Ericsson and Intelsat Join the NTN Market: How will Business Models and Network APIs Evolve with Mainstream NTN Adoption

By Andrew Cavalier | 3Q 2024 | IN-7539

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Earlier in June, Intelsat (Luxembourg) successfully led the approval of The 3rd Generation Partnership Project's (3GPP) "Ku-band Work Package." This initiative advances the adoption of the widely used Ku-band (12-18 GHz) spectrum as a fully standardized 5G solution for Non-Terrestrial Networks (NTNs). Although the certification process for deploying Ku-band New Radio (NR) NTN services is expected to be completed by the end of 2025, the company is now able to provide the satellite component for a 3GPP-compliant NTN. Unsurprisingly, this has led to a series of new partnerships in the communications landscape.

In September, Intelsat and SoftBank (Japan) announced a collaboration agreement to launch a standards-based ubiquitous network and develop a universal device that can connect across networks. In satellite talk, this sounds like a Very Small Aperture Terminal (VSAT) that can connect across the Ku-band and terrestrial cellular networks. Shortly after this announcement, Vodafone also announced the introduction of Intelsat's Flex portfolio to complement Vodafone's terrestrial network. While not strictly an evolution from the adoption of the Ku-band for NTN, Intelsat's Flex portfolio is well-positioned to benefit from standardization.

Alongside these developments, Ericsson (Sweden) has also joined the Mobile Satellite Services Association (MSSA), indicating that Ericsson's RAN products will inevitably support "Narrowband NTN" (NB-NTN) (L-band and S-band) integration via Narrowband Internet of Things (NB-IoT) upgrades. This follows a similar move by competitor Mavenir (U.S.), which has been actively supporting NTN integration via a cloud-native NB-IoT RAN solution. Finally, Verizon (U.S.) has also teamed up with Skylo (U.S.) to provide direct-to-device messaging for customers with NTN-capable smartphones.

Terrestrial networks moving toward an NTN architecture will now be able to select a roaming partner from most satellite networks in operation across the Ku, Ka, L, and S-bands. The draw of this architecture is the integration of terrestrial cellular and satellite infrastructure, which will allow mass-market smartphones, mobile VSATs, and Industrial IoT (IIoT) devices to seamlessly roam between satellite and cellular networks. From the perspective of satellite operators, NTN presents a significant opportunity. Many established Ku-band operators, such as Viasat (U.S.), SES (Luxembourg), EchoStar (U.S.), and more can now offer a more flexible connectivity solution based on standardized technology. What this also indicates is that many "new" satellite solutions will be designed with mobility and interoperability in mind, allowing newer VSATs and mobile user equipment to be network agnostic, and seamlessly switch between any cellular and satellite network.

This agnostic approach to integration is already becoming the case with NTN-capable smartphones, IoT devices, and cellular networks. Users with standards-based devices, such as the Google Pixel or IIoT devices using NB-IoT/LTE-M (both of which connect with Skylo), will be able to connect across any partner network, whether terrestrial or satellite. Similarly, as more networks adopt standards-based NTN, dependency or exclusivity between specific satellite or cellular partners will decrease, as more options will be available on the market. Eventually, this will lead to an evolution in revenue-sharing business models, where NB-NTN and NR-NTN are billed based on usage, link type, and data rates needed or through shared capacity pools bundled in the carrier's connectivity subscription package. Even today, narrowband services, such as emergency SOS via satellite, are quickly becoming "free" offerings viewed more akin to a basic human right, with costs absorbed by the operator.

There are many positive signals in the communications market, especially toward the evolution of NTN, but investment across NB-IoT networks has yielded mixed results for carriers. In many respects, this evolution and promise in the NTN ecosystem, particularly for NB-IoT, may be enough to convince carriers to not shut down their networks. Indeed, with the arrival of emergency SOS and messaging via satellite across most major smartphones, and particularly those equipped with the new Snapdragon X80 Modem-RF system from Qualcomm, a lot more devices may be potentially accessing these networks. ABI Research's tracking of the market suggests that service revenue generated from standards-based Direct-to-Cellular (D2C) NTN activities across all NTN-compliant bands could reach over US$5 billion by 2030, suggesting a 2026 to 2030 Compound Annual Growth Rate (CAGR) of 25.5%.

While some carriers may not yet be convinced of the potential of NTN, there is no denying that the market from the infrastructure to the device level is moving toward integration. The route to NTN is not elusive either and there are many strategies to accelerate network transformation. In this respect, preparing for future network integration means Communication Service Providers (CSPs) will need to develop a satellite strategy and roadmap including:

• Collaborate Roadmap: Collaborate with government and local CSPs (satellite and cellular) to help define an NTN roadmap for the market.Assess the market potential for NTN in the region and the potential success of the new business venture. Confirm if this technology is even government-approved and which satellite operators are in proximity of the network to help define a roadmap to NTN. In this respect, influencing local government and organizations, alongside proactive research and marketing, will be essential for successful deployment.
• Network Integration: Reviewing the architecture and geographic deployment of the Radio Access Network (RAN) will be important. As the NTN architecture requires a fiber connection between a terrestrial mobile operator's eNodeB/gNodeB to the satellite operator's ground station, the geographic location of the RAN relative to satellite ground networks will influence costs for integration. Additionally, upgrading a Long Term Evolution (LTE) network to support NB-NTN (essentially NB-IoT) will require more than just software upgrades (e.g., core network and eNodeB hardware), and could push out timelines and balloon costs for accessing NB-NTN revenue.For 5G networks, there may be more than software upgrades with Mavenir or Ericsson, but also updating network Application Programming Interfaces (APIs), which accounts for the increased complexity in networks, especially when gNodeB functionality is moved to satellites. In this way, Operations Support Systems (OSSs) and Business Support Systems (BSSs) are expected to scale significantly to handle the increased complexity of managing satellite constellations, ground stations, and inter-satellite links, which may include closed-loop automation and Artificial Intelligence (AI)-driven systems for real-time topology management and optimization.
• Business Models: Alongside updating infrastructure software and hardware, assessing and evolving business models to accommodate NTN will also be necessary. As discussed earlier, terrestrial CSPs would need to assess which satellite operators they have access to and decide what type of NTN services they then could unlock. Designing NTN offerings that are commercially viable in the market will be crucial, as pricing will be critical to ensuring that the market will even be willing to adopt the technology and ensure that the Return on Investment (ROI) from upgrading the network will be met.