TAMPA, Fla. – Non-geostationary orbit (NGSO) constellations are set to overtake geostationary satellites in revenue by 2028, according to Novaspace research published on September 15th.
The geostationary Earth orbit market accounted for about 85% of total satellite capacity revenue of $12 billion in 2023, despite a recent slowdown in GEO orders from operators waiting to shake out the rise of Starlink and other NGSO constellations.
However, Novaspace expects revenues from NGSO capabilities to grow at a compound annual growth rate (CAGR) of 27% to about $18 billion by 2033, representing more than two-thirds of the market, as Amazon’s Project Kuiper and other large constellations join the fray.
Total satellite capacity revenue from all orbits is estimated to more than double over the decade to about $25 billion, said Novaspace manager Dimitri Buchs, driven mainly by the aerospace, business, land mobility and government connectivity markets.
A flood of offers
In the past three years alone, global satellite capacity supply has increased eightfold to around 27 terabits per second (Tbps) in 2023, largely thanks to SpaceX’s Starlink, which accounts for more than 80% of this.
Novaspace estimates that Starlink — currently the largest constellation in the world with more than 6,000 satellites in orbit — accounted for 70% of high-power satellite traffic last year.
SpaceX CEO Elon Musk recently said that Starlink “will likely deliver more than 90% of all space-based Internet traffic next year.”
Starlink is the only broadband Internet system that covers the entire Earth.
Next year, it will likely handle more than 90% of all space-based Internet traffic. https://t.co/jOXlZfd2w9 — Elon Musk (@elonmusk) 1 September 2024
NGSO satellites can provide high-speed broadband with lower latency than spacecraft operating further out in GEO, which is important for video calling, playing games, and using the latest cloud-hosted virtual tools and applications.
Satellites in lower Earth orbits can also cover the poles to keep airlines connected during international flights, unlike their geostationary counterparts located above the equator.
Still, GEO spacecraft are better at delivering more capacity to high-traffic areas.
Novaspace said high-performance GEO satellites continue to gain significant traction in aerospace, military, enterprise and other premium market segments where strict service level agreements (SLAs) are popular.
Falling prices, growing demand
According to Novaspace, global satellite capacity is expected to reach 240 Tbps by 2028.
In particular, the flood of NGSO satellites entering the market is also set to continue to drive down the average revenue per user (ARPU) for capacity.
ARPU for satellite capacity fell 40% year over year to about $150 per month per megabit per second of data in 2023, Buchs said SpaceNewsand by 2033 it is expected to fall below $100 in most segments.
Falling prices are expected to help unlock new markets for satellite connectivity in areas that are difficult to connect by terrestrial means, including near urban centers and over oceans.
The changing competitive landscape has also led to a surge in multi-orbit services, partnerships and acquisitions as legacy GEO operators adapt to the rapidly evolving market.
Still, Novaspace projects multi-orbit service revenue to reach $5 billion by 2033, compared to $117 billion in total service revenue.
Buchs, who is also the editor of Novaspace’s latest annual satellite connectivity and video market report, expects demand for capacity from all orbits to grow from 6.5 Tbps in 2023 to 73 Tbps in 2033.
But several uncertainties cloud those projections, including how much Amazon could use its significant financial firepower to break into the market with significantly lower prices.
Production, go-to-market, regulatory and other factors that are often responsible for delaying constellation deployments could also dramatically affect the outlook.
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