HTS satellites set to take up slack as capacity price pressure bites

High-throughput satellite (HTS) services will enable growth in the overall satellite communications market despite a rapid decline in traditional fixed satellite capacity sales over the next 10 years, according to Euroconsult.

According to the satellite research group, annual regular capacity revenues will decline by US$2 billion (€1.67 billion) over the forecast period, thanks to intense downward pressure on prices. However, the overall satellite communications market is expected to grow to US$15.3 billion by 2026, driven by uptake of HTS services.

With traditional wholesale capacity set to become a commodity, satellite operators are expected to focus on becoming maagned service providers to get closer to their end customers. Growth in satellite TV distribution will continue to emerging markets, alongside government programs for rural connectivity, enterprise networks and cellular backhaul.

In more mature markets, some historical businesses will erode, potentially including TV distribution, according to Euroconsult. In the meantime, new growth opportunities for mobility, broadband access and wireless network extension should be enabled by new satellite solutions.

“The last two years have confirmed the appeal of HTS for several user segments through the signing of capacity contracts and the endorsement of broadband LEO constellation projects by companies such as SoftBank,” said Pacome Revillon, CEO of Euroconsult and editor of the report.

“The leasing of larger capacity volumes will however be at the expense of lower pricing, also in a context of heightening competition. HTS market revenues should increase significantly over the coming decade to more than 50% of FSS market revenues by 2026. Moving forward, HTS systems will represent a driving force for data segments, with regular wide-beam capacity continuing to occupy a complementary role. This regular capacity will remain key to the TV broadcasting business.”