Satellite spectrum efficiency

I’m no fan of the concept of spectrum efficiency, but it’s helping me understand the gulf between the cellular and satellite businesses.

Terrestrial cellular systems seem to be more efficient than satellite systems, on at least two counts:

• Spatial re-use: Terrestrial service areas are much smaller than satellite ones, so that the number of users that can be served in a given frequency bandwidth (users/Hz) is inevitably higher for terrestrial. Smaller coverage areas is a way to serve more users with the same bandwidth. Both industries are moving to smaller cells: cellular from macrocells to femtocells; satellite from one-beam to multi-spotbeam geostationary satellites (each beam uses the same bandwidth, increasing servable users/Hz), and from geostationary to low-Earth orbit (lower orbits mean spots with the same angular opening are smaller). However, terrestrial will always have an advantage because of altitude.

• Spectral efficiency: Because of shorter ranges, terrestrial signals are stronger than ones coming down from a satellite. Stronger signals means one can get higher throughput in a given frequency bandwidth (bps/Hz). Spatial re-use amplifies spectral efficiency – as cells get smaller, propagation losses drop, signal-to-noise ratios go up, and throughput increases. And perhaps more important, while cellular operators each have their own frequency blocks, and geostationary satellite at different orbital positions can use the same bandwidth without interfering, non-geostationary satellites have to share bandwidth under FCC rules.

Combining these two (users/Hz and bps/Hz), one sees that (bps.users)/Hz is higher for terrrestrial – perhaps much, much higher – than for satellite. If one uses (bps.users)/Hz as an efficiency metric, then one can say that terrestrial is “much more efficient” than satellite.

Since throughput translates to revenue, larger bps.users means more $; thus, terrestrial operators will generate much more $/Hz than satellite ones. Not to mince words, terrestrial is more economically valuable than satellite, and always will be. Cellular will always be able to outbid satellite if it comes to auctions since it generates more $/Hz. (This seems to be the underlying rationale of the Intel/Intelsat/SES deal proposed for C-band.)

Satellite could only win in an auction if the terrestrial industry places essentially no value on a piece of spectrum, i.e. a frequency block in a particular place. That essentially means unpopulated areas, where cellular licenses have sold for pennies compared to dollars for urban areas. Conveniently – or by necessity – satellite is focusing a lot of attention on its ability to serve rural populations.