Proprietary versus Standards-Based Satellite Communication Protocols: Where Is the Satellite IoT Market Headed?

One of the largest developments in the satellite Internet of Things (IoT) space is the recent termination of an agreement between chipset manufacturer Qualcomm and satellite IoT operator Iridium. The original deal between the companies was to enable Android smartphones that were powered by Qualcomm’s Snapdragon chipset to have access to satellite-based messaging and emergency services via the Iridium satellite network. However, despite developing and demonstrating the technology, Qualcomm decided not to proceed with the agreement, as there was an inclination among smartphone Original Equipment Manufacturers (OEMs) for standards-based satellite connectivity solutions instead of proprietary ones as offered by Iridium.

Beyond this event, other new entrants to the space industry (otherwise referred to as the “New Space”) have also announced large partnerships with leading Communication Service Providers (CSPs) and IoT solution providers. In November 2023, OQ Technology signed a Memorandum of Understanding (MoU) with O2 Telefónica to roll out a global 5G NB-IoT satellite solution. Separately, Sateliot and Telefónica have also successfully tested seamless 5G NB-IoT connectivity for IoT devices across both terrestrial and satellite networks in July 2023.

Traditionally, satellite IoT operators used proprietary satellite communication protocols to establish connections with IoT devices. This required installing specialized chipsets in IoT devices to enable satellite connectivity. However, the latest developments from The 3rd Generation Partnership Project (3GPP) and the LoRa Alliance have looked to extend previously terrestrial-based communication standards to satellite networks. For example, the wireless 3GPP Release 17 specification introduces two new standards for satellite communication, also known as Non-Terrestrial Networks (NTNs). One of these two new standards—IoT-NTN—sets out the specifications surrounding the use of NB-IoT and LTE-M standards to support NTNs. Separately, the Long-Range Frequency Hopping Spread Spectrum (LR-FHSS) parameter was also added to the LoRaWAN standard to support Direct-to-Satellite (DTS) IoT connectivity applications by increasing the efficiency and reliability of satellite communications, while also addressing concerns regarding interference and Doppler shift effects.

The introduction of standards-based satellite protocols is seen as a game changer for the industry as satellite ecosystem players can now take advantage of chipsets that support both terrestrial mobile and NTN networks. This enables them to not only expand the reach of their solution to more IoT devices (including mobile phones), but to also leverage the large production volume and economies of scale to ensure lower cost of devices.

Given the changing technological landscape, satellite operators will need to continuously evolve with the times or risk falling behind. ABI Research has distilled some of our key recommendations to the different players in the satellite IoT ecosystem:

• Traditional Satellite Companies: While these companies already have a stable business operation in place, they should not rest on their laurels given the rapid pace of technological change. Even for established companies such as Globalstar, which has established large exclusive satellite connectivity agreements with the likes of Apple for its proprietary solution, not investing in standards-based technologies could limit potential revenue growth for the company in the future. It is critical that these companies continue to invest in the latest standards-based technologies to build a competitive portfolio of solutions and increase the resiliency of their businesses. For example, it was observed that other traditional satellite IoT incumbents such as Iridium have since announced their interest in NB-IoT standards-based technology.
• New Space Companies: For these companies, establishing strong partnerships with ecosystem players, such as CSPs and IoT solution providers, is a critical step to help them make inroads into the global IoT market. By leveraging established IoT platforms, such as those offered by Deutsche Telekom, Telefónica, IoT provider t42, etc., aspiring New Space IoT companies can quickly ramp up service offerings. In fact, with this strategy in place, Sateliot has reported an impressive pipeline of projects and deals.
• Chipset Manufacturers: Many chipset manufacturers are launching or have already launched 5G IoT-NTN chipsets to support satellite IoT applications. These companies include MediaTek, Qualcomm, and, most recently, Sony Semicon. It appears that the support for IoT-NTN capabilities is no longer just a good-to-have, but has instead become a critical component for communication chipsets moving forward. In this regard, chipset manufacturers will need to continuously innovate and enhance their chipsets’ NTN capabilities to differentiate themselves from the rest of the field.

Despite the market push for standards-based satellite IoT protocols, there remain two main categories of standards—IoT-NTN and LoRaWAN. Without alignment between these two technologies, the satellite IoT market will continue to remain fragmented, with solution providers having to prioritize one technology standard over the other. However, this fragmentation has also provided new opportunities for innovative IoT solution companies such as Wyld Networks to develop solutions to support both 5G NB-IoT and LoRaWAN satellite IoT capabilities.

To conclude, with large space companies such as SpaceX also looking to enter the satellite IoT market in the next few years, both traditional incumbent satellite players and aspiring New Space IoT players will need to continuously innovate and develop their own unique value propositions to maintain their foothold in this increasingly competitive industry.