Satellite Communication Market

Market Overview

The global satellite communication market size was valued at USD 71.57 billion in 2021. It is expected to reach USD 160.65 billion by 2030, growing at a CAGR of 9.4% during the forecast period (2022–2030). The rising demand in government and military services favors the market growth by 2030.

A satellite is a communication system that can receive signals from the earth at one location and transmit them to another using a transponder. In space, it can operate at temperatures ranging from -150 to 150 degrees Celsius. Its many government and commercial applications include remote voice and data services, in-flight entertainment, asset tracking, monitoring, and telemedicine. The media and communication industry relies heavily on satellite communication. The satellite communication sector's value chain includes numerous market participants, such as satellite manufacturers, satellite launchers, satellite operators, satellite service providers, ground network providers, and end users.

To manufacture and assemble satellite communication systems, satellite manufacturers must first procure raw materials from suppliers. Multiple parameters are used to test and demonstrate the assembled satellites to ensure their resilience and strength for a longer time in space. Additionally, satellite launching organizations launch the assembled satellite systems. Among them are the National Aeronautics and Space Administration (NASA), the Indian Space Research Organization (ISRO), the China National Space Administration (CNSA), and the European Space Agency (ESA). Additionally, satellite operators can control the launched satellites from one of three orbital planes: geosynchronous or geostationary orbit (GEO), medium Earth orbit (MEO), or lower earth orbit (LEO). Regarding providing satellite services to end-users, satellite operators and service providers can be comparable. Service providers and end users must install network providers' satellite equipment to obtain high-speed, uninterrupted satellite communication services.

Market Dynamics

Market Driving Factors

Rising Demand in Government and the Military Services to Aid Growth

The ubiquity and security provided by satellite services have resulted in a substantial increase in interest in satellite communication. Governments of developing and developed nations, including the United States, China, and others, focus on establishing a robust communication infrastructure to supplement their military and defense capabilities. The U.S. Government, particularly the U.S. Department of Defense, is the single largest consumer of commercial satellite communication (DoD). In addition, there has been a steady increase in global military/defense spending over the years, contributing to the global expansion of military satellite communication services. The secure bandwidth capacity provided by satellite communication services is ideal for military operations conducted in remote locations with inadequate and unreliable communications infrastructure. In light of this, it is anticipated that the revenue generated by Fixed Satellite Services (FSS) used in government and military applications will increase significantly in the coming years.

Moreover, governments worldwide are integrating commercial satellite capabilities into their military communication systems. This is a result of the government's increasing efforts to support the growing communication needs of various applications, such as Airborne Intelligence, Surveillance, and Reconnaissance (AISR) and Communications On-The-Move (COTM). Satellite services offer excellent coverage that is both omnipresent and consistent for these services.

Rising Use of Satellite Communications for Mobile Applications to Favor Market Growth

Satellite communications offer robust and ubiquitous connectivity across a vast geographical area. Therefore, Satcom is favored in various applications across industries, including maritime and aviation. The increasing demand for satellite broadband connectivity for such mobility-based applications is anticipated to drive the demand for satellite communication services over the forecast period. Satellite broadband services are in high demand in the maritime industry across all marine market segments, including merchant shipping, leisure yachts, cruise ships, container vessels, fishing vessels, and offshore applications.

In addition, the International Maritime Organization's (IMO) regulations, such as the Safety of Life at Sea (SOLAS) convention and Global Maritime Distress and Safety System (GMDSS), are contributing to the expansion of the market. In the aviation/aeronautical industry, in-flight or cabin connectivity has been in high demand for the past few years. Commercial and business aviation contributes to the growth of demand for in-flight connectivity services. As a result, aviation companies are increasingly collaborating with Satcom service providers to adopt satellite communication technology. Therefore, the continuous and collaborative efforts of the players in the marine and aeronautical industries to adopt satellite communications technology are expected to propel the growth of the global satellite communication market over the forecast period.

Key Market Opportunities

Increasing Demand for 5G Services Across the Globe to Spur Market Opportunities

A high growth rate in the deployment and adoption of 5G communication services has been observed and is expected to continue for the foreseeable future. Terrestrial network infrastructure is increasingly being deployed to support 5G functionality by telecommunications companies that are highly focused on expanding their presence in the 5G market. Satellite technology could benefit from the rapid expansion of 5G wireless technology. Wireless telecommunications providers frequently use satellite communication services to expand their networks in sparsely populated regions. As a result of satellites, telecommunications providers can now offer fixed and mobile networks to areas where terrestrial networks are unable or unwilling to serve. Satellite communication becomes the most viable and preferred alternative whenever terrain, line-of-sight, or distance precludes any other type of backhaul. New generation Low Earth Orbit (LEO) constellations offer reduced latency in satellite communications, and technical advances in Geostationary (GEO) satellites provide high throughput and improved robustness to the ecosystem of satellite communication.

Furthermore, the benefits of 5G, such as high speed, low latency, and improved connectivity, offer enormous opportunities for satellite growth. Additionally, 5G presents growth opportunities for satellite communications in areas such as backhauling services, enhanced security, resilience, availability, and improved disaster recovery/emergency response communication.

Regional Analysis

The global satellite communication market is segmented into four regions, namely North America, Europe, Asia Pacific, and LAMEA.

North America dominates the global satellite communications market during the forecast period. The widespread use and high demand for satellite services in the area are to blame for this. In addition, the region is characterized by many market participants, including Viasat, Inc., Echo Star Corporation, and Telesat. Additionally, the high demand for Satcom equipment and services from the U.S. government and defense industry, particularly the U.S. Department of Defense (DoD), contributes to the market's high share and growth. North America, Europe, and Asia-Pacific are anticipated to witness significant growth.

Segmental Analysis

The global satellite communication market is segmented into component, application, and vertical.

By Components

Based on components, the global market is divided into equipment and service.

The services segment holds the most significant global satellite communication market share and is expected to grow at a CAGR of 8.2% during the forecast period. DTH operators, telecommunication companies, and end-users extensively use satellite communication services. The defense and maritime sectors rely heavily on satellite communication services for resilient and dependable communications. In addition, the high usage and demand for satellite broadband services among various enterprise and individual customer applications are anticipated to expand satellite communication services in the coming years. Satellite equipment includes SATCOM transmitter/transponder, satellite receiver, satellite antenna, satellite transceiver, and satellite modem/router, among others. The high growth of this segment can be attributed to the reducing cost of the equipment associated with satellite communications. The increasing number of use cases coupled with the increasing inclination and ease to deploy satellite equipment is anticipated to provide significant growth opportunities for the Satcom equipment segment.

By Application

Based on application, the global market is divided into asset tracking/monitoring, airtime, drone connectivity, data backup and recovery, navigation and monitoring, telemedicine, and broadcasting.

The broadcasting segment held the largest market share in the global satellite communication market, growing at a CAGR of 10.5% during the forecast period. Also, the segment is anticipated to continue its dominance in the overall market over the forecast period. This segment's high share and growth can be attributed to the elevated use of satellite broadcast services, including television and radio, primarily for media applications. The benefits of satellite broadcasting, including seamless connectivity even in remote and hard-to-reach areas, are the primary factor for the segment growth. In addition, satellite communications are gaining traction in establishing machine-to-machine (M2M) communications in numerous industries, including the automotive sector. Consequently, the increasing demand for a well-established, uninterrupted, and pervasive communications network for various data, voice, and M2M applications is anticipated to drive the market's airtime segment growth.

By Vertical

Based on the vertical, the global market is divided into energy and utility, government and defense, transport and cargo, maritime, mining, oil and gas, agriculture, communication companies, corporates/enterprises, media & broadcasting, events, aviation, environmental & monitoring, forestry, the end user – consumer, and healthcare.

The media and broadcasting segment dominated the market in revenue and is expected to grow at a CAGR of 10.5% during the forecast period. The high share of this segment can be attributed to the high use of satellites for broadcasting services, even in remote areas. Further, satellite communications are increasingly used in the government and vertical defense segment. Governments worldwide are investing heavily in developing a robust and comprehensive communications infrastructure for mission-critical applications, such as Intelligence, Surveillance, and Reconnaissance (ISR), and providing Communications On-The-Move (COTM). In addition, satellite communications offer reliable communication capabilities for emergency response and disaster relief. Moreover, satellite communication services are also used in other prominent industries such as maritime, energy and utility, aviation, and corporates.

Recent Developments

• April 2022- Viasat Selected to Deliver Real-Time, Near-Earth Communications for NASA's Communications Services Project. New Real-Time Earth Space Relay Service Provided Resilient, Flexible, and Scalable Communications Links for Optimized Data Transfer of LEO Space Missions.
• April 2022- Viasat Partnered with the Košice Region of Slovakia; Donated Satellite-Based High-Speed Internet to Ukrainian Refugees.
• April 2022- SDT Ingenieria to Conneced Schools in Colombia with Internet Access from Hughes. Hughes equipment and satellite capacity to power internet service in 670 schools in the Antioquia school district
• March 2022- Marlink and Intelsat extend their partnership to increase bandwidth capacity for maritime customers. Marlink, the smart network company, has extended its partnership with Intelsat to offer increased Ku and C-band satellite connectivity to cruise and merchant shipping maritime customers.