Mbps is capacity. Think of a water system of pipes...how many gallons of water can be put through per second. Latency is how long it takes to turn on the water.
So, high latency and high mbps = wait a second for image to start to load, once it does, image loads really fast.
Low latency and low mbps = image begins to load immediately but takes forever for the whole thing to appear.
One problem with existing satellite internet (or phone) is that the signal has to travel to and from a satellite thousands of miles above the equator causing a ~500ms (half second) delay or lag which is noticeable in voice or video calls, ssh sessions, games and even browsing the web. You'll press a key and it will take half a second for it to register, or say something and not be heard right away.
Getting this down to ~100ms puts it in the range of terrestrial communication and will make things much less noticeable.
Well, simply put, there's more to a good user experience than having some high Mbps. For example, if your latency is high then loading a web page with fifty small pictures will take longer than one really big picture.
On your phone, when chatting with someone, the connection will be really choppy.
Think of it as having a car that can go really fast in a straight line, but it takes a really long time to make any left or right turns.
