VLEO 101 for Boards: Why “Very-Low” Changes the Satellite Game

Introduction: Why Boards Need to Pay Attention

In 2025, we are at the edge of a major architectural shift in non-terrestrial networks (NTN). The era of just LEO is ending — a new generation of very-low-Earth-orbit (VLEO) systems is emerging, promising better performance, cleaner orbital stewardship, and a closer integration with terrestrial 5G/6G networks.

The big trigger? SpaceX’s September 2025 filing with the FCC requesting approval for up to 15,000 VLEO satellitesusing newly acquired EchoStar MSS spectrum. This is more than a spectrum play; it’s a signpost that link budgets, latency, and cost-per-bit economics are becoming boardroom issues, not just engineering curiosities.

1. VLEO Defined — Closer, Faster, but Harder

Most of the industry refers to LEO as any orbit below about 2,000 km. But VLEO sits below 400 km, often 250–350 km, where atmospheric drag becomes a dominant factor.

At these altitudes, satellites complete an orbit roughly every 90 minutes, offering excellent temporal revisit rates and global coverage with fewer planes. The downside? They must continuously fight drag or accept short lifetimes — measured in months without propulsion.

The incentive to go this low is simple physics:

• Shorter distance = lower free-space path loss (FSPL).

• Lower latency = closer to fibre-like experience.

• Smaller payload apertures and lower transmit power become viable, which is crucial for direct-to-phone services in narrow S-band MSS channels.

2. The Link Budget Dividend

To understand why VLEO excites engineers, look at the numbers.

FSPL Basics

Free-space path loss (FSPL) in dB is given by:

FSPL(dB) = 20 log10(d_km) + 20 log10(f_GHz) + 92.45

where d_km is slant range (km) and f_GHz is frequency in GHz.

Worked Example

Orbit	Approx. Range (km)	FSPL @ 2 GHz
GEO	35,786	~195 dB
LEO (550 km)	550	~152 dB
VLEO (300 km)	300	~148 dB

That 4 dB improvement between 550 km and 300 km is non-trivial. In a satellite-to-phone link budget, where handset antennas are tiny and MSS channels narrow, 3–4 dB is the difference between robust coverage and dropped links.

Below is a visualisation of FSPL versus orbital altitude at 2 GHz and 10 GHz:

Notice how the curve flattens as you approach GEO — moving closer has diminishing returns, but at LEO scales, the dB improvement is meaningful.

3. Performance Benefits Beyond dB

Lower Latency

Latency matters — especially for cloud gaming, video calls, and enterprise applications.

• GEO one-way latency: ~240 ms (speed-of-light + processing).

• VLEO one-way latency: 20–30 ms — essentially fibre-like.

This enables OTT video and even real-time trading applications over space-based links, a capability unthinkable a decade ago.

Smaller Satellites, Higher Reuse

Because VLEO satellites have better link budgets, they can get away with smaller payload antennas and lower RF power. This reduces mass per satellite and allows cheaper, faster manufacturing — critical when you are launching thousands of spacecraft.

4. The Hard Problems: Drag, Atomic Oxygen, and Propulsion

Drag and Station Keeping

At 300 km, atmospheric drag is non-negligible. Without propulsion, satellites deorbit within months.

Key propulsion technologies for VLEO include:

• Hall-effect and ion thrusters: Efficient but require sustained power.

• Electrodynamic tethers: Still experimental but offer propellant-free drag compensation.

• Chemical systems: Provide high thrust but burn out quickly, better for deorbit manoeuvres.

Boards should be aware that propulsion duty cycles affect satellite lifetime, solar array sizing, and OPEX (refuelling launches).

Atomic Oxygen

Atomic oxygen at VLEO altitudes corrodes exposed materials, causing erosion and optical degradation. Leading VLEO players are investing in atomic-oxygen-resistant coatings and ultra-smooth surfaces to halve drag and prolong service life.

5. Regulatory & Spectrum Landscape (2025)

The FCC is simultaneously:

• Modernising NGSO licensing timelines.

• Encouraging MSS spectrum to be used for “real service” (or risk revocation).

• Managing coexistence with terrestrial networks in PCS and AWS bands.

The EchoStar–SpaceX spectrum deal for AWS-4 and H-block (≈$17B) is a clear example: spectrum value is now tied to deployment velocity and ability to deliver direct-to-cell (D2C) service.

6. Market & Competitive Dynamics

Players to Watch

• SpaceX Starlink: The 15,000-satellite VLEO proposal is the first large-scale VLEO system with MSS payloads.

• Kuiper (Amazon): Currently focused on mid-LEO but could file for VLEO shells.

• AST SpaceMobile, Lynk Global: Both using narrowband LTE direct-to-phone from LEO — but link budgets benefit from lower orbits too.

Economics

Shorter satellite lifetimes mean more frequent replenishment — but mass production lowers cost-per-unit. Think of VLEO as a subscription model for space infrastructure: continuous capex refresh becomes the norm.

7. Strategic Implications for Boards

Here are the top-level boardroom takeaways:

1. Coverage Resilience: VLEO can complement terrestrial 5G by filling rural dead zones and providing rapid restoration after fibre cuts or disasters.

2. CapEx Modelling: Expect higher constellation churn — plan financially for frequent replenishment.

3. Regulatory Tracking: Keep a live spectrum heatmap — MSS band decisions can swing valuations.

4. Partnerships: Build early links with propulsion vendors, materials scientists, and launch providers to mitigate drag-driven risk.

5. Risk Oversight: Track space traffic management developments — 15,000 VLEO satellites raise debris avoidance and coordination issues that may invite tighter regulation.

Conclusion: The Board’s Role

VLEO is not “just another LEO shell.”

It represents a new architectural layer that can either:

• Give your organisation a resilient, high-performance coverage safety net,

• Or blindside you if competitors seize spectrum and customers first.

Boards should treat VLEO as a strategic adjacency, not a science project.

The decision is not whether to engage, but how quickly to test, partner, and scale before regulatory windows close and spectrum scarcity drives prices higher.