Are satellites the final frontier for telecoms, or just taking up space

With approximately four million subscribers worldwide, Starlink is the market leader in commercial satellite connectivity, with close to 7,000 satellites in orbit and around 200 more launched every year. Starlink's network is designed for high-capacity, low-latency broadband. Each of the array's satellites orbits at 550km above Earth and covers a relatively small area, enabling high-speed service by dramatically reducing the time it takes for signals to travel back and forth. It's expected to lead in D2D services as well, though only about 100 of its satellites currently support D2D functionality.

Amazon's Project Kuiper aims to provide similar coverage, having recently launched the first 27 of its expected 3,200 satellites by 2029, as the beleaguered Bezos pet project races to meet an FCC-imposed deadline to have 1,600 satellites in orbit by summer 2026. If reports of production troubles are to be believed, the long-delayed project may lag behind competitors for some time.

AST SpaceMobile uses massive phased array antennas capable of connecting directly to standard smartphones, without the need for ground terminals. Each satellite acts as a "cell tower in space," supporting direct-to-device 4G/5G connectivity. AST currently has five commercial satellites in orbit, with plans to launch a total of just 168 satellites, thanks to their expansive ground coverage of 2,000-3,000 km in diameter. That means each satellite covers an area roughly the size of a small continent, albeit with lower capacity per square kilometre.

So, are we heading into a post-terrestrial era for telecoms?

Despite its many advantages, satellite communication still faces major challenges:

Latency
Even with LEO satellites, latency remains a barrier for real-time applications like video conferencing and online gaming. Coverage also depends on satellite orbit patterns, and the total capacity for connections.

Cost
Starlink's internet service can cost up to $250/month, not including equipment fees. However, surveys indicate that around 40% of customers are unwilling to pay more for satellite services. And for urban dwellers with strong fibre or 5G access, there's little incentive to switch, especially considering Starlink's "congestion charge" for new users in crowded regions. Maintaining satellite networks is also more expensive than expanding terrestrial infrastructure.

While lower satellite pricing is often available in developing and low-income countries, affordability remains a challenge in remote, rural areas.

Signal interference
Satellite receivers must be placed outdoors, and have an unobstructed view of the sky, meaning tall buildings or inclement weather can lead to service disruptions. Furthermore, LEO satellites' high velocity causes frequency shifts that must be compensated for dynamically to maintain signal integrity.

Limited bandwidth
Unlike cell towers, which can handle a high number of simultaneous connections in densely populated areas, LEO satellites offer much lower overall bandwidth. In dense cities, simultaneous connections can quickly overwhelm capacity - estimates suggest Starlink may support only 485,000 concurrent users across the entire US.

Device limitations
Sustained satellite communication also drains phone batteries rapidly, which is why current applications are limited to texting or emergencies. Since LEO satellites orbit quickly, devices must frequently switch between different satellites to maintain connectivity, and ensuring smooth handover remains a major challenge.

Satellite life expectancy
SpaceX is currently "retiring and incinerating" four or five Starlink satellites per day, up from just one daily before May 2024. In January 2025 alone, 87 Starlink satellites re-entered Earth's atmosphere.