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Eutelsat, EchoStar, Telesat, Viasat on GEO-orbit's value in a multi-LEO-constellation world - one says it's zero

Eutelsat, EchoStar, Telesat, Viasat on GEO-orbit's value in a multi-LEO-constellation world - one says it's zero
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Eutelsat, Telesat, EchoStar and Viasat on whether multi-orbit makes sense if multiple LEO constellations are in operation. Credit: WSBW video

PARIS — Satellite fleet operators Eutelsat, EchoStar, Telesat and Viasat addressed how to make the best use of their current geostationary-orbit satellites and disagreed over whether these assets’ value is in terminal decline in a LEO-dominated world.

All agreed that consumer broadband will be taken over by LEO constellations, notably SpaceX Starlink and the future Amazon Project Kuiper, and by regulatory policies that favor terrestrial broadband and the advance of fixed wireless service.

Where they differed was whether GEO satellites would be an indispensable piece of a data service given the inevitable congestion of LEO infrastructure in certain areas.

Jean-Francois Fallacher. Credit: WSBW video

Eutelsat Chief Executive Jean-François Fallacher, whose company’s revenue remains 85% GEO-satellite based, said Eutelsat’s fleet of GEO satellites are capable of providing connectivity services beyond direct-to-home television, which is a declining business.

“We could do much more for the content industry,” Fallacher said here Sept. 15 during World Space Business Week (WSBW), organized by Novaspace. “We need to be more creative ways to distribute content and help the video industry adapt to the new world.”

Eutelsat’s OneWeb constellation of broadband satellites generated 187 million euros ($220 million) of revenue in the 12 months ending June 30, up 84% from the previous year. The company forecasts it will rise by 50% in the coming fiscal year, to 280 million euros, which is expected to be 22.5% of Eutelsat’s revenue.

Fallacher said OneWeb’s revenue ramp is occurring later than expected because its ground gateway Earth stations were late in being installed.

“We sometimes forget that building the ground network is critical to providing services,” Fallacher said. “So we are very happy that after 7 billion [euros] being invested in the past 10 years, we are now present all over the globe and capable of delivering services.”

OneWeb’s focus is aeronautical, maritime and land-mobile connectivity. Government is also a growing segment. The French Defense Ministry in June announced a contract with OneWeb valued at 1 billion euros over 10 years. The contract includes “hardening some of the services that we can provide on the constellation for more sovereign and government use.”

Fallacher said Eutelsat is working with EchoStar Corp.’s Hughes Network Systems, a OneWeb investor and provider of much of its ground segment, “to harden [OneWeb] for more governmental use.”

Paul Gaske. Credit: WSBW video

Paul Gaske, EchoStar’s chief commercial officer, said Hughes would continue its consumer broadband business despite the challenging environment, but does not believe it will grow much.

“They eat a lot of capacity for the amount of capital you invest,” Gasket said of the consumer business. “We don’t see it growing. There are competitive pressures from LEO, regulatory pressures from subsidies rolling out, and economic pressure from cellular operators that can offer fixed wireless near their towers.”

EchoStar/Hughes is investing in its Fusion service, which combines terrestrial wireless, OneWeb LEO and the company’s GEO satellites to offer customers a resilient package.

The EchoStar 21 satellite was launched in June 2017 and now provides S-band mobile service with Ka-band feeder links in Europe through The EchoStar Mobile company based in Dublin. EchoStar’s sale of its S-band spectrum rights to SpaceX means that EchoStar 21 will likely be off the market before the SpaceX-EchoStar transaction closes, expected by mid-2027. That’s also when EchoStar Mobile’s operating license expires. Credit: Maxar

EchoStar’s recent $17-billion sale of its S-band spectrum to SpaceX means the EchoStar Mobile business in Europe likely has no more than two years left, when the SpaceX transaction is predicted to close.

What will happen to the large GEO-orbit S-band EchoStar 21 satellite over Europe? The service’s operating license with the European Commission expires in 2027 and EchoStar will not be bidding to renew it.

“As far as the satellite assets, that’s yet to be determined,” Gaske said. “We are hoping to maintain the service with the customers we have for the time being, but I think it’s unknown.”

Daniel S. Goldberg. Credit: WSBW video

Telesat has made clear in recent months that it’s unlikely to order another GEO-orbit DTH satellite because it cannot close a business case to justify it.

Telesat Chief Executive Daniel S. Goldberg said the company’s three major DTH customers, Bell Canada, Rogers and EchoStar’s Dish Network, will be able to renew leases for short time periods because Telesat’s current satellites are expected to remain fully operational for several more years. Beyond that?

“While there are GEO satellites in orbit, they are going to be leveraged in connection with LEO,” Goldberg said, referring to Telesat’s Lightspeed broadband constellation, expected to enter service in 2027.

“They are up there and depreciating and can provide a nice complement to [LEO] for resilience and where LEO capacity is not available. They can also provide a regulatory complement, where GEO has market access and the LEO does not.

“But over time, there will be more and more non-GEO assets in orbit, so there will be an enormous amount of resiliency just at LEO. The use case then for multi-orbit will be very narrow, probably a government user willing to pay for that kind of resiliency.”

Mark Dankberg. Credit: WSBW video

Viasat Chief Executive Mark Dankberg said that while consumer broadband is “the highest-volume, lowest-yield” use of spectrum, the company expects to retain its current subscriber base of several hundred thousand, and even to grow it.

Viasat leases LEO capacity from OneWeb to offer low-latency to complement Viasat’s GEO fleet.

“We have a pretty good idea of what the market cost is for LEO,” Dankberg said. “Our customers would not be able to perform the missions they want with the cost of LEO bandwidth. Can we make GEO bandwidth available at materially lower cost? The answer is yes.”

Three cruise ships in an Alaskan port, and insufficient LEO bandwidth for a phone call

Dankberg gave an example of a recent summer cruise to Alaska to illustrate the limits of LEO.

“There were five cruise ships in the port, shoulder to shoulder. I couldn’t even do a phone call on it, that’s how congested the LEO network was. One reason: The regulator at the time did not want to give all the spectrum to just one provider.”

Dankberg has long argued that GEO satellites will be better than LEO at serving areas of high-density demand, such as around airports and seaports. LEO will be used for latency-sensitive services, while GEO will be used for high-density cases with lower-cost airtime.

Like EchoStar, Viasat also operates an S-band satellite over Europe. It is used to fill in capacity for the company’s European Aviation Network, which is principally an air-to-ground business providing in-flight connectivity to short-haul intra-European flights.

Dankberg said Viasat had every intention of bidding to keep its license, which expires in 2027.

“There is a public-service component to the way the spectrum was allocated,” Dankberg said. “We do use it pretty significantly for air-to-ground and space-to-ground. We have plans to improve that service. We’ve made filings with the European Union on why we think we are a good steward of the public interest for that spectrum in those markets. We’ll find out if we have made a strong case.”