site connection goes down.

"The operators love it" because it's robust and resilient, Beck said. "That's important to them."

Beck also said Telesat is developing connections compliant with MEF standards for fiber because "our customers are used to dealing with fiber networks."

But the company has no plans to pursue the direct to device (D2D) sector of the market – which involves connecting smartphones directly to satellites – because Telesat's Lightspeed satellites won't have suitable orbits and because the company's spectrum holdings aren't appropriate for that kind of application, Beck said.

Boldly going

Telesat isn't the only satellite company that has faced challenges, nor is it the only one hoping for success.

Indeed, SpaceX is already claiming success. "SpaceX Starlink has achieved breakeven cash flow! Excellent work by a great team," SpaceX billionaire owner Elon Musk posted on his social media site recently. "Starlink is also now a majority of all active satellites and will have launched a majority of all satellites cumulatively from Earth by next year."

Others continue to struggle. For example, satellite vendor Terran Orbital is still awaiting promised payments from satellite hopeful Rivada.

"We have not received expected further milestone payments and do not yet have a definitive schedule and when further may be received. As a result of this delay, we have removed the expected revenue contribution related to Rivada for our full year 2023 outlook," said CEO Marc Bell on the company's recent earnings call, according to Seeking Alpha. "We remain engaged with Rivada on a regular basis and have been reassured as recently as today by Rivada that we should expect to receive our contractual milestone payments this year."

SES, a longtime satellite operator, is also facing challenges. According to one new report, the company's latest batch of O3b satellites, called mPOWER, are all malfunctioning. But that didn't stop the US Defense Department from signing a five-year agreement, worth up to $270 million, with SES earlier this month.

According to Telesat's Beck, the struggles are worth it. She argued that a LEO satellite connection may end up being the cheapest in a rural area.

"This is a lower cost solution in many cases to building fiber," Beck said.