[Starlink] Fwd: Here is the first edition of the report: Will LEO Satellite Direct-to-Cellular Networks Make Traditional Mobile Networks Obsolete?

Wed Jan 29 07:29:45 EST 2025

---------- Forwarded message ---------
From: John Strand <js at strandconsult.dk>
Date: Wed, Jan 29, 2025, 4:23 AM
Subject: Here is the first edition of the report: Will LEO Satellite
Direct-to-Cellular Networks Make Traditional Mobile Networks Obsolete?
To: <info at strandconsult.dk>

Dear Colleague,

Here is the first edition of the report: *“Will LEO Satellite
Direct-to-Cellular Networks Make Traditional Mobile Networks Obsolete?”*
The report is a part of a signature series in Strand Consult´s Global
Project for Business Models for Broadband Cost Recovery
<https://strandconsult.dk/category/fair-cost-recovery/>.

This new report offers a comprehensive analysis of the role of Low-Earth
Orbit (LEO) satellites in the telecommunications industry. It examines the
advancements in satellite technology, the challenges in achieving service
parity with terrestrial networks, and the implications for global
connectivity. It explores the technical, economic, and regulatory factors
shaping the deployment of Direct-to-Cell satellite services and evaluates
whether these networks can complement or replace traditional cellular
infrastructure.

This report aims to illuminate the forces driving developments in LEO
satellite networks, the challenges they face, and how these technologies
will likely shape the telecommunications industry's future. It aims to
provide inspiration and insights that can be used to frame discussions
about the trends and transformations affecting connectivity on a global
scale.

When reading recent media and comments on various media postings, one can
quickly get the impression that satellites will replace traditional mobile
networks. This narrative often simplifies a complex issue, creating the
perception that satellite technology is a universal solution to global
connectivity challenges. However, a more pragmatic view reveals that
satellite networks like those operated by Starlink offer revolutionary
opportunities but are unlikely to make terrestrial mobile networks
obsolete. Instead, these technologies will coexist, each serving distinct
roles in the communication ecosystem.

There are many mobile telecom operators which fear that low earth orbit
(LEO) satellite networks like Starlink and others could impact their
business in a negative way like over the top (OTT) providers. Indeed, there
is a concern about traffic and revenue moving away from mobile networks to
providers which do not have the same regulatory obligations or cost
structure. For example, in some countries, some LEO satellite providers do
not pay for the use of radio spectrum. These are important issues to
examine in their short, medium and long term impacts.

Strand Consult’s global project for Broadband Cost Recovery and Business
Models <https://strandconsult.dk/category/fair-cost-recovery/> examines the
challenges for mobile telecom operators to build and run networks and the
set of solutions to improve return on investment.  A key region impacted by
LEO satellites is the Caribbean. Strand Consult’s report *“Gigabit
Caribbean: Closing the Investment Gap in Fixed and Mobile Networks”
<https://strandconsult.dk/gigabit-caribbean-closing-the-investment-gap-in-fixed-and-mobile-networks/>
*describes the inherent challenge to deliver return on investment in remote
areas with limited population and in the face of growing traffic from
outside providers which contribute zero financially to the local economy.
LEO satellites may be a double-edged sword in that they may provide
connectivity in an emergency, but they do not conform to local regulatory
requirements, nor do they participate locally financially.  The issue is
also relevant for rural broadband providers in the USA which Strand Consult
documented in its report “Broadband Cost Recovery: A Study of Business
Models for 50 Broadband Providers In 24 US States.”
<https://strandconsult.dk/broadband-cost-recovery-a-study-of-50-broadband-providers-in-24-us-states-new-report-from-strand-consult/>

*The Satellite Race to Reach the Phone.*

Among the various players in the Low-Earth Orbit (LEO) satellite market,
Starlink <https://docs.fcc.gov/public/attachments/DA-24-1193A1.pdf>, led by
Elon Musk’s SpaceX, has emerged as the frontrunner. With a network of
almost 7,000 satellites operating, 300+ (2nd generation or Gen2) satellites
have Direct-to-Cell capabilities
<https://www.theverge.com/2024/11/27/24307394/starlink-spacex-tmobile-direct-to-cell-satellite-fcc-approval?>.
SpaceX's spectrum regulatory approach outside the U.S. has been criticized
for not always adhering to local licensing frameworks (e.g., cases in
India, France, and South Africa). Its reliance on spectrum that local
regulators have not officially granted can create tensions with governments
and local telecom providers. Starlink operates a global satellite network
with thousands of satellites covering areas without always having lawful
access to the spectrum on which it provides services.

This is an even more significant challenge regarding the regular cellular
spectrum used for traditional mobile cellular services licensed and used by
local telecommunication companies. Thus, it requires, at least, the
satellite operator to collaborate locally with telco operators who have the
usage rights of the cellular spectrum of interest. Despite these
challenges, Starlink’s aggressive strategy and innovative technology have
placed it light years ahead of competitors like Amazon’s Kuiper
<https://docs.fcc.gov/public/attachments/DA-23-114A1.pdf> and Eutelsat’s
OneWeb <https://oneweb.net/>. As of January 2025, Amazon's Project Kuiper
has not yet launched
<https://techxplore.com/news/2024-07-amazon-kuiper-delays-satellite-timeline.html>
any operational satellites, including those with Direct-to-Cell (D2C)
capabilities. The project is still in development, with plans to deploy a
constellation of 3,236 LEO satellites to provide global broadband coverage.

One of the most remarkable aspects of Starlink’s success is its ability to
build a functional global network without initial access to the necessary
spectrum. This bold approach has drawn comparisons to Jeff Bezos’ Kuiper
project, with Strand Consult humorously observing that while Bezos is still
setting up a “burger bar,” Musk is already running an “interstellar
McDonald’s.

In the report you can read about the companies that are advancing D2C
connectivity through LEO satellite constellations, aiming to connect
standard mobile devices directly to satellites.

Among them, AST SpaceMobile
<https://docs.fcc.gov/public/attachments/DA-24-756A1.pdf> has launched five
operational satellites, detailed in FCC filings, to deliver 4G and 5G
services globally, with plans to expand its network with up to 243
satellites. AST SpaceMobile's advanced phased-array antenna, BlueWalker 3
<https://ast-science.com/spacemobile-network/bluewalker-3/>, is one of the
most powerful in the industry required to deliver good quality services to
unmodified cellular consumer devices. Similarly, Lynk Global
<https://docs.fcc.gov/public/attachments/DA-22-969A1.pdf> has deployed
satellites to provide coverage in remote areas, emphasizing partnerships
with telecom operators and regulatory approvals.

Geespace <https://www.geespace.com/>, part of Geely Technology Group, has
launched 30 satellites in China and plans to expand to 72 by 2025,
targeting global broadband and D2C capabilities. The Qianfan ("Thousand
Sails") constellation
<https://www.reuters.com/technology/space/china-launches-first-satellites-constellation-rival-starlink-newspaper-reports-2024-08-05/>,
in intent and capabilities closest to SpaceX, is another Chinese initiative
that has deployed 54 satellites and aims for over 15,000 by 2030,
positioning itself as a major player in satellite-based communications. US
and Chinese initiatives drive significant advancements in D2C technology,
integrating satellite connectivity into everyday communications and
addressing global coverage challenges.

*Some Takeaways.*

Direct-to-Cell LEO satellite networks face considerable technology hurdles
in providing services comparable to terrestrial cellular networks.

   - *They must overcome substantial free-space path loss* and ensure
   uplink connectivity from low-power mobile devices with omnidirectional
   antennas.
   - Cellular devices transmit at low power (typically 23–30 dBm), making
   it *very challenging for uplink cellular signals* to reach satellites in
   LEO at 300–1,200 km altitudes, particularly if the cellular device is
   indoor.
   - Uplink signals from multiple devices within a satellite beam area can
   overlap, creating *interference that challenges the satellite’s ability
   to separate and process individual uplink signals*.
   - *Must address bandwidth limitations* and efficiently reuse spectrum
   while minimizing interference with terrestrial and other satellite networks.
   - Scaling globally may *require satellites to carry varied payload
   configurations to accommodate regional spectrum requirements*,
   increasing technical complexity and deployment expenses.
   - Operating on terrestrial frequencies *necessitates dynamic spectrum
   sharing and interference mitigation strategies*, especially in densely
   populated areas, limiting coverage efficiency and capacity.
   -

On the regulatory front, integrating D2C satellite services into existing
mobile ecosystems is complex. Spectrum licensing is a key issue, as
satellite operators must either share frequencies already allocated to
terrestrial mobile operators or secure dedicated satellite spectrum.

   - *Securing access to shared or dedicated spectrum*, particularly
   negotiating with terrestrial operators to use licensed frequencies.
   - *Avoiding interference* between satellite and terrestrial networks
   requires detailed agreements and advanced spectrum management techniques.
   - *Navigating fragmented regulatory frameworks* in Europe, where
   national licensing requirements vary significantly.
   - The high administrative and operational *burden of scaling
globally* diminishes
   economic benefits, particularly in regions where terrestrial networks
   already dominate.

The idea of D2C-capable satellite networks making terrestrial cellular
networks obsolete is ambitious but fraught with practical limitations.
While LEO satellites offer unparalleled reach in remote and underserved
areas, they struggle to match terrestrial networks’ capacity, reliability,
and low latency in urban and suburban environments. The high density of
base stations in terrestrial networks enables them to handle far greater
traffic volumes, especially for data-intensive applications.

The regulatory and operational constraints surrounding using terrestrial
mobile frequencies for D2C services severely limit scalability. This
fragmentation makes it difficult to achieve global coverage seamlessly and
increases operational and economic inefficiencies. While D2C services hold
promise for addressing connectivity gaps in remote areas, their ability to
scale as a comprehensive alternative to terrestrial networks is hampered by
these challenges. Unless global regulatory harmonization or innovative
technical solutions emerge, D2C networks will likely remain a
complementary, sub-scale solution rather than a standalone replacement for
terrestrial mobile networks.

The report *"Will LEO Satellite Direct-to-Cellular Networks Make
Traditional Mobile Networks Obsolete?"*  is valuable for mobile operators
and their shareholders, policymakers, security and defense analysts,
network engineers, and other professionals.

Let me know your feedback and questions.

Best regards,

John Strand

Strand Consult is an independent, privately owned consultancy company. Our
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