Paradigm Shift in the Satellite Communications Sector and its Implications for Low-Earth Orbit Communications

The satellite communications industry is in the midst of a paradigm shift, as the cost of building infrastructure for low-Earth orbit (LEO) satellites, which had previously served as a barrier to entry in the satellite communications services market, is falling. Such satellites provide relatively good communication quality with low latency, enabling their use in a range of fields. Accordingly, the global market for satellite communications and data services is expected to surge in scale. Private companies backed by massive capital such as SpaceX, OneWeb, and Amazon are entering the satellite communications market, which had formerly been led by the public sector, along with venture investment and M&As. These LEO companies have vertically integrated all aspects of satellite communications, from satellite production to launch, giving them a relative competitive advantage over conventional companies in the sector. As competition in this field grows, governments around the world are pursuing large-scale investment to secure a technological advantage in the sector. Korea has been conducting LEO satellite R&D since the launch of its indigenous Nuri rocket, designing a roadmap for R&D and fostering skilled labor in the field. As a relative laggard in the sector, the country must seize the opportunity presented by the ongoing paradigm shift to focus investment on LEO satellite communications and leadership in technological standardization to gain an advantage and raise the competitiveness of Korean satellite communications. As a space-based Internet using LEO satellite communications can serve world markets, support must go to development of business models of first-mover satellite communications services to tap new markets.