If you have a reasonably long memory, you may recall the headlines in the 1990s during the last dash for space. Unfortunately, that experience didn’t end well for the new entrants and a lot of investor capital was lost.

But I’m not here to be a Cassandra. This time it does feel different; this time, technology has seemingly caught up with ambition. And there’s no denying that there is an insatiable appetite for broadband connectivity among consumers and businesses alike, an appetite that terrestrial networks are currently struggling to satisfy – for reasons both financial and technical.

The result is a new kind of space race in which many tens of billions of dollars are being pumped into the creation of new low earth orbit (LEO) constellations of satellites. Some of the world’s brightest and most successful businesspeople have jumped into the fray, putting their wallets and reputations on the line. The hype machine is in overdrive, declaring that there is a ‘new space’ that will provide revolutionary, world-changing benefits.  

Reality vs hype

As is often the case in such situations, the excitement overshadows some inconvenient realities that are still very much worth considering. While there is clearly a place for LEO satellites – more on that in a moment – they are not the be-all and end-all of future space-based communications. A good place to start is with customers, and by asking whether LEOs are the best solution for their current and future needs. 

For consumer markets, I know very well the power of connectivity and, in my role on the UN Broadband Commission, I am focused on new ways to connect the unconnected. Clearly, satellite services are one way to achieve that goal, particularly in the world’s remotest regions. Whether they will remain the best way over time, given the proliferation of both terrestrial and fixed mobile networks, is unclear. Certainly, for much of the world today, particularly in dense urban environments, there are better options, and LEO constellations on their own are unlikely to add much in terms of new capability.

For non-consumer customers – particularly mobility users in governments and enterprises of all kinds – while they are hearing a lot of noise around the exciting new world of LEOs, one ‘look under the hood’ is enough to convince them that what’s being offered is a poor facsimile of the services they’re using; LEOs are simply not designed with mobility users’ needs in mind. It would be like an airline using hundreds of light aircraft to carry millions of passengers across the Pacific: the customer service wouldn’t be there, the economics don’t add up and the journey would probably be a harrowing one.

Of course, I may have skin in the game but this isn’t just my opinion. Increasingly, independent voices (from McKinsey & Company to Nature magazine) are questioning the perceived logic of the story being presented, and the assumptions being made about the technologies, business models and customer experience – and even the environmental impact both in space and here on Earth. 

The GEO alternative

In the rush to tell the shiny new LEO story, what is also being ignored is the tremendous developments under way in geosynchronous orbit (GEO) satellites, such as those of Inmarsat.

Not only are such GEO satellites specifically designed for government and enterprise users, new state-of-the-art technologies are being deployed now, both in space and in the all-important ground segment. These will not only provide full global coverage – something that will take many thousands of LEO satellites to match – but are also bringing a step change in capabilities.  

Rather than some theoretical future capability, current GEO technologies already meet the mobile connectivity needs of large, critical sectors such as maritime and aviation. They have the proven, secure services that can fulfil the demanding specifications of governments and they can also support the needs of all kinds of Internet of Things applications in sectors such as rail, utilities and agriculture.  

All of this is available today, and without the challenges of stand-alone LEO systems. And, let’s be clear: those challenges are not small. They range from environmental (poorly understood impact on Earth’s upper atmosphere); to financial (McKinsey has noted that costs must come down by at least 75% for LEO constellations to be viable); to technical (such as the need for terminals with costly, bulky antennae); to societal (the high risk of space junk); to regulatory (inadequate governance); to operational (the requirement of hundreds of ground stations) and beyond.

Of course, such challenges are surmountable. I am a firm believer in human ingenuity and with enough time, money and innovation, I have no doubt some of these issues will be solved. But others, such as the broad impact of tens of thousands of new spacecraft flying near the Earth, will remain difficult to address.  

I do believe – and we believe at Inmarsat – there is a role for LEO satellites. This role, however, is not what is being considered today; it is not some all-encompassing, hugely expensive, unproven, massive global constellation largely focused on consumer markets. Rather, we see LEO satellites as a potential add-on to existing systems to provide additional capacity where it is needed the most; essentially ‘hot spots’ designed to meet specific user needs. Take shipping, for example: there might not be a need for massive capacity in the middle of the ocean, but in the Panama Canal? Surely yes.

As a result, the real answer is not ‘either/or’ LEO and GEO satellites, it is almost certainly ‘both’. But the excitement about so-called new space needs to be tempered with some hard-headed reality checks. While history does not have to repeat itself, the risks are real that it does, and that plenty of investor money is spent chasing a solution to a problem that does not exist – and that creates plenty of new problems along the way.

In this new space race, though, it’s not only commercial capital being risked. Governments are also investing and, in some instances, quite heavily. Of course, there is an argument to be made about the potential imbalance that government funding for new satellite operators creates in terms of terrestrial competitors. I would argue that the same can be said for its impact on the existing commercial satellite industry.  

This not to say that governments should not be doing more to connect their citizens, but surely supporting consumers and allowing them to make the choice of the connectivity service that they want and best suits them is a more practical and less risky strategy? 

The world deserves a more considered approach, one that focuses on the needs of the customers and considers the long-term impact and very real dangers – both financial and environmental – that come with a ‘Wild West’ approach to space. Of course, competition is important; it drives innovation. But so too is co-operation. And the space industry could take the lead here and become an example for other industries in tackling the massive challenges our world faces in the coming decades. 

Rajeev Suri is the CEO of Inmarsat, a role he has held since March 2021. He was previously president and CEO of Nokia.

This article first appeared in the June/July print edition of fDi Intelligence.