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Light at the end of the tunnel

The international satcom industry has taken major leaps in 2020 with smallsats, game-changing 5G standardization on the rise, and satellite-to-cloud services as the biggest developments. That is why we in GateHouse SatCom are optimistic about the future and sense a glimpse of light at the end of the tunnel even though the coronavirus pandemic has taken its toll on the industry.

Many satcom companies have suffered severely from the Covid-19 crisis. Some have succumbed to the virus, especially those servicing the aero industry have been under stress, while others have been able to find new business opportunities in the corona darkness. Restricting the traditional conferences and seminars, the pandemic has also made it hard for players in the industry to meet and discuss the future of satcom.

However, despite the many hardships of 2020, this year has not been all bad for satcom. Heading into 2021, here are three reasons for optimism:

Smallsat Boom

The rise of smallsats has truly been a glimmer of hope for the industry. With nearly 1,100 spacecrafts delivered to orbit in 2020, the number of satellites launched has hit an all-time high, show figures from Euroconsult. This has made the market for Low Earth Orbit (LEO) satellites boom, and according to Euroconsult, the market is projected to reach $51 billion at the end of the 2020s – more than four times the market size of the previous decade.

The market growth is prompted by the development of new technologies allowing for an increasing number of smallsat use cases – from Earth and space observation and environmental protection to IoT networks and security purposes.

Needless to say, the potential of smallsats seems limitless – especially because of the 5G network which was introduced in 2020 and will gradually be rolled out in the years to come. In satcom, 3GPP is one of the driving forces behind the push for satellite-based 5G, developing new network standards. With 5G, we expect that the entire SatCom ecosystem will be transformed. With 3GPP standards for 5G for both terrestrial and satellite networks, connectivity will be accessible seamlessly, no matter where you are.

With the breakthrough of standardized 5G, satellite IoT and low data-rate devices will be able to directly implement 5G into given networks. This will open up a vast market of millions, maybe billions of satellite-enabled IoT devices. Within the next couple of years, 5G for non-terrestrial networks will be released, changing the way we will be able to track devices consistently. This will be a real game-changer for many aspects of the satcom industry and it will be driven by standardization.

Public sector kickstarts the satellite industry

Attracted by global coverage, governments and public institutions have started to take advantage of existing satellite services. The public sector is especially interested in data services for exchange of images and videos, but the use of leased satellite capacity is also increasing.

These developments have also been silver linings for parts of the satcom industry. According to a report by ResearchAndMarkets, the commercial satellite imaging market was valued at $3,09 billion last year and is expected to reach $5,75 billion by 2025 – prompted mainly by government support, e.g., the Australian government investing $260 million in the development of satellite technologies and creation of jobs in the Australian satellite industry.

Big Tech Battleground

Cloud service is widely used in terrestrial systems, and now cloud services are literally reaching into the skies, as satellite-to-cloud services are gaining a foothold.

Earlier this year, the US Federal Communications Commission (FCC) authorized Microsoft to perform tests connecting its cloud service, Azure, with ground stations. With its new satellite-to-cloud service, named Azure Orbital, Microsoft is looking to challenge Amazon’s Web Service (AWS) already offering cloud connection via satellite.

The overall purpose of satellite-to-cloud is to grant users direct control over satellite communications, downlink, and process satellite data. In this way, data from the satellite is made available through cloud services, and data centers can host websites, run applications, and easily scale their operations without owning or leasing ground station infrastructure.

Thus, the satellite-to-cloud market offers great potential which tech giants are looking to realize. Cloud computing via satellite is projected to drive 52 exabytes of traffic by 2029, generating a potential $16 billion in revenue from 2019 to 2029 – with most of the revenue flow going to service providers and satellite operators, a market report by Northern Sky Research shows.

This has turned satcom into a battleground for Big Tech. According to Gartner, Amazon is off to a head start, dominating the cloud-computing market with 45 percent in 2019 while Microsoft sits on 18 percent. 2021 will tell whether Amazon can maintain pole position or will gradually be overtaken by Microsoft, that, in recent years, has seen cloud infrastructure outgrow other business areas such as Windows and subscriptions to Office 365.

In short

Right now, a lot is going on in the satcom industry, and – knock on wood – the future of our industry looks promising. So, despite the fact that this year has been a roller coaster ride, we are positive that we see a glimpse of light at the end of the tunnel.