Satellite operators are navigating a new era of abundant capacity brought about by next-generation LEO, MEO, and GEO satellites. To succeed, operators must adapt their business models, explore convergence opportunities, and capitalize on emerging markets, according to Christopher Baugh, Partner, space and satellite, Research and insights lead at Analysys Mason.
The size of the satellite communication market is expected to reach $192.27 billion by 2032 from $85.66 billion in 2023, growing at a CAGR of 9.4 percent during the forecast period (2022–2032), according to another industry report.
Here are strategies for satellite operators in this evolving landscape:
- Adopt Multi-Orbit Strategies for Resilience and Performance
With the shift to abundant satellite capacity, multi-orbit strategies are becoming essential. By integrating GEO, MEO, and LEO assets, operators can combine the advantages of each orbit, such as LEO’s low latency with GEO’s wide coverage. Multi-orbit operations can enhance service quality, mitigate congestion, and address varied user demands across markets like rural broadband, IoT, and corporate data services.
- Explore Convergence with Adjacent Space Sectors
The convergence of satellite communications with sectors like Earth observation (EO), navigation, and IoT presents significant growth opportunities. By developing payloads that can support multiple applications, operators can expand revenue streams. For example, combining satellite communication and EO data can serve sectors like agriculture, maritime, and environmental monitoring, while IoT integration can unlock new value in asset tracking and remote sensing.
- Diversify Revenue with Downstream Analytics and Data Services
As EO data becomes commoditized, satellite operators can focus on downstream analytics and data productization to create differentiated offerings. Developing analytics capabilities allows operators to add value by providing actionable insights, catering to industries like agriculture, logistics, and government. These value-added services can generate more consistent revenue than raw data alone, especially in the commercial EO market.
- Create Partnerships with Cloud and Technology Providers
Given the growing reliance on cloud infrastructure, operators can establish partnerships with cloud providers (e.g., Amazon Web Services, Google Cloud) to integrate satellite connectivity into cloud-based services. Partnerships enable operators to reach a larger customer base and offer seamless data management, storage, and analytics services, particularly for enterprise clients. Amazon Kuiper’s integration with AWS is a prominent example, as it merges satellite connectivity with cloud infrastructure.
- Expand Direct-to-Device Communication
With advancements in LEO and MEO satellite technology, operators can offer direct-to-device connectivity, which opens up significant opportunities in sectors like mobile communications, IoT, and emergency services. Direct-to-device capabilities eliminate the need for ground-based terminals, allowing operators to serve markets where infrastructure is limited, such as remote and maritime regions. SpaceX’s Starlink is pioneering this model and serves as a valuable example for operators to consider.
- Leverage Vertical Integration to Strengthen Value Chains
As SpaceX has shown with Starlink, vertical integration can provide competitive advantages by controlling the entire value chain, from launch to end-user services. Satellite operators can explore vertical integration in areas like manufacturing, network operations, and customer-facing applications. This approach reduces dependencies on third-party providers and allows operators to optimize service quality, cost, and innovation timelines.
- Target Underserved and Remote Markets
Satellite operators can capture significant market share by addressing underserved regions, such as rural and remote areas. With the proliferation of LEO satellites, operators can now deliver reliable, high-speed connectivity in areas with limited terrestrial infrastructure. Serving these markets not only expands reach but also aligns with government and international initiatives to close the digital divide.
- Focus on Flexible and Scalable Digital Infrastructure
As Amazon Kuiper’s model demonstrates, operators can benefit from digitizing their infrastructure to enhance scalability and flexibility. Operators can focus on virtualized ground systems and software-defined networking to manage network traffic dynamically and serve multiple use cases. Digital infrastructure also facilitates future updates and customization, allowing operators to stay adaptable as market demands evolve.
- Develop Industry-Specific Solutions
Operators can tailor solutions for specific industries, such as maritime, aviation, energy, and agriculture, where satellite connectivity offers unique advantages. By creating packages that address the needs of each vertical, such as high-bandwidth, low-latency communication for offshore drilling or reliable IoT connectivity for remote asset tracking, operators can differentiate their offerings and build strong customer loyalty.
- Monitor Competitive and Regulatory Landscape
The increased involvement of large tech companies and new entrants heightens competition and regulatory scrutiny in the satellite industry. Operators need to stay agile, track regulatory developments in regions where they operate, and participate in policymaking discussions. This helps avoid potential restrictions, ensures compliance, and provides a voice in shaping future regulatory frameworks that support sustainable growth.
Analysys Mason said in its report that satellite operators can follow strategies in order to adapt to the abundance of capacity, explore new markets, and remain competitive in an industry that is rapidly transforming. Emulating parts of SpaceX’s and Amazon’s strategies — like vertical integration and cloud partnerships — can provide operators with a roadmap for sustained growth in this new era.
