The commercial and military satellite market is expected to grow at a Compounded Annual Growth Rate (CAGR) of 76.6% a cumulative US $195.11 billion over the period 2020-2028 according to Research and Markets.
Military satellites are a measure of the nation’s military strength, operability, and the ability to attack or defend itself. These satellites give the military real-time data of movement of troops and arsenal in the enemy borders. They also facilitate high-bandwidth communication over secure channels, track and target enemy encroachment or intruding vehicles, and other military functions.
Militaries, across the globe, are strengthening Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) systems that essentially need strong and secure communication channels accessible from anywhere by the defense forces. The C4ISR systems market is slated to grow in response to the increasing demand for better security, control, and co-ordination. This will increase the demand in favor of military communication and Intelligence, Surveillance, and Reconnaissance (ISR) satellites, during the forecast period, according to the report.
The micro, nano, and pico-sized satellites are mass produced satellite systems available in market, and are currently in service. Since the introduction of nano satellites in 2013, 94 nano satellites were launched into orbit within a year. Following this, the launch cost per nano satellites went up due to the demand. It is expected that, by the end of 2020, there will be over 1000 nano satellites orbiting earth according to Research and Markets.
Asia-Pacific to Drive Growth
The US is the largest market for military satellites followed by China, UK, India, Russia, Germany, and France. Countries like Pakistan, Egypt, Nigeria, Algeria, Ukraine, South Africa, Brazil, Japan, Canada, Indonesia, Singapore and Middle Eastern countries are driving demand for military satellite communications.
The Asia Pacific region is anticipated to have the highest growth during the forecast period, owing to growth in military satellite development in this region by countries like China, India, Japan, and South Korea among others. Japan has launched its first military satellite in Jan 2017 and by the end of the Jun 2018, the country has launched 8 intelligence-gathering satellites into the orbit. South Korea is also currently developing a constellation of five high-power military surveillance satellites under the project called “Project 425”. Republic of Korea’s (ROK’s) Defense
Acquisition Program Administration (DAPA) has invested about USD 900 million for this project and has selected Korean Aerospace Industries, Hanwha Systems and Thales Alenia Space for this project. Project 425 is expected to be deployed in 2023. Other than these countries, China and India are also investing in satellite technology improving their communication capacity.
In recent years usage of commercial capacity has been growing, and NSR is predicting a CAGR of almost 32% over a ten-year period to 2028, rising from consumption of 30 Gbps in 2018 to 480 Gbps in 2028. Bulk leasing will account for almost 40% of that capacity by 2028.
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| To read or download a pdf of a report on Military Satellite Market sponsored by ST Engineering iDirect click here. |
Military Satellite Terminals
The Strategy Analytics Advanced Defense Systems (ADS) report “Global Military Satellite Terminal Market and Technology Forecast: 2018 - 2028” forecasts that the need for terrestrial terminals to incorporate more reconfigurability, capacity, and capabilities will propel satellite terminal revenue past US$ 6 billion in 2028.
According to ADS, GaN device performance will enable improved RF capabilities in the terminals, pushing GaN revenue to a CAGR exceeding 20 percent over the forecast period from 2018 to 2028.
Among the key findings of the report include:
- VSAT systems are incorporating software-defined architectures to increase capabilities.
- Systems are also going higher in frequency and working with broader bandwidths to address the need for more data capacity and capabilities.
- VSAT radios and systems are also being called upon to provide more connectivity between platforms and domains.
- Land-based VSAT systems will represent a dominant opportunity in terms of both expenditures and shipments.
- North America will continue to provide the largest regional market opportunity for the VSAT and component suppliers.
COVID-19 Impact
The current global COVID--19 pandemic has dampened key vertical markets for satcoms such as the aeronautical and maritime markets. Companies who have heavily invested in these markets are scrambling for alternative markets to meet the shortfall in revenues as the aero and maritime markets will take some time to recover. The military and government markets, however, does not seem to have been affected by the pandemic. In fact, according to several satellite executives I interviewed, they expect revenues from military satellite market to grow and are bullish about new opportunities such as Unmanned Aerial Vehicles (UAVs) and Cybersecurity, among others.
Conclusion
The government and military segment will remain the dominant revenue generator for satellite services, as it shifts its focus to constellations and missions beyond Low Earth Orbits, with more than US$ 387 Billion in cumulative revenues according to an NSR report issued in June 2020.
From all indicators, the military satellite market will grow at a healthy pace in the next few years. It’s not the easiest market to get into, especially if you are a start-up, but it can pay dividends in the long-term if you build the right relationships and invest in the key technologies that is driving demand in this market.
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Virgil Labrador is the Editor-in-Chief of Los Angeles, California-based Satellite Markets and Research which publishes a web portal on the satellite industry www.satellitemarkets.com, the monthly Satellite Executive Briefing magazine and occasional industry reports called MarketBriefs. Virgil is one of the few trade journalists who has a proven track record working in the commercial satellite industry. He worked as a senior executive for a teleport in Singapore, the Asia Broadcast Center, then-owned by the US broadcasting company CBS. He has co-authored two books on the history of satellite communications and satellite technology. He holds a Master’s in Communications Management from the University of Southern California (USC). He can be reached at virgil@satellitemarkets.com
