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Satellite Smorgasbord – GEO, MEO, LEO and HAPs Serving Up Multi-Service Connectivity9 December 2024

Satellites serve as essential components of our global infrastructure, facilitating communication, navigation and Earth observation as well as many other commercial and governmental uses. The four main types of satellite each play specific roles and have their own distinct characteristics:
LEO (Low Earth Orbit)GEO (Geostationary Earth Orbit)MEO (Medium Earth Orbit)HAPS (High Altitude Platform Stations)
Altitude500 to 2,000 km above Earth.Approximately 36,000 km above Earth.Between 2,000 and 36,000 km above Earth.Operate at altitudes typically between 20 to 50 km above Earth.
Orbit CharacteristicsSatellites in LEO circle the Earth quickly, typically every 90 to 120 minutes.Satellites in GEO match the Earth's rotation, appearing stationary relative to a fixed point on the ground.Satellites in MEO have longer orbital periods than LEO but shorter than GEO, typically used for navigation and some communication services.These are not satellites in the traditional sense but rather airships or drones that can provide coverage over a specific area.
Use CasesIdeal for applications requiring low latency, such as broadband internet, Earth observation, and remote sensing.Commonly used for telecommunications, broadcasting, and weather monitoring due to their consistent coverage.Commonly used for global navigation satellite systems (“GNSS”) like GPS.Used for communication, surveillance, and environmental monitoring, offering low latency and localised coverage.
ExamplesStarlink, OneWeb, and the International Space Station.Intelsat, SES, and weather satellites like GOES.GPS satellites and O3b.Google's Project Loon (now defunct) and AeroVironment.

"As satellite technology evolves, a multi-orbit and multi-service approach is becoming increasingly important to meet increasingly diverse connectivity needs."

As satellite technology evolves, a multi-orbit and multi-service approach is becoming increasingly important to meet increasingly diverse connectivity needs. By leveraging the individual strengths of LEO, MEO and GEO satellites and HAPS, operators can deliver comprehensive solutions that enhance global communication, navigation and data services.

LEO constellations

LEO satellite constellations have been the focus of the market in recent years and have achieved market share and attracted funding across both the broadband and earth observation verticals. Companies like SpaceX with Starlink, OneWeb and Amazon’s Project Kuiper have already made substantial investments.

Given the current interest rate environment and tightening of liquidity, investment criteria are becoming more stringent and, given the large capex requirements of LEO constellations, a number of proposed LEO constellations are having to adapt to these demands. Investors are also looking at the competition within the broadband vertical in particular and the impact these competing LEO constellations will have on pricing and revenues.

Investors will remember lessons learned from the 1990s, when several LEO projects faced challenges and ultimately scaled back, highlighting the importance of addressing factors such as market demand, cost efficiency and regulatory hurdles. Those LEO projects were hindered by high costs and limited consumer adoption. Technological improvements in manufacturing and launch capabilities have since made the deployment of LEO constellations much more feasible and the market has expanded enormously with the internet of things and demand for 5G. The returns on investments into LEO projects, given the high and stable revenues generated by the sale of capacity once the projects are operational, remain enticing and may in the current market lead to different actors including sovereign wealth funds, infrastructure funds and alternative investment providers coming into the market.

GEO – still shining bright?

Despite the latency of GEO satellites, their high-capacity throughput means they continue to play a crucial role in telecommunications and the offerings that satellite operators can provide. GEO satellite operators continue to replenish the GEO satellites in their fleet and will continue to do so going forward.

The rise of LEO constellations and the market demand for low latency connectivity has led to consolidation within the satellite operator market. Recent examples of this are the mergers of Eutelsat and OneWeb to combine Eutelsat’s GEO operations with OneWeb’s LEO operations, as well as Viasat’s acquisition of Inmarsat. Others are achieving multi-earth orbit offerings through contractual agreements such as SES signing agreements with OneWeb and Starlink.

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"Investors will remember lessons learned from the 1990s."

These multi-earth orbit offerings are especially important in the lucrative aviation and maritime verticals, as demonstrated by Intelsat’s acquisition of Gogo’s commercial aviation business as it was a leader in broadband connectivity for the commercial aviation market.

MEO – the sweet spot?

MEO satellites offer a compelling balance of coverage, latency and capacity. They can cover large geographic areas with fewer satellites than LEO constellations, making them a cost-effective solution. They are particularly beneficial for applications requiring consistent service in areas where GEO satellites may struggle, such as high-latitude regions.

MEO satellites do have higher manufacture costs however due to needing the technology to transmit more powerful beams greater distances, which leads to larger satellites and higher launch costs.

HAPS – do we need to leave the atmosphere?

HAPS are increasingly seen as a complimentary solution in the communications landscape, sitting alongside LEO constellations, after a turbulent time for the technology with Project Loon (Google’s HAPS offering) being shelved. HAPS can provide low latency connectivity to localised areas with less infrastructure than traditional satellites. Aalto recently received investment into its HAPS offering from NTT Docomo, who will look to use the drone technology to keep customers connected in areas without terrestrial connectivity. Other use cases for HAPS technology are high frequency trading where ultra-low latency is paramount.

Multi-orbit – the future

Customers have varied needs and there is no one size fits all solution. As the recent consolidation in the satellite operator market shows a multi-orbit offering differentiates providers from their competitors and allows providers to meet the complex needs of their customers. It is a trend the market expects to continue, with rumours of both potential contractual tie-ups and mergers between players looking to expand their offering into the multi-orbit and multi-service space not going away any time soon.

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