NSR’s newly released Government and Military Satellite Communications, 13th Edition report finds SATCOM growth opportunities from global government and military customers continue to grow, primarily from mobility and HTS.
With outstanding questions on the shape of future proprietary military capacity, pricing pressures on commercial satellite capacity spilling over into military end-user expectations and a re-balance of general military deployment strategies, there is an ever widening path for growth. At more than $9 billion in retail revenues by 2025, all signs point towards a slow, cautious recovery.
“We still continue to see some near-term challenges as the market shifts from FSS to HTS capacity, and commercial pricing pressures are factored into more and more government and military markets,” said report co-author and Senior Analyst Brad Grady. “However, the shift is to more reliance on quickly deployable force structures, and FSS to HTS capacity. With outstanding questions on future procurement programs on the minds of everyone in the industry, there is cautious optimism that commercial will play a larger role through both managed services and capacity leasing directly to government customers.”
Maritime, and Comms-on-the-Pause applications are the ‘growth stories’ as military activity shifts towards forward staging locations either on land or at sea to engage in military operations. Emerging HTS options in C-/Ku-/Ka-bands help develop the value-proposition to support modern bandwidth intensive combat and civil response applications—at price points acceptable to government and military customers. However, the revenue leaders will remain manned and unmanned airborne platforms—which together contribute over 40 percent of total retail revenues. Within that, operations in the Middle East & Africa, which have seen record levels of intensity, are the core target markets.
Even applications such as bulk leasing offer growth for capacity demand—yet, revenues there remain largely flat over the next ten years. As government customers struggle with the balance of government-owned vs. commercially provided connectivity, there remains a narrow path to sustain direct government procurement of satellite capacity within the United States. As emerging markets continue to adopt more sophisticated ISR and situational awareness capabilities, the needs for satellite connectivity are increasing.