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  • Satellite Evolution

NSR report: Government and military SATCOM demand persists despite changing operational paradigm

NSR’s newly released Government and Military Satellite Communications, 18th Edition report finds that despite COVID-19, troop drawdowns in the Middle East and ongoing pricing compression, demand for connectivity will continue to grow in the long term. At over US$6.6 billion in revenue in 2020 – the market was at the tail end of its growth phase and is now entering a short-medium term shaped by many factors.

“2021 into 2024 will be a transitional period for Government and Military SATCOM,” states Brad Grady, Consultant at NSR and lead report author. “On the footsteps of ongoing supply-chain challenges, changing security objectives by major countries, and a slow re-architecture of space-based connectivity layers, the market is experiencing a dynamic set of drivers and restraints, all pushing towards a flatter revenue growth curve.

The need for connectivity is clear – however, macro-level factors like fewer boots on the ground vs. eyes in the sky vs. surging satellite capacity supply continue to alter the competitive landscape.” Emerging paradigms such as 'Joint', 'Enterprise' and 'Unified' are the new catchphrases for commercial industry to get their heads around. Meanwhile, budgets continue to be squeezed, and existing contracts are no longer an automatic renewal. Rounding it out, MILSATCOM vs. COMSATCOM and Bulk Leased vs. Managed Services are still very much factors ‘in-play.’

The next 3-4 years will be challenging for gov & mil spending – budgets are already stretched, but requirements for security and resiliency are increasing. This push and pull effect will only exacerbate the challenges facing mil/gov users as more satellite capacity is on the way but spending remains in a state of turbulence. From 2024 onwards, NSR does expect revenue curves to return to growth as the cyclical nature of geopolitics comes back into focus and the market attempts to move more towards a tenuous supply-demand equilibrium.

All told, Gov & Mil end-users will demand over 1Tbps of throughput by 2030, up from 52Gbps in 2020. Non-GEO HTS in MEO and LEO will drive the next-phase of satellite connectivity growth for Gov & Mil customers, combined with improved use-cases for narrowband IoT, and emerging requirements for GEO-based services. Combined, changing security and connectivity drivers will propel the market to over US$86 billion in cumulative Retail Revenues from 2020 to 2030.

Companies and Organizations Mentioned in NSR’s GMSC18:

Astra, Blue Origin, Eutelsat, Gilat, Hughes, Inmarsat, Intelsat, Iridium, Isotropic Systems, Kepler, L3 Harris, Lockheed Martin, Lynk, Myriota, NATO, Omnispace, OneWeb, Ovzon, Peraton, Rocket Lab, SES, ST Engineering iDirect, SatADSL, SpaceX, Spacecom, Speedcast, Telesat, Thinkom, Turksat, UK MoD, US Space Development Agency, US Space Force, Verizon Comtech Telecommunications Corp, and ViaSat.

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