Gartner's Khurram Shahzad on satellite broadband
Leo satellite broadband has been popular with New Zealanders in remote areas since it first arrived four years ago. A year ago Download Weekly reported: ' New Zealand has the highest number of satellite connections per person in the OECD '.
Melbourne-based Gartner director analyst Khurram Shahzad says the technology will soon break out of its rural niche and become mainstream.
He says, 'Up until three years ago, there were only around 3000 satellites in the sky. But in the last three years we have reached around 11,000. At this pace, we are on track to exceed 40,000 satellites in the next three years. It means satellite communication will become more mainstream.'
Reusable rockets change the economics
One of the drivers is that, thanks to reusable rockets, the cost of satellite launches has dropped to the point where it is no longer a barrier to entry.
Shahzad says Starlink has the first mover advantage and has the largest constellation, but it is not the only player. There are new companies focused on different markets like services for IoT or direct to mobile.
Satellites have long been the obvious choice in places where there is no terrestrial connectivity. Shahzad says this will expand so that the technology will complement existing services and, in some cases, replace them.
Better quality for rural users
'There are still a lot of areas where broadband quality is not good enough, or the infrastructure does not provide high-speed broadband. Leos (Low Earth Orbit satellites) can provide better speeds in those instances.
'And there are businesses who want a backup or a fallback. So if there is an outage, they still have business continuity.'
Another area where satellites are likely to dominate is with connected or autonomous vehicles. Shahzad says new electric vehicles now come with embedded satellite connectivity, to the point where some car manufacturers are launching their own satellites.
The technology is also being used where people work at a temporary location such as a construction site. And then there are the maritime and aviation applications, neither of these are well served by existing networks.
Competition coming
Amazon's arrival will sharpen market competition. Shahzad says we can expect to see five or six major players but there will be more. 'By our last count, there are almost 20 providers in this space who are all building their own constellations.'
The bottleneck for the industry is finding launch slots, which is where SpaceX and Starlink have another advantage. Many of the would be competitors will use SpaceX for launches.
'Once this bottleneck is overcome, we can expect to see tens of thousands, even hundreds of thousands of satellites in the sky. He says experts estimate the maximum number could be around a million.'
Challenges remain
Despite cheaper launches, the technology has one big disadvantage over terrestrial networks: satellites have a limited life span.
'It's around five years for the earlier versions. Starlink says the new satellites last eight to 10 years, perhaps. But even then, they need to replenish those satellites quite often. It also means that there is potential of a lot of space debris. And that is one area which is still a little grey.'
Another grey area is spectrum. Satellite operators typically don't buy spectrum and there are multiple competing and conflicting standards around the world.
Direct to mobile
When it comes to direct to mobile services there are some satellite operators who use the spectrum allocated to their mobile network operator partners. That will make newer satellite operators dependent on their partners.
Because spectrum is allocated on a country by country basis, and most MNOs are based in a single country, satellite operators will have to manage a patchwork of standards.
Shahzad says there are issues managing interoperability and handover: 'How do you manage interference between the two? How do you manage the handover, and do you want to carry on the session from one network to the other—and how do you bring it back?'
This analysis was originally posted in the August 1, 2025 edition of Download Weekly newsletter and can now be found at Gartner's Khurram Shahzad on satellite market.
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