According Euroconsult's latest report, Prospects for L-Band, IoT & M2M Markets, the Mobile Satellite Services (MSS) market will grow from 4.3 million MSS terminals in 2016 to more than 12 million terminals by 2026. M2M/IoT (machine-to-machine, Internet of Things) devices will have a significant share in this subscriber growth, while their contribution to operators' revenues should be more limited. MSS wholesale revenues are expected to grow at a CAGR of 2.2% between 2016 and 2026, driven by MSS aero broadband demand, M2M/IoT applications and other MSS services increasingly addressing lower-end segments and emerging regions, such as the promising small boats segment.
The diversification and improvement in MSS products should be enabled by recent and upcoming MSS systems including Iridium NEXT (under deployment), Inmarsat's I-6 (expected in 2020), Thuraya's next generation constellation (planned for 2020 but no satellite yet ordered) and a new generation of hybrid networks from Globalstar and Ligado Networks. These systems should allow for new, higher data-rate services, and will combine with new ground solutions and terminals.
"Increasing competition from VSAT mobile solutions, due to more efficient equipment and lower capacity costs, is expected to weigh on MSS's market share in the high-end, high-ARPU markets," said Pacôme Révillon, CEO of Euroconsult. "MSS operators will thus have to review their positioning and address new segments less addressable by VSAT solutions, such as smaller classes of ships, aircraft, not to mention potential upsides related to connected cars and IoT."
The global IoT market, including terrestrial IoT, should experience exponential growth in the coming years; MSS operators are reinforcing their position in the segment, with the number of M2M/IoT terminals reaching over 20% growth in just the first half of 2017. Moreover, about ten constellation projects targeting IoT are currently under consideration by start-ups, intending to benefit from the momentum of the sector.
Single-digit growth is expected for the global MSS market, despite lower global MSS ARPUs over the period due to increasing VSAT competition:
Maritime MSS wholesale revenues are expected to decrease with a -2% CAGR over the next ten years, an effect of the migration toward VSAT solutions in the medium to high-end maritime markets, while low ARPUs of small boats should not offset that churn.
The land market is expected to grow at a fast pace in number of terminals at a 10-year CAGR of 12%, with growth led by the increasing demand for M2M/IoT terminals.
Driven by strong growth in broadband terminals from business aviation as well as cockpit connectivity for commercial airlines, aeronautical wholesale revenues are expected to increase with a 4% CAGR over the coming decade.