From right: Jean-Luc Vuillemin, Orange; Shigehiro Hori, Space Compass; and Paul Abfalter, Telstra. Photo: Access Intelligence

The relationship between satellite operators and telcos can at times seem like a troubled marriage — “It is difficult to live together. But it’s more difficult to live alone,” Jean-Luc Vuillemin, special executive advisor to the CEO of mobile network operator Orange, told a session at last week’s SATELLITE 2024.

Leaders representing Orange, Telstra, and Space Compass offered a variety of marriage advice from terrestrial network operators and new hybrid telcos to satellite providers, while echoing Vuillemin’s commitment to stick with the relationship.

Satellite connectivity is “existentially important for us in Asia,” said Paul Abfalter, head of North Asia & Global Wholesale at Australian MNO Telstra. Because Telstra serves markets like the remote rural areas of Australia and the Pacific Islands, which don’t have fiber connections, satellite-provided cellular backhaul is sometimes the only way to get mobile connectivity, he said.

The telco representatives take a realistic view of the developments in the satellite industry like Low-Earth Orbit (LEO) satellites.

While the satellite industry is excited about LEO, Vuillemin said, “If you want to have the best connectivity at the lowest possible cost, nothing is better than a big traditional GEO [Geostationary] satellite.”

The biggest problem in the marriage of satellite and telco partners Vuillemin suggested, is how fractured the satellite landscape is. “Satellite is not an industry — it is a set of industries,” he said, adding that it functions as if each operator is its own industry and they don’t know how to work with each other.

“It’s exactly the same situation that mobile operators were in 60 years ago, when you had one program in each country and it was not possible to interoperate,” he said. Vuillemin suggested some operators are “continuing to use a lack of standards as a protection of their own business.”

Satellite operators “don’t really understand the needs” of their users, he added, explaining how different the Starlink customer experience was. “I ordered it on the internet,” he said. Three days later, the terminal arrived. He set it up in his garden and was on the internet five minutes later.

“Compare that with a traditional satellite provider,” he said.

Starlink terminals are priced much cheaper than traditional “very big, very proprietary, and very expensive” terminals, said Shigehiro Hori, co-CEO of Space Compass.

In the relationship between telcos and satellite providers, Space Compass is in a unique position. The company is a joint venture between Japan’s largest terrestrial network operator NTT and national satellite provider Sky Perfect JSAT. Co-owned by its two parents, Space Compass is staffed by a joint team drawn from both companies, and represents a whole greater than the sum of its parts, explained Hori.

JSAT “understands the [satellite] technology, but they don’t know much about the cell network businesses and vice versa. NTT doesn’t know much about satellites,” he said.

As befits its lineage as the offspring of satellite and telco, Space Compass has a “futuristic vision, fusing terrestrial and non-terrestrial networks” to provide seamless connectivity in hard-to-reach markets.

Space Compass also plans to invest in high altitude platform stations, or HAPS, with plans to enter service in Japanese fiscal year 2025. HAPS function as a “cell tower in the sky,” said Hori, with a much greater reach than a terrestrial cell tower, and more bandwidth than a ground-based local station could offer.

The company has signed a   in 2022 with Airbus HAPS, a subsidiary of the European aerospace giant which says it aims to provide services the Zephyr solar-powered aircraft. Space Compass is also at the center of a Japanese government effort to develop space-based direct-to-device capability via HAPS.

The effort to develop direct-to-device capability underlines why satellite operators need telcos to go to market, said Abfalter.

“I think telcos are needed a lot more than what they were 10 years ago. Just partly because the volume and reach needed now is so much bigger for those B2C use cases, and even for the B2B ones. Volume means telcos have become a much more important channel for the satellite industry than what they were 10 years ago,” he said.

In the past two years, Telstra’s corporate customers have been demanding broadband connectivity “in some weird and wonderful places.” He said large multinational corporations are  “really ahead of the game, wanting to see LEO use cases come in as quickly as possible.”

Both sides of the marriage need each other. While satellite operators need telcos for distribution, telcos need satellite to connect in places no one else can, said Abfalter. Most of the bid tenders coming from large multinational enterprises required global wireless connectivity that only satellite could guarantee.

But telcos don’t always feel the love in return, he said. “I don’t think we’ve necessarily felt like a marriage partner for most satellite providers — more like an ad hoc girlfriend that gets lots of urgent calls when there’s a problem. It feels like that most of the time.”