Satellite Wars

SpaceX Starlink satellites, Amazon new Kuiper and OneWeb are competing for the low latency low-earth satellite market. This market will be worth tens of billions of dollars per year.

Amazon will be launching 3,236 satellites into low Earth orbit. They will be at an orbital altitude of 367 miles to 391-miles. This will be an Amazon project and not a Jeff Bezos Blue Origin project.

There are plans from many companies and countries for over 20,000 satellites to be placed into low earth orbit.

SpaceX is trying to raise another $500 million for its Starlink satellites. They should be placing near production ready prototypes starting next month. There will be about 75 satellites in prototype configuration of the planned 4425 satellites. SpaceX will likely have to raise several billion more. They could start an operating satellite business with an initial 800 satellite constellation and could provide coverage for the northern hemisphere with 1600 satellites. SpaceX had filed for a license for another 7518 satellites using the V band.

The Starlink satellites will have xenon ion drives. SpaceX claims its new low earth orbit satellites will completely burn up on re-entry.

The other major competitor is OneWeb. OneWeb placed six satellites into orbit in February. They have raised around $3 billion for a 648 satellite constellation. The satellites will operate in circular low Earth orbit, at approximately 750 miles (1,200 km) altitude transmitting and receiving in the Ku band of the radio frequency spectrum. They could expand later with another 1980 satellites.

OneWeb plans to launch 32 satellites every 3 to 4 weeks starting in the second half of 2019.

Boeing and Samsung also talked about large satellite networks but have not made the necessary test launches or investments.

The Tens of Billion Per Year Prize

Financial centers and exchanges like New York and Chicago are willing to pay for low latency communication. It is worth New York and Chicago $100 million per year to put a premium microwave data connection between the two cities. This shaves 5% of the latency time from pricing updates and order placement. This has a lot of value when a big stock starts making a rapid move up or down.

Microwave transmitter for low latency communication

There would be 190 combinations of pairs of the top 20 financial cities. There are 435 combinations of pairs of the top 30 financial cities. If the top $100 million per year was paid by the top 20 cities, then this would be $19 billion per year. If the premium internet pairing for the connections to 21 to 30 was worth $10 million per year then this would be another $2.45 billion per year. Even with a half-price discount, the total would still be $10 billion per year.

The SpaceX Starlink or low-earth orbit competitors could save 30-50% of the latency time. This is because the speed of light is almost twice as fast in space as it is in a glass fiber. The value for the Starlink financial latency reduction should be even higher. Let us say it is double the New York to Chicago price. This means the premium pairing of cities is worth over $40 billion per year.

Other industries may pay for premium pairing but there has to be a lot of money involved and value for shaving 30 milliseconds at some time in the year.

This low latency market revenue would be more than double NASA’s annual budget. Direct TV is part of AT&T and makes about $40 billion per year in revenue.

12 thoughts on “Satellite Wars”

  1. “laws against high speed trading”
    Or just a tax which is a tiny fraction of each transaction, insignificant if you hold for days or months, but it adds up for high speed trading.

  2. “I really want to dump Spectrum, or at least see them have some competition. Not only that, I’d rather give Elon my monthly fee to take to Mars with him!”

    My sentiments exactly.

  3. The problem is that at least starlink is not designed for it. it would require an dedicated link between an ground station, one or multiple satellites and down to ground again. This like even if low bandwidth would have to be maintained at all time, you don’t want real routing as it is slow and you need this capability on all satellites.
    For starlink 2 or some of the next networks it would make sense if budget is $40B

  4. The propellent for 4425 satellites would be a lot of Xenon. It’s proportion in the atmosphere is tiny at one part per 11.5 million. If I were Elon, I’d be looking into using the tiny amount of air found in LEO as propellent for station keeping.
    Something occurs to me. What organization could provide the huge number of launches needed to put all these satellites in orbit, quickly, and at a reasonable price, other than SpaceX? Besos has blue origin, but they don’t yet have a single orbital vehicle, compared to SpaceX’s stable of available reusable boosters, and relatively easy/cheap to build upper stages. Any competitors to starlink would be crippled by the much higher cost of launching their hardware, if it could be done in time.
    I hope Starlink for regular users becomes available soon. I really want to dump Spectrum, or at least see them have some competition. Not only that, I’d rather give Elon my monthly fee to take to Mars with him!

  5. I tend to agree; High frequency trading really has no discernible benefit for society. We’d be better off finding a way to discourage it, than wringing out the last few microseconds.

  6. Today is your lucky day.

    It turns out that there is in fact a careful rationing out of orbital locations precisely to prevent the sort of problems that you are concerned about.
    Gravity was a fictional drama, not what actually happens in real life.

    Also, lawyers have been suing people for collisions occurring outside national boundaries for many hundreds of years now. They’ve got it worked out.

  7. If Space is not regulated in some way similar to the finite spectrum of radio waves by an FCC type-type agency, but with international authority, we’re eventually going to have space (small ‘s’) conflicts, collisions and catastrophes like in the movie “Gravity.” Eventually, NEO may become too dangerous for manned craft to pass through, with uncharted debris moving at 17,000mph everywhere. Even airplanes traveling at much lower altitude may be vulnerable to debris that has not completely burned up in reentry yet. And worse, there’ll be no international court to sue in, even if victim’s families or businesses can figure out who to blame for collisions, even deaths. No doubt no company will be eager to take the blame for, say, downing an airplane, or even for colliding with another company’s satellite.
    We live in a wild west time for business; it is irresponsible and dangerous, and unregulated Space could lead to an international incident, even start a war.

  8. What a colossal waste of money!

    High speed trading – correct me if I am wrong – is only a way for players with big pockets to scam players with smaller pockets. That’s it. Trading above second intervals – again, correct me if I am wrong! – doesn’t increase the liquidity of the market, i.e. the availability of funding for companies, nor does it provide more stability of the stock market.

    And before someone says that it’s none of my business, I must point out that anyone saving in the stock market will be shafted by the bigger players. That includes individuals saving for retirement in stocks. And, furthermore, we know that the “scam” must transfer more money from small fish to big fish than what the big ones are paying for the premium speed access, i.e. tens of billions of dollars per year globaly.

    Another depressing point is that I cannot see any real ancillary benefit. What would that be? Playing fortnite accross the globe with 7 ms less latency? Perhaps.. But since gaming companies are not funding satellites, this not high on gamers wish list.

    Just as we have anti trust laws to protect the consumer against monopolies or laws regulating bankruptcy, we should make laws against high speed trading. All trade must be collected in one second, and then carried out in the next second.

  9. I would think the price premiums for low latency financial communications will rapidly dwindle in the face of competition, of which there seems to be plenty. Yet the early premiums are probably why Elon is so hot to get his going asap.

  10. SpaceX will likely have to raise several billion more. They could start an operating satellite business with an initial 800 satellite constellation and could provide coverage for the northern hemisphere with 1600 satellites.

    How do you target a hemisphere with a cloud of satellites that orbit the Earth on multiple inclined orbits. It seems it would cover both hemispheres, no? Or are they referring the capacity needed for the northern and this would mean they would also have the capacity (and coverage) for both?

  11. Good prospects for the low latency satellite Internet providers.

    But this desperation of financial markets and many smaller actors for latency and speed, could probably create a new batch of snake oil salesmen, bringing potential “miraculous” techs (e.g. quantum entanglement, EM wave group speed modulators. flat out time travel) surpassing the speed of light, but only if you participate in the latest round of investment.

    The energy market has a lot of experience in that regard, and people still falls for all kinds of grossly made new energy scams.

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