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I recently held a workshop on international expansion for a Finnish software company. And as a white, middle-aged male, I hold it self-evident that my opinions (oops, I meant to say evidence-based insights) carry such universal truths that they should be shared with a larger audience. Finland is fortunate to be blessed with a lively...

International expansion for software firms – what do successful families have in common

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Don’t shy away from intuition in strategic decision-making 

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Most people in the telecommunications industry are aware that a shift is happening in the satellite communication infrastructure market. Rules of thumb and decade-old paradigms are being disregarded by bold entrepreneurs whose focus is on the long term with seemingly no concern for short and mid-term profitability. Their vision extends beyond this world, literally, with Earth communications only a first step towards funding a communications infrastructure on the Moon and Mars.  
This seems far out of the business reality of most of us in the telecom industry. It should not. These entrepreneurs have an impressive track record of success with their undertakings. In the meantime, the first phases of those plans are already becoming tangible with a blanketing of the Earth with up to hundreds of Mbps connectivity services downlink and tens Mbps uplink from Low Earth Orbit (LEO).  
The inflexion point is characterised by the type of entrepreneurs entering the market and their fame – who does not know Elon Musk and Jeff Bezos? –, by how they poured billions into new satellite and space ventures – an order of magnitude increases to what we were used to in the satellite industry – and by the sudden rise they achieved in general awareness for satellite communications – perceived as a niche market for decades until now. 
The main constellations lining up for success include Space-X’s StarLink, Amazon’s Kuiper, Telesat’s Lightspeed, and OneWeb. One can say that it started more than 10 years ago with the first successful investment into broadband in Medium Earth Orbit (MEO) by O3b – a company named after “the Other three billion” people who lack access to connectivity mostly in emerging countries and also elsewhere in so-called white spots – but the effect on the market has been materialising only since recently. 
Software Defined Success 
There are several reasons. First, we have seen the rapid evolution of the launch industry, resulting in more competitive and less CAPEX intensive access to space for satellite thereby enabling new satellite concepts. 
Second, digitisation of payloads and software defined radio made satcom more competitive and complementary with terrestrial communications: Satellite payload are becoming extensively digital with advancements in flexibility, reconfigurability, frequency management, power, and coverage. This, combined with easier access to space, means that over the next 6 years we are likely to see more than 60 Tbps deployed over 8,000 satellites, 94% of this capacity in MEO / LEO – compare that with the 2 Tbps of capacity achieved after 40 years of evolution with less than 1,000 satellites in orbit so far. Yet the US regulators received applications for more than 38,000 satellites, as part of a land grab of spectrum. Imagine if each of these would be 1 Tbps in capacity like the latest ViaSat birds. Compare this with 280 Exabytes per month as reported by Statista for 2022, or about 25,000 Tbps average instantaneous traffic. To be sure, satellite will not replace fibre which will continue to be the prime mover of traffic for the foreseeable future, yet satellite will increasingly be relevant as a complement. 
Convergence, convergence… 
The third driver is the evolution of satellite business models in the context of convergence across wider eco-systems. Do not expect space entrepreneurs to be less successful in leveraging scale and creating new eco-systems than they have been so far: they now aim to capitalise on their dominant positions in other domains (Tesla/Automotive, Space X/Launchers, Amazon/Retail, Microsoft/Software) by bridging eco-systems and leveraging their large user base: e.g., access to Cloud from anywhere, Web retail combined with Broadband access. Food for thought for telecom operators aiming for mobility markets. 
Telecom operators have indeed started partnering with LEO operators: AT&amp;T with OneWeb, Verizon with Kuiper, Vodafone with StarLink. The new LEO entrants are threatening incumbent satellite operators that have not invested into NGSO. The jury is still out whether the new LEO operators will be successful with their go-to-market. In the meantime, Eutelsat rushed to buy OneWeb, SES and Intelsat are discussing M&amp;A… Consolidation is in the air. 
In addition, the satellite industry is looking towards the integration of satellite ground networks and 5G networks, and several initiatives of “5G native” satellites are being trialled – Start-ups AST SpaceMobile and Lynk Global are developing constellations that aim to provide 5G / 4G / LTE connectivity services directly to smartphones via cell towers in space, initially narrowband and ultimately high-speed services. 
Funding no more? 
Space venture funding has evolved (Corporate Venture funds, Special Purpose Acquisition Companies, Gov. Innovation funds and programmes, etc.), with investments in space companies reaching $9.8 bn in 2020 followed by a record $14.5 bn in 2021. Many of these deals were at high EBITDA multiples, illustrating investors’ willingness to take higher risks for high return. Has there been too much investment? Rising inflation and higher interest rates may now lead investors to focus more on cash flow generation. 
The linking pin 
Currently the missing pin to the success of these new satellite constellations is the terminal. MEO and LEO constellations require flat panel electronically steerable antennas which are still under development. So far, the first Starlink terminals are inadequate for any kind of professional use case and only suitable for the low-end consumer market. The real breakthrough will come when high-performance, multi-orbit, multi-link terminals hit the market in 2023 such as All.Space terminals. 
There are still open questions around the sustainability of such LEO constellations, which must be regularly replenished, with questionable operational efficiency. Nevertheless, if one measures the opportunity to these bold entrepreneurs’ past success, then it is time for traditional telecom players to assess their ecosystem role and strategic opportunities in the fast-evolving telecommunications landscape.

The Inflexion Point

The Inflexion Point: Why telecom operators and vendors should take note of the inflexion point in the satellite communications industry

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Strategy renewal provides a great opportunity for assessing your culture

Lessons from Companies that Achieve Growth after Cost Programs

Unlocking International Markets – watch your steps

IKEA’s Lars-Johan Jarnheimer: “In the world of algorithms and AI, it is crucial to truly stay close to the customer”

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Strategy renewal provides a great opportunity for assessing your culture

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