System entry: a new player is entering the satellite Internet market

Competition is emerging in the Russian personal satellite Internet market — Sputnix, a member of AFK Sistema, has asked the authorities to allocate frequencies to it to develop a system that allows it to connect to the Internet via satellite directly from smartphones. At the same time, the Bureau 1440 company is already engaged in the satellite network access project in the Russian Federation. The competition will benefit and allow for faster and cheaper Internet access to remote settlements, highways and tourist routes, experts say. Several such projects are already developing on the global market, including Elon Musk's Starlink, and the entry of Russian companies into it would be appropriate, they add.

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During December, the State Commission on Radio Frequencies (GCRF) will consider allocating frequencies to Sputnix (part of AFK Sistema) for the 5G hybrid cellular-satellite communications network. This follows from the materials of the interdepartmental commission, which were reviewed by Izvestia. They refer to the frequencies 1610-1621 MHz (Earth–Space communication), 2483.8–2494.8 MHz (space–Earth), 10700-11700 MHz, 14000-14495 MHz and other ranges. Such frequencies can indeed be used for a network that includes portable subscriber devices, including smartphones, one of the radio frequency distribution specialists told Izvestia.

The Sputnix group of companies confirmed to Izvestia that they had submitted an application for frequency allocation in connection with the development of a promising D2C satellite constellation.

— The proposed frequencies are suitable for this communication system. At the same time, it is premature to talk about specific launch dates: investments are primarily aimed at development work and technology testing," Sputnix said.

Both competition and synergy in this area are possible, as different systems can complement each other, they added.

The Ministry of Finance confirmed to Izvestia that the Sputnix company's application is scheduled to be considered at a meeting of the SCRC in December. So far, we are talking about allocating spectrum only for technology development, while the issue of allocating frequencies for commercial use should be decided when a technical platform is created and a draft of the proposed grouping is formed, the ministry noted.

— This is a promising area. The creation of a hybrid communications network based on the domestic low-orbit satellite constellation is provided for by the Development Strategy of the communications industry of the Russian Federation for the period up to 2035. Competition in the field of space groups will have a positive impact on the industry, as it will stimulate technological innovation and contribute to improving the quality of services provided, the Ministry of Finance added.

AFK Sistema is trying to stake out the frequencies at which such projects are going to be developed all over the world, said Sergey Pekhterev, a shareholder of AltegroSky Group.

— Satellite communication from a smartphone is interesting, but it is still difficult to judge the commercial effectiveness of such initiatives. The main problem for satellite operators is that they must have a partner, a mobile operator, since the entire frequency resource on earth has already been dismantled by cellular operators," he said.

Sistema's interest in frequencies for a low—orbit satellite constellation providing high-speed access (Elon Musk's Starlink is the most famous project of its kind in the world) suggests that competition is emerging in the emerging Russian space Internet market, market participants believe.

They draw attention to the fact that at the December meeting of the SCRC, the allocation of frequencies for the Rassvet low-orbit satellite communications system, which is being developed by Bureau 1440, will also be considered. This project has already received approval at the state level. In particular, the federal project "Infrastructure for access to the Internet Information and Telecommunications network" provides that more than 17 billion rubles can be allocated from the federal budget for the creation of a satellite constellation. It is also planned to finance the launches of these satellites and preferential loans for Bureau 1440.

— The completion of the formation of the low-orbit Bureau 1440 group and the launch of a commercial service are scheduled for 2027. This year, we have started mass production of spacecraft and components," the company told Izvestia. — Our partnership with landline operators will allow data transmission via satellite network from any smartphone.

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Market participants consider increased competition in this segment to be natural. In Russia, there is a request for cellular-satellite communications, including from the cellular operators themselves, they explain. Given that subscribers and types of services may vary, the creation of several low-orbit groupings may make sense, a source close to one of them believes.

For example, in the summer of this year, MTS tested the NTN cellular-satellite communication technology in D2C mode. According to the company's representative, MTS is considering various cooperation options for the further implementation of the project. Taking into account the geography of Russia and the low population density, 5G NTN-D2C technology is able to provide the entire territory of the country with continuous coverage of mobile communications services, the company believes.

One of the main advantages of this technology is that users will not need special subscriber terminals — modern smartphone models will be able to connect to the satellite signal where coverage of ground base stations is lost, MTS added.

"We welcome competition in the market and are considering all possibilities to provide communication to our customers," VimpelCom noted.

Megafon is closely monitoring the development of low—orbit satellite projects in Russia, but it is premature to talk about specific formats of interaction - we should wait for the results of work on projects, the company said.

Who needs a hybrid connection

Direct communication services between low—orbit satellites and a smartphone are the hottest topic in the global telecom market, said Leonid Konik, a partner at ComNews Research. Each such satellite is essentially a base station (BS) in space, providing coverage where ground-based BS will not appear soon or never. This creates new opportunities for subscribers and for fundamentally new services, such as permanently connected self-driving cars.

Leonid Konik, the global developer of 3GPP, released the 5G NTN (non-terrestrial network, a standard for communication between mobile devices and satellites) a few years ago. Major mobile operators from around the world note that in practice, the smartphone owner will receive from a satellite using 5G NTN technology a speed characteristic of a cellular network of not the fifth or even the fourth generation, but 3G — about 3-5 Mbit/s.

"But in the middle of a swamp, high in the mountains or in the taiga, even such speed is a luxury," the expert believes.

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What will this give to signallers, users, and authorities?

The topic of hybrid satellite-cellular technologies is certainly interesting for T2 as well — they allow to expand the user service area where there is no traditional mobile communication, said Daria Kolesnikova, a representative of the operator. According to the communications industry development strategy, the level of grouping of low-orbit satellites sufficient for the actual use of the technology will be achieved by 2030, she added.

"We encourage competition and believe that the presence of several low—orbit satellite groups will have a positive impact on the development of this type of communication," T2 added.

Competition in the Russian satellite Internet market is quite appropriate — the more service offerings, the lower the tariffs for end users: previously, the cellular market had passed this way, said Denis Kuskov, CEO of TelecomDaily. Such an Internet is necessary for those who travel along Russian highways, residents of remote areas, and tourists, he listed.

In addition, such projects, due to their specifics, cover not only Russia, but also the entire globe, and in addition to Starlink, several projects in the field of personal satellite Internet are developing in the world, many of them are developing in the field of satellite communications — this is the latest technological fashion, explains Denis Kuskov. The appearance of Russian companies in this market would be appropriate, he concluded.