The satellite industry is at the cusp of rapidly expanding its total addressable market and playing a much more critical role in the greater telecom ecosystem, with changes brought about by the lower cost per Mbps enabled by HTS capacity. This is the core finding of NSR’s industry leading Global Satellite Capacity Supply & Demand, 14th Edition (GSCSD14) study, released today. The study provides analysis for both supply and demand, and subsequent leasing revenues for satellite capacity moving forward. The study finds that despite a decline of over $2 billion in annual FSS leasing revenues (driven by both C-band and Ku-band declines), the industry will be redefined by the promise of HTS capacity, seeing HTS revenues increase tenfold from 2016-2026, culminating in a $17 billion annual market by 2026.
In looking at all planned and expected HTS launches, “we expect HTS capacity to exceed 17 Tbps by 2026, with around 60% of this capacity coming in the form of one, or more, LEO-HTS constellations. GEO-HTS will claim 7 Tbps, with most of this capacity coming on Ka-band GEO-HTS payloads launched in all regions,” noted Blaine Curcio, NSR Principal Analyst and report author. “Ultimately, this will expand the total addressable market for satellite, with verticals such as wireless backhaul, commercial mobility, and consumer broadband seeing exponential increases in demand. Even factoring in a significantly lower price point than today, there is huge revenue growth opportunity,” adds Curcio.
The satellite industry will, moving forward, find itself in many positions where growth will need to be scalable. Indeed, when launching satellites with tens of times the throughput of previous satellites, operators need an effective way to move much more capacity than they were selling previously. “This will lead to operators forging closer ties to telcos, service providers, integrators, etc.--basically, companies who have the infrastructure to move a lot of capacity,” states Curcio. “I believe that SoftBank—one of the world’s largest telcos—investing $1.4 billion into OneWeb, and the company’s subsequent interest in Intelsat, is not the last time we will see a telco looking at a satellite operator as a strategic asset in a world increasingly based on global connectivity. Though it certainly is a vote of confidence for the industry”, said Curcio.
NSR’s GSCSD14 study tracks recent developments on both the supply and demand side of the market, including funding for new satellites by national-level governments, and CAPEX expansion plans of established operators, both global and local. Segmenting capacity among FSS C-, Ku-, and Ka-band, GEO-HTS C-, Ku-, and Ka-band, and Non-GEO-HTS, NSR’s study sheds light on the markets most likely to experience dramatic expansion due to elasticity of demand, while also examining macro factors that are causing some markets to settle into stagnant to negative growth. Finally, the study examines factors that the industry must emphasize in order to realize these growth rates, with technological change, new business models, and competitive dynamics being discussed.