While satellite services from companies like Elon Musk’s Starlink and the EU’s IRIS² may all provide internet connectivity from space, equating them is akin to comparing fast-fashion chains with vintage clothing stores and luxury boutiques.
The emergence of mega-constellations, consisting of hundreds or even thousands of satellites, represents a significant advancement in global connectivity, particularly in remote areas where traditional internet services are lacking. This growing prominence is underscored by the ongoing conflict in Ukraine, highlighting the geopolitical importance of space-based communication systems, reports 24brussels.
Despite the potential, satellites often do not operate at full capacity since a large portion of the global population resides in densely populated regions, leaving vast areas unserved. This underutilization complicates the business case for space-based internet, primarily due to the high operational costs compared to revenue, albeit mitigated through targeted services and enterprise contracts aimed at high-demand rural regions.
The landscape is diverse, with several key players, primarily from Europe and the U.S., shaping the future of satellite internet.
Starlink and Kuiper: The Fast-Fashion Chains
Both Starlink and Kuiper epitomize the fast-fashion model in satellite internet. Starlink operates with over 8,000 satellites in its constellation, while Kuiper has deployed slightly more than 100 satellites thus far.
These budget satellite systems have a lifespan of five to seven years before reentry into Earth’s atmosphere necessitates new launches – a costly requirement for maintaining their networks. Starlink manages expenses through SpaceX’s integrated approach, designing and launching its satellites using its own reusable Falcon 9 rockets. Conversely, Kuiper, a subsidiary of Amazon, is developing its satellites to enhance broadband access necessary for its business growth.
While Kuiper depends on third-party launch services, notably from SpaceX and Arianespace, the prospect of price drops in launch costs looms large if Blue Origin, Jeff Bezos’ company, achieves reusability with its New Glenn rocket.
According to Antoine Lebourgeois, an analyst at Stifel, Starlink and Kuiper are likely to evolve into a near duopoly thanks to their scale and advantages. However, concerns linger regarding the long-term economic sustainability of both ventures. Pierre Lionnet from ASD-Eurospace warns about the sustainability of Starlink’s growth model, highlighting fixed launch costs that undermine continuous satellite addition. As for Kuiper, its reliance on external rocket providers raises doubts about its ability to offer competitive pricing without significant losses.
Both companies appear committed to securing market share at all costs, but the environmental implications of maintaining such substantial satellite constellations cannot be overlooked, resulting in a notable carbon footprint.
Eutelsat, SES, Viasat: The Vintage Shops
Legacy operators like SES from Luxembourg, Eutelsat of France-UK, and U.S.-based Viasat are adapting to comprise mainly internet services, responding to declining revenues in traditional broadcasting from geostationary satellites. Their focus shifts toward niche sectors such as aviation, maritime, and governmental markets.
Compared to their U.S. rivals operating low-Earth orbit constellations, SES, Eutelsat, and Viasat face challenges due to their higher latency and reduced speeds. Only Eutelsat, through its OneWeb partnership, maintains a low-Earth orbit capacity with a fleet of 600 satellites; however, it lacks the operational economies found in American solutions since its satellites and terminals are sourced from external manufacturers.
Despite heftier operational costs and less portable terminals, OneWeb is viewed as a feasible alternative to Starlink for military communications in Ukraine, as apprehensions grow over Musk’s political engagement. However, its lack of competitive speeds renders it less practical for civilian use, especially where infrastructure has been compromised.
As the legacy trio navigate their transition toward a digital landscape, they seek to redefine their roles, potentially rejuvenating their offerings to meet current consumer needs.
IRIS²: The Luxury Boutique
The EU’s IRIS² project symbolizes an advanced framework for secure satellite communications, akin to the U.S.’ military-focused satellite architecture.
With an operational target set for 2030 and a fleet of 290 satellites planned, IRIS² aims to deliver secure communications for EU governments and armed forces, embodying a “luxury” approach with cutting-edge technology.
As is common with EU initiatives, the scope of IRIS² has broadened to include connectivity for underserved communities and allowances for commercialization via private partnerships.
The EU also welcomes partners beyond its borders, with Iceland and Norway likely to join soon and a willingness expressed for the UK and Ukraine’s involvement. This trend is indicative of the project becoming more inclusive than a mere EU endeavor.
IRIS² prioritizes governmental communication security, featuring advanced technologies such as post-quantum encryption, and a multi-orbit strategy aimed at reducing collision risks while enhancing operational resilience.
Developed through a consortium comprising Europe’s established satellite entities, including Eutelsat, SES, and Spain’s Hispasat, IRIS² underscores a collaborative European initiative designated towards affordability and economic viability.
“This European constellation allows smaller European operators to rely on a shared infrastructure, pool resources, and achieve economies of scale,” said Lebourgeois. “In my view, it’s the only viable way to compete against giants like SpaceX and Amazon.”
However, the projected €10.6 billion expenditure for the EU’s ambitious satellite infrastructure asserts that investment in sovereign capabilities for secure communication within Europe remains a pressing necessity amidst rising geopolitical tensions.
