The Importance of Satellite Networks in IoT

March 2024

Telecoms & Connectivity

Alex Webb

Senior Research Analyst

As we discuss in our latest research, satellite networks are able to provide seamless connectivity, even where there is limited to no existing cellular infrastructure - opening up countless possibilities for IoT devices.

There are three key satellites used in developing satellite networks for IoT devices:

• LEO (Low Earth Orbit) - LEOs operate at an altitude range of 600 km to 1200 km. They are expected to be a core part of future networks, working to expand access, and improve coverage with high signal quality.
• MEO (Medium Earth Orbit) - MEOs typically occupy an altitude range of 2,000 km to 36,000 km. As a result, they provide a higher vantage point than LEOs, whilst providing a lower signal propagation delay, and latency than GEOs.
• GEO (Geostationary Orbit) - GEOs operate at an approximate altitude of 35,786km in a geostationary orbit, and an orbital period the same as the Earth's rotation period. As a result, a single GEO can provide consistent coverage for 100 to 6000 kms. Typically, GEOs are used for providing network access support, and covering the Ku band.

At present, the majority of satellite networks for IoT are LEO constellations. This is as the shorter distance between satellites and the Earth reduces signal propagation losses, decreasing the power demands placed on IoT devices. Moreover, the cost developing, constructing, and deploying LEO satellite networks is far less than alternatives such as MEOs and GEOs. 

Satellite networks offer considerable advantages over terrestrial networks for cellular IoT use cases, including: 

• Remote Connectivity – Cellular IoT devices are frequently deployed in rural and remote areas, where existing cellular network infrastructure is limited or lacking. Satellite networks provide enterprises with low-cost connectivity, expanding the potential for remote cellular IoT use cases, such as maritime, and remote facility sensors.
• Throughput – Satellite networks are able to operate in higher frequency bands than traditional 5G networks, enabling operators to increase the throughput of their connections. This additional throughput will be critical in supporting data intensive IoT use cases, such as connected vehicles.
• Reliability – Satellite networks are able to support operators in providing a flexible approach to connectivity, as they can integrate satellite access with their wider networks, providing connectivity where there is a lack of coverage, and a failsafe in the case of terrestrial network issues. Moreover, satellite networks are less vulnerable to damage than terrestrial networks, as the probability of damage via natural disasters, such as earthquakes, is eliminated. Consequentially, satellite networks for cellular IoT will be less likely to suffer losses in coverage, making them more reliable than terrestrial alternatives.
• Multicasting – Each satellite provides its own coverage area, which are far larger than traditional cellular base stations. As a result, multicasting through satellites is much easier and cost effective. Multicasting distributes data to a collection of destinations via transmitting a single copy of data to a multicast address. This is then distributed to an entire group of recipients. This is ideal IoT devices, as they have limited power and transmitting capabilities.

IoT use cases for satellite networks can be characterised as delay tolerant or mission critical. Delay-tolerant use cases are where IoT devices experience frequent prolonged disconnections, with data only needing to be transmitted intermittently. This will include use cases, such as sensors for monitoring environments over prolonged periods of time, such as sensors used in agriculture and water monitoring. Mission-critical use cases require lower latency, and higher reliability than delay tolerant use cases, such as smart grids.

Due to the higher latency in satellite networks, Juniper Research anticipates that the majority of early IoT use cases will be delay tolerant. Mission-critical use cases will be restricted to remote areas, where there are limited alternatives for connectivity.

As a result, Juniper Research recommends that operators focus the initial development of their satellite network services towards delay-tolerant use cases; enabling enterprises to integrate sensor monitoring and management platforms with data on connectivity from satellite networks.

At present satellite IoT monetisation is focused on connectivity, with enterprise being offered a range of SIMs including:

• Data Subscriptions – SIMs are provided with a data allowance for each month. This allowance can range from as little as under 100mb to SIMs which provide 30Gb of data. This is billed monthly.
• Unlimited Subscriptions – Monthly subscription fees are paid to satellite operators, with devices facing no constraints in data consumption.
• One Time Payments – Enterprises pay for connectivity in bulk, with SIMs provided enabling connectivity for timespans as long as 10 years instead of being billed monthly.

However, revenue from satellite connectivity is declining, with satellite operators such as Sateliot already offering satellite connectivity for less than $1 a month.  Moreover, the GSMA estimates that only 10% of IoT revenue is generated by connectivity, with 40% to 60% of revenue being generated by application, platform, and services for cellular IoT.  As a result, it is essential that satellite operators expand their offerings beyond connectivity.

A key value-added service already provided by many satellite operators is automated steering between terrestrial and satellite networks. This enables enterprises to only rely on satellite connectivity when necessary, limiting their connectivity costs. Satellite operators must continue to develop this offering by enabling enterprises to design specific network quality of service KPIs, which will allow enterprises to improve the efficiency of steering between satellite and terrestrial networks.

We also recommend that satellite operators develop value-added services such as managed connectivity, and maintenance which will reduce the complexity of deploying and maintaining satellite connectivity for enterprises. In turn this will increase demand for satellite IoT services, thus increasing revenue. 

The development of satellite IoT value-added services also will represent a significant opportunity for IoT management platforms, as through cooperation with satellite operators these services can be integrated into the platform. This will enable IoT management providers to consolidate enterprise’s value-added services for enterprises within a single platform. In turn, this will improve the simplicity in managing services for enterprises, as well as enabling greater consistency across satellite network operators where necessary.

Furthermore, through integration IoT management platforms will be able to enable enterprises to connect their terrestrial and satellite management strategies and approaches, facilitating consistency where necessary and improved cross-network analytics.

Source: Global Cellular IoT Market 2024-2028

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