Telstra might regret having signed a commercial deal with London-based OneWeb as this company has now become a pawn in the war between Russia and Ukraine.

Telstra agreed to host two OneWeb gateway Earth stations in Australia, one in the west and one in the north, which would also cover the APAC region, with a third Earth station currently under discussion for the east coast.

To unravel the complexity of the current situation, we need to go back in history a bit. In October 2020, the by-that-time bankrupt OneWeb company—which was owned by the SES satellite company in Luxembourg—was acquired by the UK Government and the Bharti Group. OneWeb evolved from an initiative taken in 2013 called the Other 3 billion (O3B) aimed at using satellites to bring services to Africa and elsewhere. OneWeb uses Russian rockets and the Russian launch site at Baikonur in Kazakhstan.

Russia has demanded that the UK Government resign as a shareholder because of its boycotts against Russia. In the meantime, the Russians have suspended all the OneWeb launches.

The company still has to launch 220 satellites to complete its service. The Russian boycott indicates that at least some of these are at their base in Kazakhstan. It is unclear when and how the company can reschedule these launches from alternative launch sites.

Telstra is not the only Australian company that has become a victim of this war. OneWeb signed a similar agreement with Vocus in 2020”>Vocus in 2020 and it also has a distribution agreement with regional telecommunications provider Field Solutions. OneWeb is facing problems as it relies on Russian launches for its satellite services. In 2020, we also discussed the role of OneWeb in the overall scheme of low Earth orbit (LEO) activities.

The Russian war against Ukraine also shows the vulnerability of satellites in general. It has already warned against interfering with its satellite systems. It is clear that in a situation of war, satellites could become targets.

Up until now, satellites were seen as an important element to the overall telecoms strategy of both the industry and the countries involved. In that context, we are seeing increased commercial activity in this sector.

Telstra, for example, is looking at integrating these LEO facilities into its telecommunications strategy for regional Australia.

Last month, Telstra also confirmed it had struck a 16.5-year deal, spanning the approximate operational lifetime of a satellite, with U.S. satellite broadband company Viasat. It will be laying the ground infrastructure and fiber network to support Viasat.

The services will compete with Elon Musk’s satellite internet array, Starlink, which is already available in parts of NSW, Victoria and South Australia. With a faltering NBN, especially in regional areas, a lot of people in country areas have been watching the developments of LEO satellites with interest. It is clear that also in Australia, the LEO competition is starting to heat up. It will be interesting to see what NBN Co will do. I also expect nanoelements from them in the near future.

In Australia, there are already an estimated 500+ people using the beta service of Starlink. Customers pay US$500 (AU$687) for a terminal and US$99 (AU$137) per month. The feedback regarding the quality of the service from these users has been very promising.

The service is superior to the NBN’s satellite service, offering up to six times faster speeds and including unlimited data. It is also superior to the NBN’s fixed-wireless service. As mentioned before, NBN is not sitting still and is also improving its services. For the time being, however, and certainly in relation to satellite services, it offers significantly better speeds.

The company has indicated that it will now start taking pre-orders for Starlink Premium, aimed at businesses and high-demand users.

The premium service is expected to provide download speeds of 150 to 500 Mbps and latency of 20 to 40 milliseconds (ms), compared to the 50 to 250 Mbps (20 to 40 ms latency) for regular service.

On my trips through regional Australia, I have come across many (agriculture) businesses that are most certainly interested in such a high-quality service. The high level of sophistication of these organisations and their need for widespread IoT (Internet of Things) connectivity throughout their farms through sensors and other devices is crying out for better quality broadband.

Business users with such requirements are prepared to pay a premium for the service as they can easily “earn this back” through increased productivity, efficiency and effectiveness of their business operations. The user terminal for this service costs US$2,500 (AU$3,436), and the service itself costs US$500 per month.

The terminal offers double the antenna capability of Starlink. This is twice the area of the standard phased array, with a broader scan angle—in other words, “grabbing” more satellite signal.

This setup also offers improved performance in extreme weather. Furthermore, the premium service comes with 24-hour, prioritized support.

The service is set to become available later in the year.

To bypass potential national regulation barriers, the signal is provided to resellers and corporate customers through mobile phone towers, airplanes, schools and hospitals. We mentioned a few weeks ago the company Connected Farms which is also using the Starlink services for its customers.

While there is no doubt that these LEO services are extremely useful in regional areas, the question remains if SpaceX can make this an economically viable service? The costs of bringing 40,000 satellites into space are enormous, and there are increased questions about space junk and the damage it can cause. Furthermore, SpaceLink isn’t the only LEO service—others are nipping on Elon Musk’s heels. Can they be more economical and/or more environmentally friendly? Time will tell.

While satellite systems will undoubtedly continue to play a key role in providing global broadband access, it is uncertain what this will look like in five, ten or 20 years. There is still a lot of work to do before the longevity of the current services is guaranteed.

Here is an example of some of the challenges LEOs are facing:

Last month, SpaceX lost up to 40 of the 49 satellites that were launched a week earlier. These were going to be part of the controversial Starlink mega-constellations, but the sun apparently had other plans. A geomagnetic storm hitting Earth the day after launch sent the satellites burning down into the atmosphere.

Geomagnetic storms can be dangerous to electronics due to the increased level of charged particles from the sun. But a secondary effect is at play here. These major space weather events affect the atmosphere, too, altering its density. There is no big change at our altitude, but when you are hundreds of kilometers above the ground, counting on an extremely thin atmosphere, this is a game-changer.

Elon Musk has rushed Starlink terminals to Ukraine to assist the resistance against the Russian invasion. At the same time, the company was able to adjust its signals and instantly, the service worked in Ukraine.