High Demand for High Bandwidth Laser Communication
The market for optical satellite communications has shaped up in recent years, led by the rise in New Space satellite network operators requiring high bandwidth intersatellite links and remote sensing solutions that demand greater downlink capabilities. Still in its early stages, this market continues to be largely equipment-centric. However, multiple players have moved on from the technology development phase to in-orbit testing and demonstrations, with a few established vendors having rolled out operational OISLs. Moreover, there is also a push for standardization on multiple fronts.
It bears repeating though, that laser communication, while bringing numerous technological advantages over RF, needs to be considered alongside Cost, Technology and Product Market Fit to identify and address the right target segments: split across communications (nGEO constellations and data relay) and Earth Observation downlink. NSR’s Optical Satellite Communications, 4th Edition market research report presented a cumulative revenue opportunity of $2.1 billion for laser communication terminals over the next ten years.
Satcom is a High Growth Market
NSR tracks over 174 non-GEO satcom constellations of various sizes, by mass, number of satellites and target markets. At least a third of these are expected to have a high likelihood of launch, with a sizable number of satellites expected to carry optical inter-satellite links (OISLs) and direct-to-earth (DTE) links.
Sampling of Potential Satcom Constellations (Source: NSR)
While a majority of the potential users of OISLs form a “closed” market, relying on internalized capabilities and verticalization to develop lasercom terminals in-house, the remaining open market is sizable enough for a multi-vendor ecosystem. Most such potential constellations are large-scale deployments, ranging in the 100s of satellites, and are subject to launch and contract delays. Even now, only a few of these contracts for OISLs have been made public. Despite the hype surrounding the latest constellation wave, this market is not immune to failures and challenges: the memory of Leosat is still fresh, even as Telesat considers downsizing its constellation, owing to funding and supply chain constraints. (SpaceX’ recently deorbited sats?)
As such, amongst the remaining operators, most ISL-enabled satellites are expected to be part of the second and future generation spacecrafts of the respective constellations, as initial tests and demonstration satellites in the next few years help boost confidence in OISL technology. In time, as launch mandates from the FCC and ITU zero-in on these operators, this market is forecast to grow quite aggressively. Market adoption will come in a step function, and eventually allow for LCT prices to come down so that it may trickle down into other target segments such as the data downlink and relay markets.
For LCT adoption, multiple factors are at play when selecting a specific technology, including data rates, security, link availability, payload constraints, technology fit and cost. In the case of satcom, the particular strengths of optical communications make it the ideal technology for high volume backbone network traffic across large distances, or in cases where security is paramount.
Satellite is the preferred delivery mode when it comes to backhaul traffic of cellular and terrestrial broadband wireless networks, particularly in inaccessible and remote regions. The high data rates and large volume capabilities of optical make it a good fit for future end-to-end backhaul solutions, as network adoption increases in the future. RF-based trunking satellite services are another area with increasing growth, wherein satellite solutions are now on par and competitive with terrestrial solutions in many geographies. As this market transitions towards premium services, satellites are expected to roll out high capacity trunk lines via satellite as the principal network, or in some cases, a back-up solution. Here too, optical satcom brings high data rate capabilities, with 10 Gbps demonstrations already underway. With plans for much higher throughputs in the future, optical comms makes for an attractive solution for such satcom services.
EO Hungry for Data Downlink
The market for Earth Observation (EO) data and derived products/services continues to push for high volume and high variety of solutions, with an increasing number of constellation operators launching sensors of various kinds. High resolution systems, hyperspectral/SAR EO constellations and real-time video have come online, and radio frequencies are becoming strained for the adequate and timely transmission of large amounts of data. Currently, EO downlink predominantly uses existing ground solutions in the market, such as Ground-station-as-a-Service (GSaaS) or virtual ground solutions, making use of RF comms technology with a data rate cap usually in the 2.5-3.5 Gbps range for Ka-Band at the higher end.
The increasing number of non-GEO satellites being launched are expected to drive the data volume demand for downlink and relay solutions, necessitating higher data rates in the future, in the range of 10s-100 Gbps, achievable primarily through optical space-ground links. These will require higher data rates for downlink due increase in per image data volume with higher resolution. Such higher data rates of 10s-100Gbps are achievable using optical space-ground links.
On the other hand, the EO pipelines/ecosystem and infrastructure are only beginning to catch up and evolve to meet this demand. As ground systems virtualize and catch up with next-gen sensors launching into space, optical satcom technology is seen as a potential facilitator for these EO operators. It is expected to significantly increase the data transfer speeds from 10-100 Gbps, thereby easing the data transfer bottleneck in orbit.
At the same time, innovations in cloud-based ground services and virtualized systems have driven many evolutions in the existing RF satcom market, bringing in higher efficiencies and lower prices, and thus pose a major competitive element to optical DTE terminals. However, even such smaller, more efficient RF antennas will not be ideal to meet larger EO data demands of the future, and optical is well suited to fill this gap. The use of OISLs in data relay systems is another interesting development, as commercial relay operators look to provide customers access to EO data at very low latencies. However, there is still a long way to go before this technology sees widespread adoption beyond government and military players. Following this, the security advantage of optical satcom, in light of rising cyber-risk concerns in the commercial enterprise markets, is one of the key drivers for wider market adoption of optical DTE terminals: the narrow beam-width and relative interference immunity of optical makes it well suited for high security applications.
In spite of being an attractive solution, LCT prices are hinged on the non-GEO HTS constellations market and are still quite cost-prohibitive for the EO segment. Meanwhile, Software-Defined Radio payloads in the RF spectrum pose an additional threat, as there is active development in optimizing existing downlink rates.
The Bottom Line
In the case of high throughput satcom, OISLs bring in a few key advantages that make them an attractive solution: they allow for a reduction in the number of HTS constellation ground stations, have lower terminal SWaP and allow operators to circumvent regulatory hurdles associated with landing rights. On the EO side, increased adoption of optical satcom for downlink will be possible when terminals become cheaper in the mid-term. Until then, and for the foreseeable future, Gov/Mil customers are expected to drive demand as anchor customers, looking to adopt optical communication technology for its high security, anti-jamming features.
In the long term, a healthy ecosystem of multiple vendors is expected to diversify the types and number of LCTs available, and alongside efforts toward standardization (such as the SDA’s OISL Standard 3.0), we are on the cusp of a high growth, high-bandwidth space-based lasercom market.
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