ICTworks

Satellite communication plays a necessary role in the global connectivity ecosystem, connecting rural and remote populations, providing backhaul connectivity to mobile cellular networks, and rapidly establishing communication in emergency and disaster response scenarios.

Digital Connectivity and Low Earth Orbit Satellite Constellations: Opportunities for Asia and the Pacific by the Asian Development Bank focuses on low Earth orbit (LEO) satellites, which have been in deployment for decades and are again a subject of intensive investment as new large constellations are in early stages of deployment.

These new LEO constellations, such as those being deployed by Starlink by SpaceX, Project Kuiper by Amazon, OneWeb, Lightspeed by Telesat, among others, may prove to be transformational to the connectivity landscape based on their global coverage and their suitability for areas not served by fiber optic cable networks.

Asia Pacific LEO Opportunities

ADB’s developing member countries are well placed to leverage and benefit from this expansion of internet connectivity, particularly for underserved geographies and countries with limited international internet bandwidth, such as landlocked developing countries and small island developing states.

With their global reach and coverage, LEO constellations are expected to dramatically expand the availability of high-speed broadband internet access with levels of service that rival fiber optic cables in terms of speed and latency, and at significantly reduced price levels compared to traditional geostationary satellites.

A proactive engagement with LEO solutions is likely to yield benefits as the relevant business models are still evolving. Well-informed early action by regulators and investors can ensure that developing member countries prepare for opportunities presented by the anticipated expansion of connectivity bandwidth.

Six LEO Recommendations

As the new LEO constellations begin offering commercial service in 2021, actions can be taken today to ensure that low- and middle-income countries are well positioned to take advantage of potential cost-savings and increased coverage. These include:

1. Ensure flexible and streamlined licenses procedures

Licensing regimes of internet service providers differ widely between countries. Good practice licensing policy includes simple registration with administrative bodies, rather than complex and onerous procedures that require legislative approvals. Regimes that require congressionally awarded franchise licenses, for example, create a significant barrier to entry and allow for rent seeking by firms that are able to navigate the cumbersome processes.

2. Do not require domestic ground station traffic routing

National requirements, which stipulate that satellite transponder data traffic must transit through a domestic ground station (rather than be allowed to transmit from a ground station located in another country), create burdensome infrastructure deployment requirements. LEO constellation firms may decide that these represent too large a cost for markets with small potential revenue opportunities.

It is common for internet traffic to be transmitted via satellite transponders that originate in a country where the satellite’s ground station is located, particularly for smaller markets whereby providers need to aggregate total traffic being transmitted to achieve economies of scale.

3. Reduce import tariffs on satellite user terminals

Hardware, software, and licensing costs for user terminals (consumer equipment, including satellite antennas, modems, and Wi-Fi access points) contribute to the total cost of satellite internet service, and user terminals are already priced significantly above other broadband internet service hardware such as cable modems or stand-alone Wi-Fi access points.

Reducing the production cost of user satellite terminals requires mass manufacturing and economies of scale; the benefits of which can best be passed to consumers if trade barriers do not further increase the cost of devices.

4. Engage in regional cooperation and regulatory convergence

The expansion of satellite coverage and increase in available capacity will particularly benefit countries that have limited international internet bandwidth being supplied by undersea and terrestrial fiber optic cables, such as small island developing states and landlocked developing countries.

Regional integration between countries and their neighbors could accelerate deployment timelines by easing the more cumbersome regulatory issues and forging convergence of licensing issues. Similarly, aggregation of demand between markets could present more attractive deployment timeline prioritization and may also generate bargaining power for favorable terms of service.

5. Use universal access funding to support public WiFi access

Individual subscriptions to LEO service may still be commercially priced at levels beyond the affordability thresholds for low- and middle-income consumers in developing countries. However, public access could be subsidized by national and local governments partially or in full, either one-time or recurring, for the initial hardware and/or trial service, or to provide free public Wi-Fi.

A number of countries in Asia and the Pacific fund public access by subsidizing free Wi-Fi services, of which LEO could provide connectivity in remote areas. Public access services via satellite could support connectivity to unconnected and under-connected government offices, schools, hospitals, and other public facilities. Public–private partnerships may be helpful in this regard, both in terms of consumer access as well as upstream infrastructure development (such as ground stations).

6. Invest in accurate mobile coverage availability maps

Comprehensive, up-to-date, and publicly available (open data) mapping of network infrastructure (mobile cellular base stations, fiber optic cable routes, microwave backhaul lines, points of presence, internet exchange points, and others) as well as network service coverage areas will better inform public and private decisions on where to allocate resources and investment to expand service availability. For example, this ITU tool for regional and national planning.

By John Garrity and Arndt Husar