The modern space industry is undergoing a period of rapid transformation. McKinsey has compared the state of the sector today to the aviation space in the wake of World War II, and the internet ecosystem in the early 1990s. The World Economic Forum has predicted that the global space sector will reach $1.8 trillion in value by 2035. Space, in other words, is evolving.
The conversation is evolving, too. Increasingly, players in the sector are discussing the advantages and disadvantages of different satellite orbits. The traditional preference has been for Low Earth Orbit (LEO) and Geostationary Orbit (GEO). But within investment circles and in publications like The Wall Street Journal, it’s recently been proposed that Medium Earth Orbit (MEO) is the ‘sweet spot’ for specialised satellite applications. Is it true?
MEO in a nutshell
MEO lies between LEO (altitudes of 160 to 2,000 kilometres) and GEO (35,786 kilometres). It balances the wide coverage of GEO with the low latency of LEO. MEO is mainly used for global navigation systems – GPS, Galileo, and GLONASS, for example – as well as military communications and Earth observation. Thanks to its position, it’s useful in areas like navigation, defence, and specialised Earth observation.
But its benefits must be weighed against its costs and limitations. It’s more expensive to build, launch, and maintain MEO satellites than it is for LEO. Fewer satellites are needed in MEO to cover the whole planet. This makes MEO less appealing for consumer broadband, for instance, for which cost-efficiency and scalability are key.
MEO’s advantages
But the ease with which a small number of MEO satellites can cover the Earth is undeniably appealing. GPS needs just 24 MEO satellites for global coverage; in LEO, a constellation of hundreds or even thousands of satellites might be required. Furthermore, MEO is ideal for those industries which depend on constant global communication or observation. Satellites in MEO stay over areas longer and last longer, often enduring for between 12 and 15 years; LEO satellites last between five and seven. Over time, this saves a lot of money, partly because launching satellites can be expensive.
MEO also has moderate latency, with a delay in the time it takes for a signal to travel from one point to another of around 150 milliseconds. This is longer than LEO’s 20-40 milliseconds but also much shorter than GEO’s 600 milliseconds. This makes MEO a useful satellite orbit for applications that need reliable communication but not too much of a delay, such as military communications or high-precision monitoring of climate events or natural disasters of the kind that the leading space technology companies provide. MEO offers a compromise between LEO’s low latency and GEO’s wide coverage. That makes it a sound choice for specialised satellite networks.
MEO’s disadvantages
Those are the advantages. What are the limitations? They come in two forms: technical and financial. And at present, these stand in the way of more widespread use of MEO compared to LEO.
First, MEO satellites need larger antennas and more power because they are higher up in the Earth’s orbit. Signals must travel further and through more of the Earth’s atmosphere. Satellites are therefore bigger and heavier, requiring more sophisticated energy management systems, and so are more expensive to build and launch. An LEO satellite might cost $500,000 to $1 million; its MEO counterpart can cost over $10 million.
Power is also an obstacle. MEO satellites need more energy to maintain the strength of their communication, which increases their complexity and cost. And since they need to last longer, their systems need to be highly efficient. Moreover, MEO satellites orbit through a region called the Van Allen belts, where there are high levels of radiation. This radiation can harm the satellite’s electronics and shorten its lifespan. To protect against this, MEO satellite engineers use special materials and technology designed to resist radiation damage.
These radiation-proof or radiation-resistant components are more expensive than their ordinary equivalent, which increases the overall cost of building the satellite. Importantly, radiation affects not just the satellite’s lifespan but its performance. Even a small amount of damage could harm its ability to communicate or navigate, which necessitates repairs and replacements.
The commercial viability of MEO
Due to the high cost of building and launching MEO satellites, they’re mainly used at the moment in specialised areas where their benefits outweigh the drawbacks. Fields like global navigation, military communications, and Earth observation gain the most from using MEO, since global coverage and long-lasting satellites are key. SES, the Luxembourgish satellite telecommunications network provider, operates a constellation of MEO satellites for communication services. Mangata Networks, a satellite-enabled network and cloud services company, also has a plan to have a service in MEO, as well as highly elliptical orbit (HEO).
For now, due to the higher cost of MEO, it can be less appealing for more widespread commercial uses, such as consumer broadband. LEO systems like SpaceX’s Starlink are cheaper, more scalable, and provide fast, low-latency internet with many satellites. LEO, then, is perceived to be better suited for mass-market applications. MEO is best suited for uses where the combination of global coverage and moderate latency is prized highly.
The case for complementarity
There’s no reason why we have to position MEO and LEO (and GEO) as rivals, even if it’s useful to consider the benefits and drawbacks of each one. LEO is great for consumer broadband, where scalability, low latency and low cost are key. MEO is better for tasks whose need for accuracy and reliability trumps the higher cost, or the ability to scale.
These two orbital levels can be combined fruitfully. Climate intelligence companies, for example, can take data they process from a range of satellites and all levels or orbit, which provides them with the most complete and accurate picture possible of what’s happening on the planet. As with laser and radio communications, complementarity is the way forward, with one form of technology (or, in this case, one level of orbit) filling the gaps left by the other.
What investors need to know
For investors, MEO undoubtedly offers opportunities, even if its higher costs and technical challenges make it less widely appealing for mass-market uses. However, for areas needing global coverage and moderate delay, like GPS, military communications, and climate monitoring, MEO is an excellent option.
LEO systems, meanwhile, are growing fast. LEO’s lower costs and ability to serve big markets, like consumer broadband, make it the top choice at present for commercial satellites. MEO is a more specialised option, with investments focused on specialised sectors, though that is changing, and there are exceptions to the rule.
Conclusion
MEO holds a special position in the present satellite industry, balancing coverage, latency, and lifespan. This makes it ideal for areas like global navigation, military communications, and Earth observation. But owing to its higher cost, at least for now, it’s less competitive for large-scale commercial uses compared to LEO. While MEO likely won’t replace LEO for mass-market applications in the short term, it remains valuable for sectors that need precision and global coverage. For investors, MEO offers plenty of opportunities in specialised markets, but they must be ready to handle the higher costs and challenges of operating in this orbit, and have access to those with the know-how to ensure they invest strategically.