Building the Case for Satellite Backhaul in Rural Regions

Satellite backhaul can be a “communications enabler” for millions of people worldwide living in rural regions, where mobile connectivity services are challenging to deliver. Whether it’s a small rural community where people live and work or a remotely located enterprise job site, people need connectivity. In fact, the World Bank estimates that emerging countries can generate a 1.38% increase in Gross Domestic Product (GDP) for every 10% increase in broadband service penetration. While terrestrial solutions, such as fixed telco and wireless backhaul, are commercially viable in densely populated, urban areas, these connectivity solutions can struggle to be viable in many rural environments. A better option for Communication Service Providers (CSPs) in these scenarios is satellite backhaul due to its unique advantages.

Limits of Fixed Telco and Wireless Backhaul

Across 30 countries that ABI Research has assessed, mobile data traffic is growing at a Compound Annual Growth Rate (CAGR) of 42.6% and will exceed 6,800 exabytes per year by 2027. Much of this massively increased demand for mobile broadband will come from developing nations that lack proper cellular infrastructure. Therefore, satellite backhaul will play a key role in filling in the gaps where connectivity has historically been challenging for CSPs to deliver.

When it comes to backhaul from cell sites, CSPs may first consider fixed telco (fiber optics and copper) and wireless backhaul (microwave and Millimeter Wave (mmWave)) solutions. These backhaul solutions have proven reliable in urban and most rural scenarios, but there are still many remote, hard-to-reach regions where these solutions aren’t viable. These problems are summarized below:

• Problem with Fixed Telco Backhaul: Given the low population densities—and therefore, low Average Revenue per User (ARPU)—of rural areas, costly fiber deployments don’t make a lot of financial sense. Return on Investment (ROI) for fixed telco solutions will be disappointing for mobile operators. While many developing countries are implementing 5G in urban centers, traffic is still being generated by 4G, 3G, and even 2G cell sites. And although fiber could be deployed as a future-proofing strategy, it may be multiple years before the cell site sees the ROI.
• Problem with Wireless Backhaul: Although mcrowave/mmWave backhaul may have a Total Cost of Ownership (TCO) profile that is more commercially viable than fiber-optic, there may still be logistical (i.e., number of hops) and cost considerations that may make the deployment of microwave/mmWave backhaul cost prohibitive. Financial and logistical challenges, such as spectrum licensing, site acquisitions, installation, and maintenance, are compounded in low-populated, inaccessible regions.

Satellite backhaul, on the other hand, doesn’t suffer from these connectivity challenges, which is a key reason why satellite-to-cellular services are gaining traction.

Advantages of Satellite Backhaul

Satellite backhaul services offer unique strengths for remote and geographically challenging regions on which other cellular backhaul options cannot compete. Due to these differentiating factors, we expect 1.2 million backhaul links to be supported by satellites in 2030, compared to 287,000 in 2022. The advantages of satellite backhaul are outlined below:

Ubiquitous Coverage

Entire countries or continents can be provided with communications services with just a single geostationary satellite. This includes completely rural areas with adversarial conditions for terrestrial cellular infrastructure. Having widespread cellular coverage offers several advantages, such as enabling fast and cost-effective voice and data connectivity from anywhere in the world. Satellite backhaul can provide direct links to satellite-based communication systems, allowing for voice, data, and Wi-Fi hotspot connections. Additionally, satellite backhaul allows CSPs to direct links to cellular base stations, providing voice and data coverage in both rural and completely rural areas. This type of cellular coverage is especially important for Internet of Things (IoT) connections in mostly traditionally inaccessible regions.

Security and Availability

In certain communication scenarios like Massive Machine Type Communications (mMTC) and Ultra-Reliable Low Latency Communication (URLLC), it's crucial to have reliable cellular network uptime to avoid any interruption in operations. To ensure that the network is always up and running, space-based systems can provide a backup option that restores mobile services whenever there's an outage in fiber or microwave networks, whether it's planned or unplanned. Non-geostationary satellites can also provide the advantage of high-capacity services for specific, localized areas that require low-latency connections, which is especially important for mission-critical applications.

Broadcast and Multicast Streams

Satellite backhaul can be used for broadcasting and multicasting multimedia content, which are key enablers of the 5G use cases Enhanced Mobile Broadband (eMBB), mMTC, and Ultra-Reliable Low-Latency Communication (URLLC). Satellites' multicast capabilities make them a key use case for Content Delivery Networks (CDNs). CDNs optimize the service experience for consumers, particularly in video streaming and gaming, by bringing content closer to the edge of a network. CSPs can also more efficiently scale services and network capacity using CDNs. Satellites are especially advantageous in distributing content and media streaming in remote rural areas that lack fiber connectivity.

Trade-Offs between Wireless, Fixed, and Satellite Backhaul Deployments

Requirements for Satellite Backhaul Equipment

Satellite backhaul excels in areas where terrestrial technologies cannot provide the necessary backhaul links or hops. To meet demand-side requirements, mobile operators have deemed the following satellite backhaul equipment requirements as crucial to optimal outcomes:

Viable Capacity

When setting up the satellite backhaul links, it's important to have enough capacity in the backhaul links between the ground and the satellite. The amount of capacity will be a function of the wholesale fee the CSP is paying for an aggregate package of data for a collection of cell sites on a monthly basis. As satellite constellations evolve and innovate, the data throughput accessible to the cell site and, thereafter, to each end user is improving.

Reliability

Backhaul equipment, notably ground terminal installations, must be ultra-reliable, even in challenging environments. There’s been some worry in the telecoms industry regarding ground terminals that require moving antennas for Medium Earth Orbit (MEO) and Low Earth Orbit (LEO) installations. These concerns are due to the lack of economies of scale for phased arrays so far. Conversely, Geosynchronous Orbit (GEO) Very-Small-Aperture Terminals (VSATs) are a well-established technology and commonplace in CSPs’ satellite backhaul for mission- and life-critical applications. In 2022, GEO links accounted for 87% of satellite backhaul links and by 2030, that percentage will only dwindle down to 79%.

Cost

One of the most significant challenges surrounding satellite backhaul has been the cost of bandwidth. This was especially true when Single Channel Per Carrier (SCPC) was the only option to choose from in the Satellite Communications (SatCom) market, stipulating that each cell site leverages a full transponder channel. Time Division Multiple Access (TDMA) and indeed, newer multiplexing schemes, have increased the overall capacity per channel and, therefore, reduced the cost per bit per hertz per user.

Latency

Voice communication is relatively latency susceptible. Voice communication via GEO satellite is viable, but due to the 600 Milliseconds (ms) to 800 ms, latency may be noticeable. Where the data traffic consists of video, web pages, and instant messages, latency is not as important. However, critical response applications and a number of 5G Internet of Things (IOT) applications may require latencies below 50 ms or even lower. LEO satellite can support latencies of ~50 ms. Satellite service providers are starting to arrange hybrid constellations that mix LEO and GEO satellites and accentuate the benefits of both platforms.

These satellite backhaul requirements are not set in stone; they’re continuously being improved upon as new constellations, novel technologies, and ground terminals are introduced to the SatCom market. There are also new LEO concepts, such as phased arrays, that are still being harnessed by the industry and could benefit ground terminal deployments for satellite communications.

Satellite Is Just One Piece of the Puzzle for Cellular Backhaul

It's important to understand that satellite backhaul is not going to replace fixed telco and wireless backhaul solutions. Instead, it should be seen as a complementary technology that enables CSPs to widen their cellular network coverage in rural regions that are challenging to cater to. Satellite backhaul also ensures that mission- and life-critical (emergency services) applications are equipped with a reliable backup option when experiencing a fiber/microwave-based cellular network outage.

Satellite backhaul is another essential tool in the box for CSPs. Operators that incorporate satellite as an additional option for cellular backhaul when planning network coverage will be better positioned to expeditiously deploy scalable, reliable, and cost-effective backhaul links for rural communications. This also applies to short-term data traffic hotspots, such as sporting or entertainment venues, or in the event of a crisis or natural catastrophe. Consequently, these mobile operators can expand network coverage and connectivity to all customers and uncovered land areas, despite geographic barriers.

For a more extensive overview of satellite communications’ role in cellular backhaul, grab ABI Research’s Satellite Backhaul: Maximizing Cellular Communications whitepaper. This content is part of the company’s Satellite Communications Research Service.