LEO Satellite Broadband Expectations Need to Come Back to Earth

June 2020 - Jeff Johnston

Key Points

  • Low Earth Orbiting (LEO) satellites are being touted as a solution to bridge the digital divide, as they will be able to reach remote parts of the country with high-speed data connectivity.
  • Key proponents of the LEO solution include Elon Musk’s SpaceX and Amazon’s Project Kuiper, which are also two of the leading LEO satellite operators.
  • An estimated 3.8 billion people around the world do not have access to the internet, which offers a large, untapped market. And as the cost to build and launch LEO satellites comes down, there are reasons for optimism.
  • However, there is no shortage of headwinds facing the industry including bankruptcies that could reduce access to private capital, competition in urban and suburban markets, and space junk issues.
  • If there is a market for LEO satellite broadband networks, Amazon is well-positioned to succeed given its access to capital, bundling opportunities, and existing ground station infrastructure.

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