Satellite Internet Explained: How Broadband from Space Works

For decades, satellite internet was synonymous with high latency, low speeds, and expensive hardware. Geostationary satellites orbiting at 36,000 km delivered broadband with 600+ millisecond round-trip delays, fine for email, but unusable for video calls or online gaming. That era is over.

A new generation of low Earth orbit (LEO) mega-constellations is rewriting the rules of satellite internet. SpaceX's Starlink, Amazon's Project Kuiper, and Eutelsat OneWeb are deploying thousands of satellites at altitudes between 300 and 1,200 km, slashing latency to 20-50 milliseconds, comparable to terrestrial broadband. The result is a technology that can finally compete with cable and fiber in many use cases, while reaching the 3+ billion people who still lack reliable internet access.

How Satellite Internet Works

At the most basic level, satellite internet works by relaying data between a user terminal on the ground and a gateway station connected to the internet backbone, using a satellite as an intermediary. The process involves several key steps:

1. User request: Your device sends a request (e.g., loading a webpage) to a small dish or phased-array antenna at your location
2. Uplink: The user terminal transmits the signal to a satellite overhead using Ku-band or Ka-band radio frequencies (12-40 GHz)
3. Satellite relay: The satellite receives the signal and either relays it to a ground gateway station or passes it to another satellite via an inter-satellite laser link
4. Gateway downlink: The gateway station receives the signal and routes it to the broader internet via fiber optic connections
5. Return path: The response follows the reverse path: gateway to satellite to user terminal

The entire round trip happens in milliseconds for LEO systems. The critical factor is altitude: lower orbits mean shorter distances, which means lower latency and higher potential throughput.

GEO vs. LEO: The Fundamental Tradeoff

Traditional satellite internet providers like Viasat and Hughes (EchoStar) use geostationary (GEO) satellites parked at 35,786 km altitude. At that distance, a single satellite can cover a third of Earth's surface, but the physics of light speed impose a minimum round-trip latency of about 600 milliseconds.

LEO constellations operate at 300-1,200 km altitude, reducing latency to 20-50 ms. But because each LEO satellite covers a much smaller area and moves across the sky in minutes, you need hundreds or thousands of satellites to maintain continuous coverage. This is the fundamental tradeoff:

• GEO: Few satellites needed (3-5 for global coverage), high latency, mature technology, expensive satellites ($200M-$500M each)
• LEO: Thousands of satellites needed, low latency, newer technology, cheaper per satellite ($250K-$1M each) but massive constellation cost
• MEO: A middle ground. O3b mPOWER operates at ~8,000 km with ~150 ms latency and fewer satellites than LEO

The Major Satellite Internet Constellations

SpaceX Starlink

Starlink is the dominant player with over 6,000 satellites in orbit as of early 2026, serving more than 4 million subscribers across 75+ countries. Key specifications include:

• Orbit: 540-570 km altitude, 53-97 degree inclinations
• Speeds: 50-250 Mbps download (residential), up to 350 Mbps (Priority tier)
• Latency: 20-40 ms typical
• User terminal: Phased-array flat antenna ("Dishy McFlatface"), ~$599 standard / $2,500 high-performance
• Monthly cost: $120 residential, $140 roam, $250-$500 business/priority tiers
• Gen2 satellites: V2 Mini satellites launched on Falcon 9 provide 4x the capacity of V1.5; full V2 satellites on Starship will be even larger

Starlink's key innovation is its inter-satellite laser links (ISLs), allowing satellites to relay traffic between each other without touching the ground. This enables coverage over oceans, polar regions, and areas without nearby gateway stations, and can actually provide lower latency than fiber for long-distance routes because light travels faster in vacuum than in glass fiber.

Amazon Project Kuiper

Amazon's constellation began deployment in late 2025 with a planned 3,236 satellites at altitudes of 590-630 km. Amazon has invested over $10 billion and secured launch contracts with ULA (Atlas V and Vulcan), Arianespace (Ariane 6), and Blue Origin (New Glenn). Kuiper aims to compete directly with Starlink on price and performance, with integration into the AWS cloud ecosystem as a differentiator.

Eutelsat OneWeb

Eutelsat OneWeb's first-generation constellation of 634 satellites at 1,200 km is complete and operational, focused primarily on enterprise, government, and maritime customers rather than direct-to-consumer residential service. The merger with Eutelsat's GEO fleet creates a multi-orbit operator with flexibility to route traffic via LEO or GEO depending on requirements.

Telesat Lightspeed

Canadian operator Telesat is building a 198-satellite constellation in LEO, focused on enterprise and government customers. Lightspeed emphasizes high-throughput, low-latency connectivity with advanced beam-forming technology.

User Terminal Technology

The user terminal (dish/antenna) is one of the most critical (and expensive) components of satellite internet. Traditional parabolic dishes needed manual pointing and could only track GEO satellites. Modern LEO terminals use electronically steered phased-array antennas that can track fast-moving LEO satellites across the sky without moving parts.

Building these terminals affordably at scale has been one of the biggest engineering challenges. Starlink's first-generation terminal reportedly cost SpaceX over $1,300 to manufacture but was sold for $499. Successive generations have driven costs down significantly through custom ASIC development and manufacturing scale. The current rectangular Starlink Standard dish is significantly cheaper to produce while delivering better performance.

Advantages of Satellite Internet

• Universal coverage: Satellites can reach anywhere on Earth (rural areas, oceans, disaster zones, developing nations) without terrestrial infrastructure
• Rapid deployment: A satellite constellation provides nationwide coverage once deployed; no need to lay fiber to every home
• Mobility: Portable and mobile terminals enable connectivity on planes, ships, RVs, and military vehicles
• Resilience: Less vulnerable to natural disasters that destroy ground infrastructure (hurricanes, earthquakes, floods)
• Long-distance latency advantage: For intercontinental routes, ISLs through vacuum can beat fiber optic paths, potentially valuable for financial trading

Limitations and Challenges

• Capacity constraints: Each satellite has finite bandwidth shared among users in its coverage area. In densely populated areas, terrestrial networks offer far more aggregate capacity
• Weather sensitivity: Ka-band and Ku-band signals are attenuated by heavy rain, snow, and dense cloud cover, a phenomenon called rain fade
• Obstruction: LEO terminals need a clear view of the sky. Trees, buildings, and terrain can block the signal and cause dropouts
• Cost: Hardware and monthly subscription costs remain higher than typical terrestrial broadband, a barrier in price-sensitive markets
• Orbital debris: Thousands of satellites in LEO increase collision risk and contribute to the Kessler Syndrome concern
• Astronomy impact: Satellite streaks affect optical and radio astronomy observations, though operators are implementing mitigations

Key Use Cases

Satellite internet serves several distinct market segments, each with different requirements:

• Rural and underserved areas: The largest addressable market, connecting homes, schools, and businesses where fiber/cable/5G is unavailable or prohibitively expensive
• Maritime: Ships, offshore platforms, and cruise lines. Starlink Maritime has seen explosive adoption, with major cruise lines and shipping companies signing up
• Aviation: In-flight Wi-Fi is being transformed by LEO constellations. Starlink Aviation and OneWeb/Panasonic partnerships offer dramatically better in-flight internet
• Enterprise/backhaul: Cell tower backhaul in remote areas, enterprise branch connectivity, and cloud access for distributed operations
• Government and military: Resilient communications for defense, disaster response, and remote government facilities. Starlink's Starshield is a dedicated government variant
• Mobility: RVs, overlanders, emergency vehicles, and mobile command posts

The Economics of Satellite Internet

Building and operating a LEO mega-constellation is extraordinarily capital-intensive. SpaceX has invested an estimated $10+ billion in Starlink. Amazon has committed $10+ billion to Project Kuiper. The business model depends on achieving sufficient subscriber density to cover these costs.

Key economic factors include:

• Satellite manufacturing cost: Driven down by mass production; SpaceX builds Starlink satellites in-house at an estimated $250,000-$500,000 each
• Launch cost: SpaceX's vertical integration means it launches its own satellites at marginal cost. Competitors must pay market rates ($5,000-$10,000 per kg to LEO)
• User terminal subsidy: Most operators sell terminals below cost initially, recouping through monthly subscriptions
• Satellite lifespan: LEO satellites last 5-7 years due to atmospheric drag, requiring continuous replenishment launches
• ARPU (Average Revenue Per User): At ~$120/month with 4+ million subscribers, Starlink is generating $5-6 billion in annual revenue, approaching profitability

The Future of Satellite Internet

Several trends will shape the next decade of satellite internet:

• Direct-to-smartphone: SpaceX's partnership with T-Mobile and AST SpaceMobile's dedicated satellites aim to connect standard smartphones directly to satellites, eliminating the need for specialized terminals
• Higher throughput: Next-generation satellites with more advanced payloads will dramatically increase per-satellite capacity
• Lower costs: Starship's ability to launch 60+ V2 satellites per flight will reduce per-satellite launch costs by an order of magnitude
• Hybrid networks: Integration of satellite and terrestrial 5G into seamless networks, with automatic failover between space and ground
• Optical ground stations: Free-space optical links between satellites and ground stations could provide higher bandwidth than radio frequency links

Satellite internet is no longer a niche product for rural cabins. It's becoming a global communications infrastructure that complements terrestrial networks, extends connectivity to every corner of the planet, and enables entirely new applications in mobility, defense, and disaster response.

Track Internet Constellations on SpaceNexus

SpaceNexus provides real-time tracking and analysis for every major satellite internet constellation. Our Constellation Tracker lets you monitor deployment progress, orbital status, and coverage maps for Starlink, Kuiper, OneWeb, and more. Compare constellations side-by-side, track launch manifests, and analyze market share trends.

Explore Satellite Constellations on SpaceNexus