5 minute read 18 Mar 2021
Satellite orbiting the earth

How to combat the UK digital divide with satellite connectivity

Authors
Praveen Shankar

UK&I Technology, Media and Telecommunications Market Leader, Ernst & Young LLP

Broad experience in transformation and operations. Driving the 5G agenda. Focused on tackling the most pressing and complex business and technology challenges in the industry.

Adrian Baschnonga

EY Global Telecommunications Lead Analyst

Lead Analyst with deep sector knowledge in technology, media and telecom, gained in professional services and business intelligence environments.

Matthew Robinson

EY Global Associate Partner, Business Operations Lead, Technology, Media and Telecommunications

Transforming enterprise business models and connecting society using 5G and future network technologies. Closing the digital divide to build a better working world.

5 minute read 18 Mar 2021

Increased use of satellite connectivity can help bridge the digital gap, increasing the reach and resilience of connectivity. 

In brief:

  • A new generation of satellites have the potential to increase digital inclusion and transform the world of connectivity.
  • EY consumer and SME research insights find that satellite connectivity is a credible alternative for demanding UK customers.
  • Satellite could come to the forefront to drive growth in the IoT market.

Improvements to the UK’s digital infrastructure have never been more important. As businesses and consumers continue to adapt to the COVID-19 pandemic, and the UK enters a new era outside the EU, high-quality broadband connectivity is vital to economic growth and social cohesion. Gigabit Britain is already appearing, supported by ongoing modernisation of fixed and mobile networks.

This article explores how satellite connectivity can accelerate this transformation and summarises the six key actions operators can take to improve their value propositions and unlock long-term value.

1. Harness satellite as a tool to increase digital inclusion

Many UK customers view satellite as a viable primary connection

EY customer research shows that both consumers and small to medium enterprises (SMEs) are responsive to satellite broadband offers. 40% of households would be interested in taking a satellite package if it offered greater reliability compared with what they already have. This is startling, since satellite is not a mainstream connectivity option for consumers.

Similarly, 33% of SMEs nationwide would be open to considering satellite broadband as a primary connection — if full-fibre broadband was not available at their business site. This consistency of interest across consumers and enterprises underlines the breadth of the addressable market for satellite services. While full-fibre and 5G mobile are fuelling a new generation of digital infrastructure, the role of satellite cannot be ignored.

UK customer receptivity to satellite broadband

2. Make the most of demand for resilient connectivity and business continuity

Satellite has key role to play in combating network outages

Back-up connectivity is much more than a nice-to-have. 30% of households would be prepared to pay more for their broadband package if it offered back-up connectivity in the case of network outages.

This appetite comes at a time when resilient connectivity is more important than ever: our consumer research also tells us that households tend to value reliable connectivity over the speed of the connection. Meanwhile, 31% of SMEs are keen to explore satellite broadband as a back-up connection in the case of network outages. Ultimately, satellite connectivity can play a key role in combating the downsides of network outages wherever customers are located.

UK SME interest in satellite as a back-up connectivity option

3. Supercharge the Internet of Things (IoT) using satellite

There are specific IoT use cases where satellite can come to the forefront to drive growth

In our most recent survey of large UK enterprises, 60% across industries were either currently investing or planning to invest in IoT. At present, cellular technologies – from 5G to low-power wide-area (LPWA) networks — and fixed-line dominate the IoT landscape. Yet distinct use cases such from pipeline gas monitoring to agribusiness solutions and marine traffic control could all benefit from the ubiquitous connectivity offered through satellites.

Considering satellite’s potential role in the IoT technology mix should be top of mind for fixed-line and mobile operators looking to in-fill coverage gaps and unlock new use cases. For satellite operators themselves, IoT use cases provide scope to develop new relationships with industry customers while deepening existing relationships in maritime and aviation segments. Opportunities to develop IoT platforms with analytics capabilities should be front of mind.

UK large enterprise investment in IoT

4. Take advantage of satellite’s latest technology benefits

LEO capabilities provide a radical improvement in performance

The new breed of Low Earth Orbit (LEO) satellites offer significant advantages over traditional satellite communications, offering faster speeds and lower latency, coupled with lower costs.

Mobile backhaul is an important example: LEO offers better performance than geosynchronous (GEO) links, without recourse to compression on transmission control protocol (TCP) acceleration, for example. As a result, LEO satellites can substantially improve the economics of wide area 4G and 5G coverage.

For mobile operators, this presents a compelling opportunity to work with satellite operators to bring down mobile network opex and capex, while maximising infrastructure coverage.

Indicative latency comparison of satellite by constellation type

5. Reimagine your partnerships to make the most of the satellite opportunity

New alliances can help service providers make the most of the satellite opportunity

Dialogue, discussion and collaboration between satellite connectivity providers and their fixed and mobile counterparts can help meet a growing number of strategic imperatives — from increasing customer stickiness to unlocking new IoT propositions and lowering the cost of rural network rollout. There is also plenty of scope for direct collaboration with industry verticals themselves in order to create new IoT use cases.

Priority inorganic growth drivers for global communications providers
EY Satellite web chart4

6. Keep the value proposition simple and persuasive

Positive customer perceptions are critical

The reach of satellite connectivity is unparalleled — yet many end-users still lack awareness of what it can provide, not only in terms of ‘always on’ availability, but in terms of costs and customer service too.

As service providers look to bring satellite connectivity options into their service portfolios, a relentless focus on customer experience is essential. Easy-to-use products and services, clear and compelling pricing, and simple installation processes are all vital, particularly if satellite options are made available through a partner ecosystem or as part of an integrated bundle of services. Ultimately, the customer journey — for consumer and business alike — needs to be simple and frictionless if satellite services are to maximise the critical role they can play.

Customer attitudes to telecoms packages and service providers

EY Satellite Connectivity

43%

of customers say ‘easy to understand pricing’ is a priority when selecting a broadband provider.

EY Satellite Connectivity

33%

state communications services are difficult to understand and choosing a suitable package is hard.

Summary

The new generation of satellites has the ability to transform the world of connectivity, from  opening up brand new use cases to making the economics of terrestrial networks more viable. Now is the time to reimagine the world of satellite, revaluate it’s place in the connectivity ecosystem and focus on making targeted solutions a reality.

About this article

Authors
Praveen Shankar

UK&I Technology, Media and Telecommunications Market Leader, Ernst & Young LLP

Broad experience in transformation and operations. Driving the 5G agenda. Focused on tackling the most pressing and complex business and technology challenges in the industry.

Adrian Baschnonga

EY Global Telecommunications Lead Analyst

Lead Analyst with deep sector knowledge in technology, media and telecom, gained in professional services and business intelligence environments.

Matthew Robinson

EY Global Associate Partner, Business Operations Lead, Technology, Media and Telecommunications

Transforming enterprise business models and connecting society using 5G and future network technologies. Closing the digital divide to build a better working world.