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There have been several trends in recent years that have caused the satellite communications market to have an ever-increasing need for more connectivity. Bandwidth-hungry applications such as video now require large data throughput at two to five times more capacity than previously required. As companies have come to expect always-on connectivity, reliability remains a core strength for the satellite industry.

With demands for increased connectivity and bandwidth, businesses are also looking for services that extend beyond satellites. For instance, as the Internet of things (IoT) becomes more prevalent and gains momentum across all major verticals and industries, the need for better geographical, Internet, and broadband coverage continues to grow.

Currently, 4G networks have reached the limit of what they’re capable of providing. A solution to the bandwidth demands points to the emergence of 5G.

In the past, the focus has been on 2G, 3G, and 4G. The difference now is that there’s a huge gap in the data rate between 4G and 5G. With 5G, the gigabyte capacity coming to end users is something that will completely change in regards to mobile. 5G requires huge capacity but is well designed for bandwidth-hungry applications such as live-streaming videos.

However, the satellite industry is facing some challenges with the emergence of 5G. First, the capacity that is needed to backhaul 5G networks is so large that today, the capacity is simply not available. Second, most IoT and cellular applications require very low latency. You may be able to achieve connectivity with low earth orbit (LEO) and medium earth orbit (MEO) satellites, but that’s it. This leaves users with very limited quality of service.

The good news is that many players in the satellite industry are starting to recognize the lack of capacity for the 5G market. New companies, like OneWeb and LeoSat, are addressing low latency and the need for huge capacities. Experts are predicting that these satellites will be available by 2021 or 2022, and while the first 5G network should be available by 2019, the capacity will come later in terms of applicable satellite technology.

With 5G, companies will also have to re-establish pricing because they will have to factor in the cost to launch a satellite. Because providers will supply a great amount of capacity with 5G, it will force them to lower prices to make it competitive with fiber pricing. This is a big challenge for paying back a satellite investment and a reason why there will be a revolution in all the launches. For instance, SpaceX is trying to reuse their shuttles to launch satellites to decrease costs. Ultimately, the introduction of 5G will bring a change in technology that will also affect the satellite launch ecosystem.

Additional challenges facing the satellite industry will be mitigated by the fact that operators will focus on urban areas for the first 5G deployment instead of suburban or rural areas. In a city center, fiber and satellites are not used for connectivity. Hence, the demands for 5G backhauling versus satellite will be much greater. Realistically, there will not be a massive satellite investment in 5G backhauling until 2022 or 2023. When it occurs, it will be a complete transformation in the industry. There will be great changes in technology, including satellite infrastructure technology.

Looking ahead, the IoT will not specifically affect satellite business in rural areas where population density is low and use of it limited. However, all those connectivity points would be consolidated through massive aggregation nodes that would be backhauled in Gbps toward central core networks. Satellite backhauling demands would, therefore, become extremely important in connecting those areas.

These changes make it an exciting time to be in the satellite industry. The emergence of 5G creates a business opportunity for the industry, and it’s clear that businesses are already adapting to the new technology. 5G is something that’s expected and highly anticipated. We will be ready for 5G and look forward to it!

These topics, as well as trends within the satellite communications industry, such as the evolving landscape with geosynchronous earth orbit (GEO) and non-geostationary satellite orbit (NGSO) operators vying for the same or different customers, will be discussed at PTC’18 during the Executive Insight Roundtable 1 : A New Year and a New Satellite?, as well as during the Satellite-Satcom in the Next Decade: What Will the Future Hold? panel, on 22 January.