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Targeted deployment, affordable access, and smarter governance can unlock LEO satellites’ development potential in the region.
Low Earth Orbit satellites: Closing the Indo-Pacific digital divide
The Indo-Pacific’s digital divide is substantial but uneven. Highly connected economies, such as Australia, New Zealand, and Singapore, stand in stark contrast to the estimated 600 million people across Southeast Asia, South Asia, and the Pacific Islands region who remain offline or under-connected. Rural and remote communities have even less access than urban populations. Additional barriers, including dispersed geographies, mountainous terrain, and the cost of laying fibre-optic cables and building mobile towers, limit access in isolated communities.
In each case, the challenge varies: rural usage gaps in mainland Southeast Asia and South Asia; thousands of unconnected islands in maritime Southeast Asia; and Pacific Island microstates where fragile or absent submarine cables and recurring natural disasters hamper reliable access. In many countries, demand-side barriers such as affordability, digital literacy, and limited local content also contribute to underutilisation of existing mobile network coverage. The Indo-Pacific therefore does not present a single connectivity problem, but a range of problems that require targeted solutions.
Low Earth Orbit (LEO) satellites offer a technological solution to help bridge the digital divide. Deployment is accelerating, led by Starlink. Amazon Leo is due to enter the market this year, and China-backed constellations are pushing into the region. Yet affordability remains a barrier for the communities that would benefit most, and the technology is moving faster than the policy frameworks needed to govern it. Some governments are banning operators they cannot effectively regulate, while others are opening markets without clear rules.
LEO satellites should be deployed strategically in the region, targeting remote islands, mountainous territory, disaster-prone areas, and applications where terrestrial networks are not viable. Targeted use cases — for remote education and health services, maritime and agricultural businesses, disaster resilience, and shared community access points — should be piloted and evaluated to build an evidence base for what works and at what cost.
Governments must shift from reactive to strategic approaches. This includes using licensing to secure data governance and consumer protection; building affordability mechanisms for low-income communities (subsidies, community gateways, direct-to-device services, and universal service obligation protections); and facilitating digital literacy, device access, reliable electricity, and locally relevant content to drive meaningful use.
Provider choice should be evaluated on strategic as well as commercial grounds. Infrastructure decisions made now between US, European, and Chinese-backed operators will be difficult to reverse, with long-term implications for secure and trusted digital infrastructure. Regional coordination can help smaller states negotiate with major operators. Framing LEO deployments as development and climate resilience infrastructure could also unlock concessional financing and technical assistance from development partners.
Across much of the Indo-Pacific, geography makes conventional infrastructure difficult to extend. Mountains, small islands, dispersed populations, and frequent natural disasters raise the cost of laying fibre-optic cables and building telecommunications towers. LEO satellites could help address these connectivity gaps in remote and underserved areas.
LEO systems offer an alternative — or complement — by delivering connectivity from orbit, extending coverage to communities where terrestrial infrastructure is not commercially viable or physically practical. However, their development impact in lower-income countries remains unproven, and large-scale use cases are still emerging. Translating potential benefits beyond these cases will require careful assessment, targeted policy design, and context-specific implementation.
Satellite connectivity operates across three orbital tiers:
LEO satellites sit between 300 and 2,000 kilometres above Earth, completing an orbit every 90 to 120 minutes and covering different parts of the globe as they move. They communicate with ground stations or through inter-satellite links that relay data between satellites. Supporting infrastructure includes gateway stations, network operation centres, and data centres that manage satellite movements, route traffic, and maintain service reliability.
For users, accessing LEO services requires a small satellite terminal — typically a dish — with power and a subscription plan. As shown in Figure 1, users connect to a local Wi-Fi network linked to the dish. Data is transmitted to LEO satellites, relayed to a ground station, and then routed through fibre-optic networks to data centres or cloud platforms. The process is reversed for the return signal, completing the connection in milliseconds.
Regulatory approval is central to LEO satellite deployment. Providers must typically obtain spectrum licences, comply with national rules for ground infrastructure, and secure approval for service provision. Requirements vary widely across jurisdictions — from registration to multi-stage authorisation processes. Competition from incumbent internet service providers may constrain market entry and expansion. As a result, services may be restricted or delayed even where technical coverage exists.
LEO connectivity also has practical limitations. Terminals require an unobstructed view of the sky, making installation easier in open areas but more difficult in dense urban environments where buildings or trees block the signal. Tropical downpours, heavy rain, or storms can cause signal attenuation and reduce throughput. Compared with terrestrial systems such as fibre-optic or mobile networks, LEO services may deliver less consistent performance, particularly in urban areas, and speeds can drop during peak demand.
The global space economy is projected to reach US$1.8 trillion by 2035, driven largely by LEO constellations. However, value creation is likely to be concentrated among a small number of providers controlling key parts of the value chain, with Indo-Pacific benefits dependent on developing domestic capabilities in ground infrastructure, data analytics, and related skills rather than remaining mere end-users of external services. Financial barriers to entry remain significant, varying depending on mission scope and technical ambition. Amazon Leo (formerly Project Kuiper) will cost more than US$10 billion, while full deployment of SpaceX’s Starlink is estimated at US$20–30 billion.
A mix of private and state-backed operators is developing LEO constellations with different strategies in satellite numbers, coverage, and target markets as summarised in Figure 2. Chinese-backed LEO operators GuoWang and Qianfan represent a strategic shift, both advancing rapidly towards full operation with a dual mandate of serving domestic communications and extending broadband connectivity across the Indo-Pacific and beyond. Their emergence could reshape strategic choices for governments in the region.
The digital divide across the Indo-Pacific is significant but uneven. The internet reaches 88 per cent of households in urban Asia–Pacific but only 66 per cent in rural areas, with connectivity challenges shaped by geography, infrastructure maturity, and economic conditions. A gender gap also persists, with usage at approximately 81 per cent for men and 74 per cent for women. Understanding these differences helps identify where LEO satellites offer the greatest value — strengthening existing networks and enabling connectivity where terrestrial solutions remain limited.
Connectivity across Southeast Asia reflects the region’s geographic diversity. In mainland countries such as Cambodia, Laos, Myanmar, Thailand, and Vietnam, mobile networks reach most people, and urban areas are generally served by 3G, 4G, and increasingly 5G. Yet access remains uneven as rural and lower-income communities are often underserved by networks that are commercially viable in cities but costly to extend to marginal areas. In maritime states such as Indonesia and the Philippines, geography further complicates connectivity: both comprise thousands of inhabited islands, and despite significant investment in terrestrial networks and submarine cables, connecting dispersed populations remains difficult.
South Asia presents a similar pattern. In continental countries such as India, Bangladesh, Nepal, and Bhutan, mobile networks reach most urban populations, but rural and lower-income communities remain underserved. Mountainous terrain in Nepal and Bhutan, and remote border regions in India’s northeast, make conventional infrastructure particularly costly to extend, while Pakistan’s vast and sparsely populated interior presents similar challenges. In Sri Lanka and the Maldives, dispersed island and coastal communities face connectivity constraints shaped by geography rather than income alone.
Pacific Island states face connectivity constraints of a different scale. Countries such as Kiribati, Tuvalu, Vanuatu, and Solomon Islands are home to some of the world’s most geographically isolated populations. Many rely on a single submarine cable for communications, creating a critical vulnerability. Small populations scattered across vast ocean distances push infrastructure costs higher, while cyclones and flooding frequently damage networks. Papua New Guinea, despite being the Pacific’s largest economy, faces the same connectivity problems, with many highlands and coastal communities still unconnected. For much of the Pacific, LEO satellites are not just a complement to terrestrial networks but one of the few viable paths to resilient connectivity.
The Indo-Pacific connectivity gap is not just a technological problem; it is a governance and socio-economic challenge. While 3G networks capable of basic browsing and communication exist in most countries, internet use remains low at individual and household levels, as shown in Figure 3. This indicates that coverage does not necessarily translate into effective connectivity. Demand-side constraints, including affordability, limited digital literacy, lack of relevant local content, and demographic and mobility factors such as youth out-migration and seasonal or dispersed living patterns, contribute to underutilisation of existing infrastructure. Without addressing these barriers, LEO satellites risk becoming another driver of digital inequality.
Across Southeast Asia, South Asia, and the Pacific, governments are taking varied approaches to LEO services like Starlink, weighing potential connectivity gains against enforcement challenges, policy priorities, and terrestrial infrastructure limits. Service deployment also depends on ground infrastructure requirements, particularly gateway siting, interconnection, and cost-sharing arrangements, which can shape approval timelines. Figure 4 shows Starlink availability: most countries offer residential and business services; Singapore restricts access to business use only; and some countries are still awaiting commercial approval, leaving the regulatory and operational landscape unsettled.
Affordability remains the most immediate barrier to connectivity across the Indo-Pacific. Figure 5 compares the affordability of fixed broadband, mobile broadband, and Starlink’s residential lite services. The International Telecommunication Union (ITU) and the UN Broadband Commission for Sustainable Development define that affordable entry-level broadband should not exceed 2 per cent of monthly Gross National Income (GNI). While most Southeast and South Asian countries have achieved this target for data-only mobile broadband, fixed broadband remains above the threshold across most developing economies. LEO satellite services do not resolve this gap — with Starlink pricing far exceeding affordability benchmarks. In a few Pacific Island countries, including Solomon Islands, Tuvalu, and Vanuatu, Starlink may be cheaper than extremely costly fixed broadband, but it remains unaffordable for most households. Without targeted affordability policies — discussed in the next section — commercial LEO deployment will continue to leave the region’s most underserved populations offline.
GNI per capita measures the average national income per person and is considered an indicator of economic wellbeing and thus is often used to assess affordability and development context.
LEO satellites are not a universal solution to connectivity gaps, nor a replacement for terrestrial networks. In most countries, fibre-optic and mobile infrastructure will remain the primary source of broadband connectivity. Their value lies in specific contexts: serving remote communities beyond the economic reach of terrestrial investment; providing resilient backup when ground networks fail; and supporting connectivity where no viable alternative exists.
Remote communities often lie beyond the economic reach of terrestrial networks, being too small, dispersed, or distant for commercial providers. LEO satellite internet can address these gaps where fibre-optic or mobile networks are too costly or logistically difficult to build. In Pacific Island microstates and rural Papua New Guinea, satellites may be the only viable option. In higher-income countries, LEO satellites complement existing networks, extending coverage to areas with weak or no signal and supporting people working or travelling remotely. In Australia, for example, Telstra is partnering with Starlink to provide satellite voice and broadband services in remote areas where distance and terrain limit terrestrial networks. The national broadband provider NBN is working with Amazon Leo to expand high-speed satellite connectivity across regional and remote Australia.
LEO satellites bypass infrastructure gaps by delivering connectivity directly to remote communities, without the road and cable investments required for terrestrial networks.
LEO satellites are increasingly used to enhance resilience in countries with extensive fibre-optic networks or high exposure to natural disasters. They can provide automatic failover — near instantaneous transition to a standby system — during submarine cable outages, power failures, or other disruptions, maintaining communications and supporting emergency response. In December 2024, earthquakes in Vanuatu disrupted contact with national disaster authorities until Starlink was activated. In April 2025, a blackout in Spain and Portugal cut power to thousands of mobile towers, halving terrestrial network capacity — Starlink maintained connectivity via ground stations in Italy.
The main advantage is network independence: LEO satellites operate separately from terrestrial infrastructure and continue functioning when ground systems fail. Integrating LEO satellites into national disaster frameworks, rather than relying on ad hoc deployment, would maximise resilience.
LEO satellites can enhance government services by improving access to education and healthcare in remote areas. Fiji and Solomon Islands use government-funded LEO programs to connect schools, giving students on outer islands access to the same digital resources as urban centres. A single terminal can support video learning, teacher training, and administration, with shared access keeping costs manageable. In Indonesia, LEO satellites support the government’s digital health transformation by connecting remote community health centres, enabling disease screening, child growth monitoring, the upkeep of immunisation records, and the expansion of telemedicine access.
LEO satellites are extending connectivity in the aviation and maritime sectors, where terrestrial coverage is limited. They provide reliable communications across remote ocean regions, supporting navigation, safety, and real-time data transfer. Airlines including United Airlines, Qatar Airways, and Lufthansa partner with Starlink for in-flight Wi-Fi, while Hawaiian Airlines uses it to address Pacific route gaps. In maritime operations, Maersk uses LEO connectivity for crew communications, vessel operations, and cloud-based systems, and Royal Caribbean provides improved onboard internet for passengers and crew. In the Pacific, LEO satellites can support sustainable fisheries by improving monitoring, control, and surveillance, including detection of illegal, unreported, and unregulated fishing.
LEO satellites offer significant benefits for the mining and agriculture sectors, especially in remote regions beyond the reach of fixed or mobile networks. In Australia, where operations are often concentrated in such areas, LEO-enabled connectivity can support data collection, Internet of Things (IoT) deployment, and other digital technologies, enhancing productivity, operational efficiency, and real-time decision-making. In many remote areas of Southeast and South Asia, LEO connectivity has the potential to enhance farmers’ economic opportunities by enabling online platforms and providing smart farming tools and market information.
LEO satellites have demonstrated strategic value in conflict and crisis settings. Ukraine’s experience after Russia’s invasion in 2022 showed how LEO-backed communications can function when terrestrial networks are destroyed, with Starlink supporting both military coordination and civilian access to essential services. However, the case also highlights governance and cybersecurity risks — including reliance on a single private operator with discretion over service availability, and exposure to cyberattacks and disruptions to ground and terminal infrastructure.
For Indo-Pacific governments, the lesson is more about resilience than conflict, ensuring that national security communications remain operational when terrestrial infrastructure is disrupted by disaster, cyberattack, or deliberate interference. This use case also highlights the importance of provider choice, as the selection of infrastructure for critical communications carries significant strategic implications.
LEO satellites offer capabilities beyond connectivity, enabling real-time monitoring of weather systems, sea level changes, deforestation, and agricultural conditions. Such data can support adaptation planning and disaster early warning and rapid response systems. This could be particularly important for Pacific Island countries and climate-vulnerable sub-regions of larger countries.
Technology alone does not shape outcomes — governance does. How governments regulate market entry, structure affordability, assess provider choice, and coordinate regional frameworks will determine whether LEO satellites promote inclusive development or deepen existing inequalities.
Governments across the Indo-Pacific have taken varied regulatory approaches. Papua New Guinea and Niue initially restricted Starlink over regulatory, data sovereignty, and incumbent-protection concerns, though terminals are still imported and used illegally. Both restrictions have since been resolved, clearing the path for licensing. Some countries use licensing to align LEO deployments with national interests. Given the challenges of extending connectivity to remote areas and small islands, Indonesia is prioritising these communities by collaborating with Amazon Leo. Singapore restricts Starlink to enterprise use, reflecting a preference to maximise utilisation of existing terrestrial broadband infrastructure and reduce the risk of stranded infrastructure assets. India is crafting policy frameworks to accommodate LEO satellite services while carefully balancing competition, regulatory oversight and security obligations, and spectrum allocation requirements. Pakistan is preparing to launch LEO services under mandatory licensing, authorisation, and security compliance conditions, placing strong emphasis on national security, data protection, and regulatory oversight. Larger, middle-income countries typically have the institutional capacity to enforce such measures, while smaller Pacific Island states face greater challenges, suggesting that regional frameworks through the Pacific Islands Forum (PIF) could provide a more practical governance solution.
A key tension is the interaction between LEO satellite expansion and existing domestic telecommunications investment. Regulators face clear trade-offs: accelerating LEO satellite access may strand recent terrestrial investment, distort competitive neutrality, and undermine universal service obligations (USOs) funded by incumbents.
Looking ahead, emerging issues in data protection, data sovereignty, consumer protection, and trust are likely to pose significant regulatory challenges. Satellites are increasingly equipped with artificial intelligence (AI) that can process data onboard — rather than sending raw data back to Earth — enabling faster analysis for applications such as disaster response and land management. However, this AI layer raises governance challenges around algorithmic accountability and data sovereignty over AI-processed satellite imagery. Analytical capacity is highly concentrated in a few advanced economies, risking Indo-Pacific states becoming data sources rather than participants in AI-driven value creation.
Innovative models can reduce per-user costs. Community gateways, as deployed in Nauru and Kiribati, provide internet transit to local providers, extending connectivity to remote communities and strengthening national broadband capacity while lowering costs for households, businesses, and government services. Integration with terrestrial networks through 5G Non-Terrestrial Networks (NTN) is underway in Australia, Japan, and the Philippines, combining satellites with existing mobile infrastructure. Subsidies, such as those being considered in the United States, can further bridge the cost gap through vouchers or direct support for equipment and service fees. Emerging innovations, such as Starlink’s mobile satellite — direct-to-cell — in the Philippines, enable mobile phones to access voice, data, video, and messaging without satellite dishes. Australia’s First Nations Digital Inclusion Roadmap considers LEO satellites for underserved populations through community Wi-Fi, subsidies for key facilities (e.g. health clinics, local media, and libraries), and future direct-to-device access.
The USO provides a framework for extending connectivity to underserved areas, but its effectiveness depends on design. Poorly designed USOs can entrench incumbents and legacy technologies, limiting the integration of LEO solutions. Where USO arrangements are tied to legacy providers, they can also lock in cost structures that impede the transition to newer technologies. USOs should therefore be technology-neutral, performance-based, and adaptable. Australia’s USO, including the Universal Outdoor Mobile Obligation, explicitly incorporates LEO satellites and direct-to-device technologies to extend coverage where traditional networks are uneconomic. By embedding affordability mechanisms from the outset, governments can ensure LEO deployments reach those most in need rather than only those who can already pay.
LEO satellite networks are not neutral. Data flows through systems governed by operators’ home jurisdictions, so provider choice affects data sovereignty, intelligence exposure, and geopolitical alignment. US and China-backed constellations differ strategically, with the latter often combining connectivity with development or diplomatic incentives. For many developing nations and Pacific Island states, choice is rarely technical: it is shaped by aid availability, access to state-backed financing, and local regulatory capacity. This creates structural vulnerabilities: countries may be effectively limited to providers backed by major powers or development institutions — a pattern seen in submarine cable and mobile network investment.
Governments need frameworks to evaluate providers on data governance, security, and strategic alignment, supported by foreign policy and national security expertise. These assessments must be operationalised through enforceable measures, including supplier diversification, binding data governance agreements, and formal security reviews. Licensing frameworks also require greater specificity, particularly on where user traffic is terminated, how data localisation interacts with offshore gateway infrastructure, and what safeguards apply where operators are subject to foreign intelligence access laws.
Many governance challenges, such as regulatory frameworks, affordability mechanisms, and strategic provider evaluation, exceed the capacity of individual countries, particularly smaller Pacific Island states. This necessitates a shift from fragmented decision-making to collective mechanisms that strengthen bargaining power, including regional procurement pooling, multilateral financing, and shared Indo-Pacific acquisition frameworks. Regional platforms such as the Association of Southeast Asian Nations (ASEAN), the South Asian Association for Regional Cooperation (SAARC), and PIF provide existing mandates for digital economy cooperation and established relationships with governments, development partners, and private operators. Priorities include model regulatory frameworks and licensing standards adaptable to national contexts, and coordinated approaches for cross-border use cases. Deeper cooperation — through shared infrastructure such as gateway stations, coordinated spectrum management, and regional intelligence sharing — can further reduce costs, strengthen negotiating power, and mitigate dependence on single providers.
Connectivity alone does not ensure inclusion. Digital literacy, device access, reliable electricity, and locally relevant content are essential. Across the Indo-Pacific, many people have never used the internet and lack digital literacy — without support, connectivity mainly benefits better-educated and higher-income users. Even where community connectivity does exist, smartphones, tablets, and computers are often unaffordable, making subsidised devices or shared facilities at schools, health centres, and community hubs critical.
Reliable electricity is a further constraint, with ongoing power costs for satellite dishes often exceeding upfront device costs. In off-grid settings, households frequently rely on generators or portable solar systems to maintain connectivity. Finally, content must be relevant and in local languages — without it, access has little value. This includes e-government services, digital finance, health and education service delivery, disaster warnings, market information for farmers, and other locally useful applications. Investment in these complements is as important as the satellite infrastructure itself.
LEO satellites offer multiple development benefits beyond connectivity, including climate resilience, poverty reduction, employment opportunities, access to e-government services, health and education provision, and backup infrastructure. Deployments supporting disaster response, environmental monitoring, and adaptation planning can access climate finance, while broader development funding can support pilot programs, technical assistance, and regulatory capacity. High costs for terminals, subscriptions, ground infrastructure, and governance remain barriers for many developing countries and Pacific Island governments. Integrating LEO projects into development frameworks makes strategic sense: satellites provide resilient communications, government services, economic opportunities, and emergency coordination, while concessional funding can accelerate rollout and maximise socio-economic impact. Yet a critical development consideration is determining who captures the economic value of LEO satellites, as there is a risk that developing nations in the Indo-Pacific become passive consumers of services, while the economic benefits accrue elsewhere.
About the author
Hilman Palaon
Dr Hilman Palaon is a Research Fellow at the Lowy Institute’s Indo-Pacific Development Centre. His work focuses on digital economy issues in the Indo-Pacific region, including financial inclusion, economic empowerment, and technology innovation.
