Novaspace, a leading space consulting and market intelligence firm formed by the merger of Euroconsult and SpaceTec Partners, has released its latest edition of the ‘Satellite Connectivity & Video Market’ report, revealing significant shifts across the SATCOM industry.
The past three years have seen a dramatic, eight fold increase in global satellite capacity supply, reaching around 27 Tbps in 2023, a figure that is accounted for more than 80% by Starlink. This dominance can be partially attributed to delays from initial target dates from most other constellation projects and software-defined satellites. However, new LEO constellations, such as Telesat, Lightspeed, and Amazon Kuiper, alongside second-generation Starlink and Eutelsat OneWeb constellations, as well as Very High Throughput Satellites (VHTS) such as Viasat-3, are expected to drive growth to 260 Tbps by 2029.
The rise of Non-Geostationary Satellite Orbit (NGSO) systems has caused a decline in orders for GEO satellites, as operators have adopted a “wait and see” approach. Despite this, GEO capacity still represented approximately 85% of capacity revenues in 2023, though NGSO capacity revenues are projected to grow at a Compound Annual Growth Rate (CAGR) of 27%, surpassing GEO revenues by 2028 and bringing in around $18 billion by 2033.
GEO-High Throughput Satellite (GEO-HTS) systems continue to maintain significant traction in premium market segments, such as MILSATCOM, aeronautical connectivity, and certain areas of fixed broadband, particularly those requiring high uptime or Committed Information Rate (CIR)-based Service Level Agreements (SLAs). However, Starlink accounted for 70% of total HTS traffic in 2023, intensifying competition in key markets like consumer broadband and maritime, further challenging traditional GEO players in these segments.
In response to rising competition, satellite operators are also pursuing vertical and horizontal integration strategies. This includes two significant closed merger and acquisition deals in 2023 – Viasat’s acquisition of Inmarsat and Eutelsat’s merger with OneWeb – as well SES announcing it was acquiring Intelsat in 2024, with regulatory clearances expected to be received in 2025.
Consequently, the rising competition should contribute to the Average Revenue Per Unit (ARPU) for satellite capacity falling below $100 per Mbps per month across most segments by 2033. This price decline is set to unlock new opportunities in rural, remote, and under-connected areas, including those near urban centers and over oceans, driving global capacity demand to 73 Tbps by 2033 (27% CAGR).
The industry’s total service revenues are thus projected to reach approximately $117 billion by 2033, capturing the expanding addressable market. However, the anticipated return to growth in service revenues may be delayed due to a continued rapid decline of the video segment in mature digital markets and a stagnation in previously growing emerging markets, such as South Asia. Additionally, delays in the deployment of NGSO constellations and VHTS capacity have also slowed service revenue growth in key data segments such as Enterprise Networks.
“Facing a shifting landscape marked by declining demand for video broadcasting, fluctuating mobility market patterns, and an influx of capacity from NGSO constellations, satcom operators have been exploring different strategies to survive,” said Dimitri Buchs, Manager at Novaspace and lead author of the ‘Satellite Connectivity & Video Market’ report. “In order to expand market reach, diversify service offerings, and enhance business resilience, capacity providers have been increasingly forming ‘multi-orbit’ partnerships. Market segments with lower price sensitivity, such as aero In-Flight Connectivity (IFC) and military communications are expected to drive the majority of demand for multi-orbit connectivity solutions. Overall, multi-orbit service revenues are anticipated to reach nearly $5 billion by 2033.“
