Market Overview
The global satellite internet and mega constellations market size is expected to grow at a CAGR 6.7% during the forecast period, 2023–2031.
Scientists predict that the number of satellites in the low-earth orbit (LEO) providing global broadband internet will increase from 200 in 2019 to 700 in 2020. 2,000 of more than 8,700 objects launched into space since the start of the Space Age are satellites actively orbiting the earth. These orbiting broadband stations most commonly referred to as “mega-constellations” are expected to add more than 16,000 individual satellites to that count during the forecast period. The motive of the Satellite Internet technology is to connect those in the unserved areas of the earth. Statistics show that many people in certain areas of the globe are still unconnected or under-connected. As per the International Telecommunications Union (ITU), only 51% of the world’s population was using the internet as of the end of 2018. Many developed countries also lack access to the universal tolerable internet speed. A US Federal Communications Commission (FCC) report recently revealed that approximately 21.3 million Americans do not have a proper broadband internet connection. That is a lot of potential revenue for companies offering internet technology to connect them. The satellite internet market is anticipated to grow over USD 400 billion or 40% of the trillion dollar global space industry in the forthcoming years
Market Dynamics
Getting into orbit has become affordable
Technological advancements have made new launch services possible, thereby dramatically decreasing the satellite construction and launching expenses. The average cost of launching a satellite into orbit during 1970s till the early 2000s, was about USD 18,500 per kilogram. However, with the advent of new launch providers such as SpaceX, the costs have narrowed down to about 85% less. Furthermore, with improvements in launch economics scientists are now designing less weight satellites which could be easily launched into outer space. A stark comparison between the Iridium satellites launched in the late 1990s that weighed 689 kilograms each, and today’s Starlink satellites that weigh only 227 kilograms showcases the ability of modern technology and product makers to put hundreds of small sized and cost effective devices in space which will drive the space internet and mega-constellations market
Advancements in manufacturing methods
It is a time consuming process to build constellations of individual satellites at a reasonable cost. Therefore, companies are adopting a modular design approach for constructing the satellites using advanced miniature components. There is also a rising trend of electrical propulsion systems that efficiently accelerates small sized spacecrafts allowing engineers to construct devices at lower costs. Aerospace company Airbus and global communications company OneWeb, have entered into a joint collaboration ‘OneWeb Satellites’ with an aim to produce two satellites per day. Dedicated factories for the manufacturing of these mega-constellations that offer cost-effectiveness and speed simultaneously is significantly driving the market growth
Growing demands for a better connectivity
Demand of a high speed and reliable internet connectivity is rising from both the unserved and under-served category of users. As new technologies have connected the population in the world’s remote and less-developed areas, demand is being driven by growing expectations. In addition to this, rising penetration of smart devices and affordability by the low income countries will propel the market growth during the forecast period
High cost of infrastructure
High competition from low-priced, high-speed satellite broadband in a major restraint in the business of terrestrial providers. The initial cost of building a satellite infrastructure is very high. Every large satellite launch requires at least one satellite trail, which is a challenge for engineers. Other challenges include the adjustment of the orbital height of the satellites and reduction in flares on the ground. Therefore there is a requirement of high investments in R&D to come up with ways to dampen the reflectivity of its satellites, by first coating one satellite and then adding a visor to others. Recently many telescopes are shut down due to the COVID-19 pandemic which is another restraining factor in the space internet market growth
Interference
Moisture and other forms of precipitation such as rain or snow hamper the signal path between ground stations and the communication satellites. Extra communication links are needed to account for signal degradations due to moisture and precipitation. Modern consumer-grade antennas are small which reduces the rain margin and increases the required satellite downlink power and cost. Modulated carriers can be dynamically altered in response to unclear skies and rains. Therefore, it is economical to build an expensive smaller satellite and consumer antennas
Emergence of new players will open new opportunities for the market growth
Starlink, satellite internet constellation being constructed by SpaceX is anticipated to bring annual revenue of USD 30 billion in the near future. In addition to the low latency, broadband internet Satellites there is also other purpose spacecrafts to be launched by SpaceX over the next decade. Innovations such as small size and low cost satellites, coupled with a surge in government investment, is expected to boost the satellite internet technology market by increasing the number of these launches. Satellite networks with internet speeds are very lucrative compared to the Earth-bound fiber optic networks. More and more rural areas will enjoy high speed internet. The Federal Communications Commission (FCC), estimated that around 14 million rural Americans, as well as 1.2 million Americans on tribal lands do not have access to even the slowest mobile broadband services. Today, a relatively small population of consumer have access to the space internet which is very expensive. Therefore, innovations in aerospace and emergence of new players will play an important role in serving internet facilities to the most unconnected parts of the planet, thereby accelerating the popularity of satellite internet and mega-constellations market
Regional Analysis
North America to lead the market during the forecast period
Internet access is ubiquitous in the United States and is significantly growing with the presence of key vendors such as AT&T Internet Services, Sparklight, CenturyLink, and others. The emergence of satellite internet providers such as HughesNet, ViaSat, and SpaceX is likely to change the game in the coming years. The entrepreneurs in Silicon Valley have realized the importance of connecting the world and the huge business opportunities it can provide. SpaceX has been approved by the U.S. FCC to launch 12,000 satellites in the orbit. The company is anticipated to start offering its service to customers in the United States as early as 2020. OneWeb is also creating a network of low-earth-orbit satellites. The company may begin its satellite broadband internet services starting 2021
Segmental Analysis
Two-way satellite Internet includes both sending and receiving data from a small-aperture terminal (VSAT) via satellite to a hub telecommunications port. The satellite at each location must be precisely pointed to avoid interference with other satellites. The Two-way satellite Internet can be further classified into Time Division Multiple Access (TDMA) and single Channel Per Carrier (SCPC). VSAT terminals are a 60–100 cm dish and are intended for consumers, small business and larger systems which provide more bandwidth. They are commonly known as "satellite broadband" and is highly expensive. End users of the two-way satellite Internet can range from individual home users with one PC to large remote business sites with several PCs
The deployment of mega-constellations of broadband internet services will bring affordable high-speed internet services to various end-users such as businesses, governments, schools, and individuals around the world. The transport sector is expected to gain better connectivity, followed by communication for IoT devices, direct-to-consumer services, and other emergency responses
Top Key Players
Telesat
Kepler Communications
LeoSat
SpaceX
OneWeb
SES (O3b)
Space Norway
Others
