While the broadcast element has declined, this is being offset by the growth in the data services segment. A report by global strategists Euroconsult has captured these revealing trends, while incorporating defense market opportunities in this area, along with the impact of COVID,
The accelerating demand for consumer broadband and mobile has resulted in the user terminal market providing major growth opportunities, with value predicted to more than double to $2.7 billion in 2030.
There is a need for more ground station facilities positioned to take advantage of the proliferating LEO SATCOM market, along with the historical lack of funding at mid-latitudes, resulting in a more recent large increase in ground stations at locations more diverse than previously developed. Uniquely, for this domain, the defense market is also assessed, detailing extensive US opportunities and the lesser demand in Europe and Asia.
The peak investment in user terminals coincided with Middle Eastern conflicts, with slightly lower investment in recent years. This situation is expected to change from 2023, with new investment in the billions of dollars expected.
The impact of commercial services such as Starlink and OneWeb on the military market is expected too.
The impact of COVID with the user terminal market being more affected due to the reduction in activity in transport and enterprise is there. The 2020 market for user terminals is estimated at $400 million lower than the 2019 market because of COVID, although this will recover as enterprise increases. For Ground Stations, a direct impact on market revenues due to COVID is not seen, but delays in the equipment supply chain are observed. In the Earth Observation market, the ground station segment actually increased.
A large market opportunity in the ground segment, along with the continuous innovation to improve performance and cost efficiency exists. This improvement drives the ongoing adaptation of the ecosystem, with an acceleration in the number of M&A transactions and strategic partnerships to be signed over the next two years.
Pacôme Revillon, Euroconsult CEO, said, “The ground segment ecosystem is at a turning point, driven by technology innovation and changes in demand patterns from private and government clients. We have strengthened our research and strategic analysis to capture the unique dynamics of the ground segment industry.” Analysis of the broadcast segment indicates major changes in the next decade via terrestrial competition, a temporary boost to the market as a result of frequency reallocation in the US and the growth in the data (broadband internet and IOT) sectors. With newer High Throughput Satellites (HTS), new antennas will be needed to track mega constellations, driving a huge demand in new frequency needs. The report looks at the growth in the size of ground stations to cover this, along with the renewal and retrofit markets related to existing infrastructure.”
Euroconsult consultant, Alexandre Corral, said, “With a recent trend to virtualize Ground Stations to enable greater flexibility, the report explains how this is especially relevant to the areas of Earth Observation and mega-constellations, as it is expected to drive down costs with a shift of specific Ground Station functions from CAPEX to OPEX as more functionality can be moved into the cloud e.g. Earth Observation and Internet of Things (IOT) utilizing Amazon Web Services and Microsoft, virtualizing the services in line with Ground Station as a Service trends.”