LEO IoT Interest Rocketing, but Some Plans May Drop
Nascent satellite operators are planning low earth orbit (LEO) IoT constellations, but experts told us to expect many to abandon constellation plans and industry consolidation. An FCC official said there's no apparent opposition among any commissioners to a draft order on Nov. 18's agenda granting U.S. market access for French IoT operator Kineis (see 2110280065). Its 25-satellite LEO constellation is scheduled to go into orbit via five launches starting in Q2 2023.
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Satellite IoT could support "a small-medium single digit number of players," Northern Sky Research analyst Alan Crisp emailed. He said NSR forecasts about 18 million in-service satellite IoT terminals by 2030. Each could backhaul data from hundreds of sensors, he said. The most lucrative applications for IoT include transportation, cargo usage, energy markets and agriculture, he said.
The attractiveness of LEO IoT is the low barrier to entry, emailed Rethink Technology Research analyst Alex Davies. LEO can easily reach IoT sensors "often found in awkward places, in remote areas, or just difficult spots that you don’t want to send telecoms engineers to," and handle their small data payloads, he said. LEO has simple and cheap antenna design and some approaches use LTE and/or low-power wide area networks, he said. Compared with the cost of a geostationary IoT service, "LEO looks almost hobbyist," and a constellation can be put together quicker than a terrestrial mobile network operator network or LPWAN can, he said. That means low capital costs, quick payback, decent opportunity to be acquired and venture capital interest, he said.
Small satellite operators have focused on IoT as one of their target markets, including Omnispace, Astrocast, Fleet Space Technologies, Spire, Myriota and Kepler.
Established satellite operators also have IoT plans or existing operations. Iridium, announcing Q3 results last month, said year-over-year billable subscriber growth was driven by commercial IoT. Globalstar said it's seeing a rebound in commercial IoT demand that was disrupted by the COVID-19 pandemic. Orbcomm CEO Marc Eisenberg said in September its $1.1 billion purchase by GI Partners is "an exciting new chapter for the Company’s continued leadership in the industrial IoT,” with it as a privately held company having resources and flexibility for faster growth and new markets. EchoStar told the FCC this week its Hughes business provides IoT service in the U.S. and its EchoStar Global Australia subsidiary plans a mobile satellite service (MSS) non-geostationary orbit satellite system in the S band that will support IoT and other applications. Inmarsat said its forthcoming multi-orbit Orchestra constellation will support its growing IoT business.
Kineis' constellation will provide IoT service and add to maritime domain awareness. Five of its satellites would actively monitor signals in the 156.7625-162.0375 MHz band transmitted by stations in the maritime service, said the draft order.
With so many players trying to get into IoT, some "have completely changed strategy," Crisp said, citing Hiber dropping its constellation plans and instead planning to use Inmarsat capacity for IoT. "We suspect we will see more of this in the coming 2-3 years," he said. "More abandonment of constellations, a few very successful constellations," and MSS IoT operators adapting with lower average revenue per user for high-end solutions, he predicted.
Davies said incumbent satellite operators eventually will make acquisitions "once they are proven to be functional businesses."