The rapid pace of change in the satellite industry has consistently pushed operators to pivot their business models, be it via declines in capacity pricing, more competition, and more recent growth markets such as aeronautical and maritime. As the industry and end-users struggle with arguments such as Ku- vs. Ka-band or GEO-HTS vs. LEO-HTS, an important and often neglected part of the success equation is the ground segment technology.

NSR’s Commercial Satellite Ground Segment report took a deep dive in assessing the revenue opportunity these changes in the space segment bring to the ground segment industry.  The report found that while mass markets like DTH drive overall industry revenues and equipment shipments, advancements in satellite mobility ground equipment – end-user terminals and antennas - form critical steps for the industry to move forward. 

In the report, both fixed and mobile satellite services were studied, and NSR found the cumulative revenue generation opportunity for satellite mobility ground equipment by the end of 2025 is $14.1 billion. An interesting dynamic noted in this study (and in a previous article) was that despite contributing only 0.5% of cumulative equipment shipments within the global satellite ground equipment industry, satellite mobility ground equipment will account for 14% of cumulative satellite ground segment revenues from 2015-2025. Aeronautical VSATs and equipment will be the major contributor to satellite mobility ground equipment revenues, due to their higher pricing and the high rate of market penetration observed by NSR, assisted largely by the ‘need to be connected’ attitude of flight passengers driving the demand and cheap capacity in abundance feeding the supply.   

The challenges for the satellite mobility ground equipment manufacturers are however manifold, with the technology and economics curves mostly not matching, with the shelved Boeing-Panasonic being an example where a Panasonic top official quoted the reason for this decision being airlines not currently willing to pay for the higher cost of more efficient antennas. The onslaught of satellite capacity in different orbits and frequency bands is compounding the problems for ground equipment manufacturers as they grapple to design precise antenna pointing, dynamic tracking capabilities, dual-band terminals, fast beam switching, gain stability, loss in efficiency due to oversaturation of beams, and trading-off on issues like size, weight, power and heat, to name a few. The problems compound when these units need to be certified, and also standardized in case of Ka-band due to the wide bandwidth and different frequencies of operation, which increases the lead time to market and henceforth becomes a pivotal factor for the market success of current and next generation HTS systems.

But the satellite industry has been proactive lately in accounting for ground equipment availability when assessing their technology-market fit, as seen through many industry partnerships and especially in the case of emerging flat panel antennas for communications-on-the-move, with Kymeta-Panasonic-Intelsat, Phasor-Intelsat, and Thinkom-GoGo being a few notable partnerships. As managed services become a central part of business strategy due to the higher margins on revenues through value-adds and offsetting of depreciating capacity costs, NSR believes such ground equipment provider partnerships for co-development of products will be pivotal for closing the business case in emerging and new market verticals in satellite mobility. 

 

Bottom Line

New technology calls for more new technology, and the satellite ground equipment market, being upstream technology driven, acts as a critical support system for the overall satellite industry ecosystem. NSR research show this opportunity is massive, and partnerships are expected to pave the way for faster product development to capitalize on this opportunity.

One must however not forget the learning from past experiences of the satellite industry, that the fate of billions of dollars invested by satellite operators globally effectively lies in the timely success of technologically-economics fit of the ground equipment, making it the unsung hero of satellite mobility, as it undergoes transformation, both on the technological and business model fronts.