Satcom market set for decade of expansion

As over the past few years satellite operators have adapted to shift from a video-centric market to a more data-focused market, the result has been substantial investments in network expansion and service diversification. As a consequence, satellite communications (satcom) revenues and capacity demand are expected to show significant expansion over the next decade, according to a study from Euroconsult.

The Satellite Connectivity and Video Market market intelligence report assessed three major growth prospects for the satcom industry: universal broadband access, mobility (including aero, maritime and land mobility), and defence and security applications.

The top line revealed in the study was that following several years of negative growth, satcom service revenues are set to rebound starting in 2023, the satellite communication landscape is poised for a transformative decade of growth as satellite capacity demand is projected to surge from 3.6 Tbps in 2022 to 51 Tbps in 2032, representing a 31% CAGR, with all data segments expected to observe exponential growth in the next 10 years.

In financial terms, revenues are predicted to rise from $108bn in 2023 to $123bn by 2032, totalling an estimated $1.15tn in cumulative revenues over the next decade. Fixed satellite service (FSS) revenues are also anticipated to rebound as global satellite capacity supply rapidly increases. In a competitive and increasingly data-focused market, vertical integration is crucial for recouping investments in evolving technology.

Euroconsult found that vertical integration has gained ground in recent years, characterised by the acquisition of service providers, satellite manufacturing and investments in user terminals. Market dynamics continue to evolve, with recent months seeing notable consolidations, such as the completion of the Viasat-Inmarsat merger and the Eutelsat-OneWeb merger, soon expected to be approved.

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The report also identified new satellite technology as a catalyst for improved economics, including lower capacity pricing and the capacity to provide higher provisioning rates per site and expanding availability of unlimited data plans.

Euroconsult said these advancements will be pivotal in meeting the burgeoning demand for satellite capacity, particularly in segments like enterprise networks with cloud applications and the largely untapped land mobility market.

Euroconsult also predicted global satellite capacity supply is on the brink of a dramatic increase, with a 62% rise in 2022 alone, reaching 15 Tbps, primarily driven by Starlink.

Anticipated to reach nearly 200 Tbps by 2028, this expansion coincides with the introduction of new non-geostationary orbit (NGSO) constellations, particularly in the low Earth orbit (LEO), including Telesat Lightspeed and Amazon Kuiper, alongside Gen 2 constellations for Starlink and OneWeb, and very high throughput satellite (VHTS) deployments like Viasat-3, Jupiter-3 and Satria-1. Consequently, said the study, the share of NGSO in the total supply is forecasted to surge from 76% in 2022 to over 95% post-2026.

“The satcom industry finds itself in a dynamic phase following substantial investments in satellite infrastructure, presenting both fresh opportunities and heightened competition,” said Euroconsult managing consultant Dimitri Buchs.

“The forthcoming wave of new satellite infrastructure will herald a transformative era for satellite operators, necessitating strategies to recoup investments. This entails a focus on vertical integration to optimise costs and scale, coupled with value-added services that enhance proximity to customers and end users, alongside a concerted drive toward emerging and high-growth market segments.”

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