According to research published by Novaspace, non-geostationary orbit (NGSO) constellations are on track to surpass geostationary satellites in revenue by 2028. In 2023, the geostationary Earth orbit market accounted for approximately 85% of the $12 billion in total satellite capacity revenue. However, this market has experienced a slowdown in GEO orders from operators who are observing the rise of Starlink and other NGSO constellations.
Novaspace anticipates that NGSO capacity revenues will grow at a compound annual growth rate (CAGR) of 27% to reach approximately $18 billion by 2033. This will represent more than two-thirds of the market as companies like Amazon's Project Kuiper and other large constellations enter the fray.
Dimitri Buchs, manager at Novaspace, stated that total satellite capacity revenue from all orbits is projected to more than double over the decade to approximately $25 billion. This growth is primarily attributed to the aviation, enterprise, land mobility, and government connectivity markets.
The supply of global satellite capacity has significantly increased in the past three years, rising eightfold to around 27 terabits per second (Tbps) in 2023. This surge can be attributed to SpaceX's Starlink, which accounts for over 80% of this growth. Novaspace estimates that Starlink, currently the world's largest constellation with more than 6,000 satellites in orbit, accounted for 70% of high-throughput satellite traffic last year. Elon Musk, CEO of SpaceX, recently stated that Starlink will "probably deliver over 90% of all space-based internet traffic next year."
NGSO satellites offer several advantages over GEO spacecraft, including high-speed broadband with lower latency, which is crucial for video calls, gaming, and using cloud-based virtual tools. NGSO satellites can also provide coverage to the poles, ensuring connectivity for airlines during international flights, unlike their geostationary counterparts fixed above the equator.
While NGSO satellites excel in these areas, GEO spacecraft are better suited for delivering larger amounts of capacity to high-traffic areas. Novaspace noted that high-throughput GEO satellites are gaining traction in aviation, military, enterprise, and other premium market segments where stringent Service Level Agreements (SLAs) are favored.
Novaspace forecasts global satellite capacity to reach 240 Tbps by 2028. The influx of NGSO satellites into the market is expected to continue driving down the average revenue per user (ARPU) for capacity. In 2023, satellite capacity ARPU decreased by 40% year-on-year to around $150 a month per megabit per second of data, and Buchs anticipates it to fall below $100 for most segments by 2033.
Despite the declining prices, the industry anticipates new markets for satellite connectivity in areas difficult to reach by terrestrial means, including near urban centers and over oceans. The shifting competitive landscape has also resulted in a surge in multi-orbit services, partnerships, and acquisitions as legacy GEO operators adapt to the rapidly evolving market.
Novaspace projects multi-orbit service revenues to reach $5 billion by 2033, compared to $117 billion in total service revenues. Buchs, also the editor of Novaspace's latest annual Satellite Connectivity and Video Market report, expects capacity demand from all orbits to grow from 6.5 Tbps in 2023 to 73 Tbps in 2033.
However, several uncertainties cloud these projections, including the extent to which Amazon can leverage its substantial financial resources to enter the market with significantly lower prices. Production, launch, regulatory, and other factors that often delay constellation deployments could also significantly affect the outlook.