Why LEOs May Ultimately Reinforce Rather Than Replace Telcos

Photo Credit: Evgeny Opanasenko on Unsplash

The Ukraine war in 2022 fundamentally changed how the world viewed Low Earth Orbit (LEO) constellations. I recall sitting in a café during that period when an elderly gentleman at the next table proclaim with certainty that, “It's the end of the telcos!”

That remark stayed with me.

It had captured something much larger that was unfolding globally. Almost overnight, LEO constellations went from niche to mainstream. It became associated with wartime communications, civilian resilience, emergency infrastructure continuity, and geopolitical strategy.

As global attention around Starlink and LEO architectures grew, discussions about the future of traditional telcos also mushroomed. Can satellite constellations eventually replace traditional telecom operators altogether?

The discussion becomes more nuanced when telecommunications is viewed beyond the lens of consumer internet access alone.

For most countries, telecommunications is treated as critical infrastructure alongside sectors such as power, water, and transportation. It underpins a nation's economic activities, national resilience, and sovereign digital capabilities. Beyond connectivity services, telcos engage in infrastructure ownership, interconnections, regulatory compliance, spectrum management, service assurance, and operational resilience.

This distinction matters because the industry is not shaped by technology alone but by the regulatory, political and national interests layered on top of it. Even routine operational choices, where to route traffic, which vendors to rely on, how much redundancy to build in, sit inside a framework of sovereign and security considerations that most other industries will never have to navigate.

Enterprise clients, many of whom are CIIs themselves, hold telcos to binding service level agreements that terrestrial infrastructure is built to meet. Non-terrestrial networks are unlikely to match that same level of availability on their own. In many ways, LEOs play more of an integration role rather than a replacement one within the broader market landscape.

Capacity, Density and Economics

LEO constellations are valuable in environments where terrestrial network is sparse, geographically challenging, or uneconomical to deploy. Remote communities, maritime environments, aviation, mining operations, and disaster recovery scenarios are good candidates for satellite connectivity.

Dense urban environments, however, operate under a very different rules.

Cities generate extraordinary concentrations of network traffic. Residential clusters, enterprise districts, hyperscale cloud usage, AI workloads and digital services all converge on the same dense layer of towers, exchanges and data centres, which have to continuously move massive volumes of traffic between them to keep things running.

Terrestrial infrastructure continues to retain significant structural advantages in this area. The economics of delivering high-capacity bandwidth into concentrated urban corridors are fundamentally different from distributing finite shared satellite capacity across large population concentrations. LEO architectures have advanced tremendously in terms of latency and performance. However, scaling realities, spectrum limitations, and capacity constraints restricts LEO's ability to as a challenger within dense urban environments in the near term.

Environmental and geographical conditions also have direct impact on performance. Dense urban environments, heavy tropical rainfall, line-of-sight considerations, and regional weather patterns are operational variables that LEO users need to continuously contend with, particularly in equatorial regions such as Singapore, and parts of Southeast Asia.

But that doesn't mean that the significance of LEOs is diminished. In fact, it highlights how these architectures are optimised for different operating environments. LEOs can significantly reshape connectivity economics in underserved and hard-to-reach regions, while terrestrial networks continue to play a foundational role within dense, high-capacity urban ecosystems.

Operational Assurance and Enterprise Requirements

The other key aspect that is often overlooked is the distinction between consumer and business-class grade connectivity.

For most consumers, connectivity is often evaluated based on accessibility and speed. However, for enterprises, governments and operators, the considerations are far more complex. Resiliency, redundancy, latency consistency, failover capability, service assurance and operational continuity are equally important as well.

A terrestrial network not only provides internet access, it also supports interconnected digital systems, where downtime can carry substantial operational and financial consequences. Cloud platforms, financial systems, industrial automation, logistics networks and public services depend on these highly resilient and deeply integrated networks to perform.

This is where terrestrial and non-terrestrial networks continue to evolve as complements instead of pure competing layers. LEOs offer enormous advantages in mobility, rapid deployment, redundancy, and remote accessibility that is complementary to the other. Rather than a terrestrial versus satellite debate, discussions should be on the orchestration between the two, and how a hybrid approach can achieve better coverage.

Regulation, Sovereignty and National Infrastructure

Telecommunications is never viewed purely as a commercial sector in most countries because it powers critical national functions. Governments impose extensive regulatory obligations involving licensing, cybersecurity, lawful interception, emergency communications, and resilience. As digital systems become more intertwined with economic activities and national security, the strategic importance of this sector naturally becomes more pronounced than ever.

This becomes particularly relevant as LEO constellations scale globally.

Questions surrounding infrastructure control, traffic routing, operational oversight and geopolitical dependencies begin to carry greater significance when it becomes deeply embedded within national operating environments. Governments seldom treat this area lightly, especially when broader concerns such as digital sovereignty and national resilience are increasingly shaping policymaking decisions worldwide.

The Ukraine war itself demonstrated how closely telecoms can become intertwined with geopolitical realities. Commercial satellite constellations are now viewed with an extra strategic lens that extend into civilian continuity, defence operations, and national resilience.

This is partly why the future of LEOs would involve deeper partnerships with telecom operators rather than bypassing them altogether. Telcos already possess decades of operational experience navigating regulatory environments, managing regulatory obligations, and possess large-scale service delivery capabilities.

In many ways, the closer LEOs move toward becoming a mainstream service, the more strategically important these local operating knowledge becomes.

The Operational Ecosystem Around Telecommunications

One of the more understated aspects of the industry is the sheer amount of operational coordination required to sustain these networks at scale.

Telecom operators have spent decades building up field operations, enterprise support frameworks, customer operations, maintenance capabilities, distribution channels and regulatory engagement motion. As LEOs continue to scale into enterprise, governments and critical functions, it will be met with the same operational realities that the telcos have historically managed.

While LEOs have proven to be disruptive from a service provisioning persepctive, the industry often evolve through integration as much as disruption. New technologies frequently become incorporated instead of fully displacing existing ones due to legacies and complex systems architectures.

Final Thoughts

LEO constellations represent one of the most important developments of the industry in recent years. It will undoubtedly reshape the connectivity economics in underserved regions, strengthen resiliency architectures, and accelerate new approaches toward global connectivity.

At the same time, telecommunications is never just been about internet access alone. It is a deeply interconnected ecosystem shaped by economics, infrastructure density, operational complexity, regulation and sovereignty considerations.

If anything, the rise of LEOs may not diminish the role of telecom operators. It will ultimately reinforce how strategically important they remain within the broader communications landscape.