The world is more connected than ever, but significant gaps still remain for some consumers—especially those in rural and remote areas.
Satellite broadband, which has grown into a full-fledged industry led by SpaceX’s Starlink, is seeking to fill the spaces that terrestrial, cable, and fiber-based methods currently do not reach.
The rise of the satellite-broadband industry has led many incumbents, like AT&T and Verizon, to adapt their business strategies to collaborate with the new players.
“It’s impossible to cover every square inch of America with any single technology, but we believe we can come really, really close with a combination of terrestrial networks and direct-to-cell satellite networks,” Chris Sambar, president of network at AT&T, said in a December 2022 video about its partnership with satellite provider AST SpaceMobile.
While about 90% of American households had internet services as of December 2022, per Leichtman Research Group, tens of millions of Americans are estimated to still lack broadband access, particularly in rural areas. There could be a significant opportunity in plugging these connectivity gaps: In 2031, North Sky Research predicts the cumulative revenues for the VSAT and satellite-broadband markets will total more than $135 billion.
AST SpaceMobile is expecting to launch its first commercial satellites later this year and ”offer intermittent broadband services in 2024,” Scott Wisniewski, chief strategy officer at AST SpaceMobile, said in a statement to CNET.
For its part, Verizon announced its partnership with Amazon’s Project Kuiper in November 2021, centered around providing remote areas with connectivity and serving as a “backhaul solution” aimed at connecting “core” networks to subnetworks.
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“There are many things satellite cannot do and many things we cannot do. It’s very, very complimentary, and that’s why we wanted to lean into this both ways, both for the enterprise and for the consumer,” Sowmyanarayan Sampath, CEO of Verizon Business, told Emerging Tech Brew at the time.
Sampath said Verizon and Project Kuiper’s partnership stemmed from the relationship they built around AWS in 2019, where Verizon piloted the AWS Wavelength cloud platform on its 5G Edge computing platform.
These days, legacy broadband providers are likely less worried about potential challenges from satellites than fixed wireless connections, but experts told us that fixed wireless likely has a smaller total addressable market than traditional, terrestrial broadband.
For their part, the biggest potential threat to the satellite-broadband market could be legacy broadband providers installing and building fiber in new areas, where fiber would be able to provide more reliable and faster connections than satellites, at least for now.
Mark Dankberg, CEO of Viasat said on a February 2022 earnings call that cable-network expansion and new fiber-network builds ”are probably more of a factor,” than fixed wireless build-outs.
“I think [satellite broadband] is a fill-in-the-gap, fairly niche use case. I think there’s economic issues when you scale, and you have too many users hitting those satellites. You can’t provide the bandwidth that you need to provide,” Sambar told Emerging Tech Brew. “If you have a terrestrial solution, meaning cable, preferably fiber, or a wireless solution, from a cell tower on Earth, that’s going to be a preferred solution.”