• Satellite communications are playing an increasing role in telco and enterprise strategies
• Network operators and big tech firms have been pumping billions into the sector in recent years
• Analysys Mason analyst Christopher Baugh believes investments in the satellite communications sector could top $20bn next year

‘Follow the money’ is a phrase popularised by one of the greatest films of the 1970s, All the President’s Men, when the Hal Holbrook character (Deep Throat) meets Robert Redford’s Bob Woodward in a car park. In telecom, if you’re following the money, you might want to look up to the heavens next year, as Analysys Mason analyst Christopher Baugh believes investments in the satellite communications sector could top $20bn in 2025 as the low-earth orbit (LEO) sector, in particular, gains even greater momentum. 

Baugh has been rubbing his crystal ball and looking ahead to the coming 12 months, when he expects to see “a burst of activity that will affect the entire global telecoms sector”.

That activity isn’t coming out of nowhere: You would have needed to be under a large rock for an extended period of time not to have noticed the proliferation of satellite launches by the likes of Elon Musk’s Starlink, for the provision of broadband and satellite-to-smartphone services (aka direct-to-device or direct-to-cell), and AST SpaceMobile, which has just announced a 10-year deal to provide direct-to-device services for one of its investors, Vodafone. 

AST SpaceMobile also secured additional funding this year from AT&T, Verizon and Google, and won a contract with the US government. 

And Starlink’s satellite broadband service is growing in popularity around the world: According to content delivery network specialist Cloudflare, the volume of data traffic from the Starlink constellation grew more than three-fold this year. 

And there are plenty of other companies getting in on the act, including satellite sector stalwarts such as Globalstar, which attracted a $1.1bn infrastructure investment from Apple in October this year, while “a virtual circle of performance improvement, accelerating consumer take-up, increased demand and falling costs is feeding into an intensifying positive feedback loop,” noted Baugh in his blog. “Opportunities are proliferating across multiple applications, including direct-to-device (D2D) communication, rural broadband and connected cars.”      

As a result, “investments in the satellite communications industry in 2025 could well surpass $20bn,” noted the analyst. “In addition to the consortium funding for the EC’s [European Commission’s] IRIS2 project,” which is to be developed by a consortium called SpaceRISE that includes European satellite operators SES, Eutelsat and Hispasat, as well as Deutsche Telekom and Orange, “the Mobile Satellite Services Association is considering investment in a shared constellation with support from Ericsson, and other players, such as Dish/Echostar and Iridium,” noted the analyst. 

In addition, the likes of Amazon’s Project Kuiper and Telesat Lightspeed are set to start launching their LEO satellites and join the satellite broadband services sector.  

These investments will ultimately lead to the development of a global satellite telecoms services sector that is on course to be worth $165bn per year by 2033, reckons Baugh. 

- Ray Le Maistre, Editorial Director, TelecomTV