The satellite industry's most expensive problem isn't in orbit, it's on the ground. The challenge lies in the financial systems that underpin these partnerships. While satellite and mobile network operators (MNOs) are making headway in expanding global connectivity, they're hindered by a legacy financial infrastructure that's ill-equipped to handle the unique dynamics of satellite roaming. This issue is a critical barrier to the widespread adoption of satellite-based services, and it's time for the industry to take a hard look at how it can be addressed.
The satellite industry is on the cusp of a major breakthrough. With companies like AST SpaceMobile and SpaceX leading the charge, we're witnessing the emergence of a space-based cellular broadband network that could revolutionize global connectivity. However, the financial systems that facilitate these partnerships are stuck in the past. Most MNOs still process payments through a framework that dates back to 1991, and this is a major impediment to the growth of satellite-based services.
The problem is that satellite roaming traffic flows only one way. MNOs are always paying out to satellite operators, but they're not collecting inbound roaming revenue. This creates a limited incentive for MNOs to invest in making these partnerships work. As a result, they're not upgrading their billing and settlement infrastructure, and both sides are forced to try and force commercial arrangements through incompatible processes. This leads to small traffic volumes and limited returns on investment for MNOs, reinforcing their belief that satellite isn't worth the investment.
The satellite operators, on the other hand, are naive in their approach. They don't carry 30 years of assumptions about how mobile commerce is supposed to work, and this can lead to productive conversations. However, MNOs' instincts are to push back, even though they faced a very similar problem decades ago. Back then, when mobile roaming was new, they had no way to handle traffic across borders. Over time, they came together to create frameworks and standards that ensure interoperability across hundreds of networks and handle billions of dollars in settlements.
The history of mobile roaming should inform what happens next. The industry has to commit to the GSMA's Billing and Charging Evolution (BCE) framework, which already supports the flexible charging models that satellite connectivity requires. However, adoption has been slow partly because MNOs don't see enough near-term satellite revenue to justify a change. Terrestrial roaming revenue took off after common settlement processes were put in place, and broader BCE adoption has to happen for satellite communications to reach their commercial potential.
The longer that this issue goes unaddressed, the fewer companies will be around to do it. Within five years, a person will make a standard voice call over satellite from the open ocean on a regular phone. The technology is already being tested, and making it work reliably, everywhere, means that two industries that have never had to depend on each other will need to figure out how. The satellite industry and MNOs must come together to create a new financial framework that supports the growth of satellite-based services. Only then can we truly unlock the potential of this exciting new technology.
