Satellites Are Taking Off, But Cell Towers Are Sticking Around

By Stephen Keegan, Senior Counsel, Government and Legal Affairs

Sometimes, it is easy to forget just how much mobile data is traveling around us at all times. Year after year, the demands on mobile networks continue to increase exponentially. The bits traveling over the networks themselves, however, are only half of the equation. Equally notable in this growth is the underlying infrastructure that enables consumers to actually utilize mobile networks. The backbone of this impressive infrastructure is the often-unsung hero: macro towers. These structures, standing on their own or integrated into the background, dot the landscape and provide the cellular networks consumers rely on. Macro towers and other “neutral host” infrastructure is the cornerstone of mobile networks because they are carefully sited to balance the needs of service providers to cover a wide area and be close to end users, ensuring fast and reliable performance. 

Notwithstanding the advancement of satellite technology—what some have referred to as “cell towers in the sky”—the need for macro towers is not going away. While there are promising developments in the use of satellite infrastructure in space, these solutions are still supplemental to the core of the network, which relies primarily on macro towers and other terrestrial infrastructure. Indeed, even as the number of new devices has begun to flatten, the demand on networks continues to rise—and network operators will continue to look at terrestrial-based solutions as the best way to keep up with this demand. This is also why telecommunications infrastructure Real Estate Investment Trusts (REITs) consistently deliver impressive returns for investors.   

Providing cellular service from satellites is sometimes seen as the next frontier of wireless communications. Satellites have the ability to provide coverage in rugged areas that are difficult to deploy wireline or even traditional wireless solutions in and will likely play an important role in future communications networks. However, this technology is still relatively new and subject to several technical limitations that will prevent it from replacing terrestrial fixed and mobile networks for the vast majority of traffic.   

For most applications, terrestrial-based networks still provide the appropriate balance of wide-area coverage with low latency and the capacity to handle large volumes of traffic at any given time. These networks will continue to excel as demand increases due to the significantly lower cost and time required to deploy upgrades on terrestrial infrastructure compared to launching additional satellites—this also enables new entrants into the market to increase competition. Given these various considerations, terrestrial networks will continue to be able to serve more consumers and provide service at a lower cost to the end user.   

In addition to cost and time, there are other factors that will ensure the continued reliance on macro towers for wireless communications. The current biggest tension in wireless-satellite communications is the trade-off between wide-area coverage and reducing latency. Generally, satellites are deployed in two categories differentiated by where the satellite’s orbit is, either Geosynchronous (GSO) or Low-Earth Orbit (LEO). GSO’s are deployed relatively far above earth’s atmosphere and can provide coverage to broad swaths of the planet; as few as three GSO satellites could “see” every point on the globe. However, since the infrastructure is deployed thousands of miles from the user, there can be a noticeable delay in the time it takes for data packets to travel across the network—often known as “lag”—which can be exacerbated as more users compete for scarce network capacity.   

Some providers have tried to counteract this latency issue by deploying “constellations” of smaller satellites closer to the end users—such as LEOs. While LEOs provide better latency, the networks require significantly more assets to provide coverage. Further, while the constellation may provide additional redundancy, it also requires significantly more resources to track and maintain the many assets in orbit at any given time. 

Outside of these technical limitations, the regulatory environment for satellites, particularly in using them for cellular mobile networks, is relatively new and will need to mature further to fully utilize this technology. The primary limitations faced by satellite providers today is a lack of dedicated spectrum for these applications. While all service providers are feeling the crunch on available spectrum, particularly with FCC auction authority still languishing, satellite-based providers will be further challenged as many existing satellite allocations are not coordinated for the dynamic needs of mobile communications. While the FCC has taken some initial steps in considering rules to allocate more spectrum and ease satellite operations in existing terrestrial allocations, this is a fraction of what would be needed for a provider to deliver nationwide coverage solely from space. 

An additional hurdle that is coming to light for cellular infrastructure in space is the rapid crowding of where these satellites can be deployed. With the rise in satellite-based solutions, the real estate that these assets occupy has become increasingly busy, requiring increased coordination between providers and creating new risks for satellite operators. While terrestrial network providers are far from immune to having assets removed or damaged, the time and cost associated with repairs or modifications to space-based assets is significantly higher.  

The communications infrastructure ecosystem continues to innovate in new and exciting ways, but macro towers remain the core infrastructure the network depends on. Regulators should continue to encourage competition from various technologies by streamlining rules for infrastructure permitting, reducing barriers to entry, and continuing to make licensed spectrum available for commercial wireless service. While many benefits lie ahead as satellite and other emerging technologies mature, macro towers will continue to stand tall as the cornerstone of wireless communications networks.