Pressure on teleport operators’ traditional business model continues to grow, driven by the rapid expansion of low-latency services delivered by low Earth Orbit (LEO) constellations. Led by Starlink, the LEO operators are cutting into the mobility and broadband markets that geostationary (GEO) operators have relied on amid the decline of their broadcast business. In turn, this has squeezed the teleports, which traditionally have provided uplink and downlink services for the GEO operators.
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To counter this decline, teleports are rapidly evolving by moving into the managed network services business. They are bundling connectivity from satellites in different orbits along with terrestrial-based services – even working with competitors – to remake themselves.
“Customers are looking for more comprehensive solutions that cover every possible communication need and contingency. Customers want to create more seamless and simplified management of their infrastructure and reduce the need to contract with multiple vendors or manage multiple pieces of equipment.”
The teleport industry is still in the early stages of this journey, and the pace of change is not uniform among operators, but the trend is clear, as laid out in the World Teleport Association report, From Teleport to Network Service Provider - The Search for Tomorrow's Business Model.
Navigating the New Business Model
This shift toward managed network services was underway before Starlink entered the market, but there is no questioning LEO’s role as accelerant. And while some of Starlink’s business is coming at the expense of incumbent operators, its low-latency, high-availability broadband service has also opened new markets for satellite services. Teleport operators are signing reseller agreements with LEO operators and increasingly bundling those services with GEO and terrestrial services to offer flexible, resilient solutions to an ever-more-demanding customer set.
To deliver multipath connectivity requires some enabling technologies. This includes software-defined wide-area networking (SD-WAN) that can dynamically route traffic within a network, Application Programming Interfaces (APIs) that allow different applications to communicate and Operations Support System/Business Support System (OSS/BSS) software that manages network infrastructure and customer facing activities including billing.
Delivering multi-orbit, multipath solutions also requires more focus on cybersecurity, and the cyber threat is growing as networks become more complex. “Given the sensitive nature of certain networks, whether in the energy sector or government and military applications, it is critical that there is a strong cybersecurity layer that prevents attacks and keeps the data flowing securely.”
Multipath Growth
Along with competing more effectively in traditional teleport markets, having the ability to deliver managed services via multiple orbits could help operators reach new, more lucrative markets. Mobile network operators (MNOs) have long regarded satellite services as too expensive and unwieldy to be fully integrated into their networks, but several prominent MNOs are beginning to incorporate LEO-provided services into their operations. For the satellite industry, close integration with the MNOs raises the tantalizing prospect of access to the trillion-dollar global telecom market.
| "...Along with competing more effectively in traditional teleport markets, having the ability to deliver managed services via multiple orbits could help operators reach new, more lucrative markets...." |
There are also additional opportunities becoming available in areas such as providing connectivity for Internet of Things services, serving the growing unpiloted aerial vehicles market and a potential opportunity that will be unique to LEO resellers – providing backup for terrestrial fiber.
Not all teleport operators feel the need to move into managed services. Some are becoming what is characterized as real estate plays. With the right location, access to cheap power, strong terrestrial connectivity and abundant floor space, these teleports can survive in a more traditional role of serving different satellite operators and managed service providers. Moreover, there remain customers that still want a simple connectivity solution without the complications associated with end-to-end managed services.
There is little question that the emergence of LEO constellations and the technologies to create multi-orbit, multipath solutions are giving teleport operators more flexibility to scale, pivot between markets and quickly spin up new partnerships that allow each company to focus on its strengths. Innovation on the fly will be critical in an industry whose landscape has changed more in the last couple of years than over the previous 15 years. “We need to be very fast in changing what we do and how we do things.”
Also, looming is Amazon Kuiper, whose LEO service will be similar to Starlink’s while adding direct access to Amazon’s vast network of data centers. More change, of course, means continued uncertainty, but it also is giving teleport operators new tools with which to adapt.
“We see the possibilities of truly seamless service across multiple networks hitting every element of life and business. While it might be hard to imagine the need for more connectivity in a world that is mostly connected, we feel we are just at the precipice of real growth and change in the way the world connects.”
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Jason Bates is editor for the World Teleport Association (www.worldteleport.org), which conducts research into the teleport and satellite industry, provides a unified voice for teleport operators and offers Teleport Certification programs to service providers. "From Teleport to Network Service Provider: The Search for Tomorrow’s Business Model" is available for free to members and for sale to non-members from WTA’s online store.