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Satellite Connectivity and Video Market 2021

28th Edition

Key Highlights 2021 - Trends in the Segment

 The satcom industry has continued and perhaps accelerated its deep transformation in 2021 in an increasingly competitive environment and with the impact of the COVID-19 crisis not yet in the rearview mirror. The recently announced merger between Viasat and Inmarsat, the strategic partnerships involving Amazon, Microsoft, Google, and several satellite companies as well as the acquisitions made by several leading players to optimize their operations are all emblematic of changes in the ecosystem.
  The recent vertical integration trend has contributed to a growing number of operators offering end-to-end services. In 2021, more than 1/4th of industry players offer end-to-end services, this share is expected to increase in coming years.
   The rapidly growing importance of NGSO in connectivity markets is impacting the satcom industry, with an increasing number of players looking at a multi-orbit strategy to expand their business. The past 12 months have seen a lot happen on the NGSO front, from new constellation orders (Telesat Lightspeed) to the start of service for Starlink and Eutelsat’s investment in OneWeb.

•   The digitization of infrastructure and operations is accelerating, with a large part of the new GEO satellites being procured having software-defined payloads, with the virtualization of the ground segment also on the industry agenda. In 2021 (until the end of November), 60% of the 10 GEO satellites ordered include a flexible payload. In 2020, only 2 such satellites had been ordered.

2016-2020 Past 5-year review

Historically, satellite capacity was considered a scarce resource. Satellite operators carefully managed the supply and demand balance to optimize capacity lease rates and maximize revenue. Following the introduction of High Throughput capacity, this balance has been disturbed. The influx of new HTS capacity caused oversupply in a number of regions. Moreover, the lower cost base of HTS capacity resulted in lower capacity prices available on the market.

 

As a result, the satellite capacity market experienced a massive price reset, reflected in the average capacity price dropping by 53% between 2016 and 2020.

Meanwhile, satellite operators have not been able to scale up demand to compensate for the price reset, causing the negative revenue growth trend as we have observed from 2016 to 2020. This downward trend has been exacerbated with the negative impacts of Covid restrictions in 2020.

Addressable Market Opportunities

The growing demand for being connected “anywhere, anytime” with high bandwidth is opening new markets for the industry and pushing satellite operators to reposition their investments toward new growth segments. Satellite operators are heavily investing in HTS systems (GEO and NGSO) which are best positioned to address broadband market demand. HTS capacity revenues are projected to progressively grow and surpass regular FSS capacity revenues by 2024 before reaching >$16.5b in 2030 (81% of total revenues).

 

To be specific, global ambition for universal broadband access offers the largest upside potential for the industry. VSAT services such as cellular backhaul, DTH broadband access and community Wi-Fi hotspots are increasingly deployed globally. The mobility markets offer significant growth opportunities. ~251,300 commercial vessels and airplanes are operating beyond the reach of terrestrial networks and currently only a fraction of the total are using satellite links for continuous broadband connectivity.

World Map of Satellite Capacity Supply

Key Conditions for Revenue Growth

Satellite Capacity Market: Video vs. Voice & Data Forecasts

The growing demand for being connected “anywhere, anytime” with high bandwidth is opening new markets for the industry and pushing satellite operators to reposition their investments toward new growth segments. Satellite operators are heavily investing in HTS systems (GEO and NGSO) which are best positioned to address broadband market demand. HTS capacity revenues are projected to progressively grow and surpass regular FSS capacity revenues by 2024 before reaching >$16.5b in 2030 (81% of total revenues).

 

To be specific, global ambition for universal broadband access offers the largest upside potential for the industry. VSAT services such as cellular backhaul, DTH broadband access and community Wi-Fi hotspots are increasingly deployed globally. The mobility markets offer significant growth opportunities. ~251,300 commercial vessels and airplanes are operating beyond the reach of terrestrial networks and currently only a fraction of the total are using satellite links for continuous broadband connectivity.

Satellite Connectivity and Video Markets is an essential tool for operators, service providers, suppliers, manufacturers, launchers, and investors. The report provides an in-depth analysis of the conditions driving demand by market segment. With both a qualitative and quantitative perspective, it breaks down demand by region, application, and system type.

The report includes historic numbers for capacity supply, capacity leased, capacity revenue, and the cost of capacity per unit as well as ten -year projections of these numbers in the future.

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