Market Trends of Military Communications Industry
Ground-based systems Segment is Projected to Showcase the Fastest Growth During the Forecast Period
In recent years, the world has witnessed political disputes, cross-border issues among neighboring countries, and growing warfare situations that have led to an increased focus on enhancing defense capabilities. The demand for this segment is driven by rising defense expenditures by various global powers annually, as governments worldwide are putting significant resources towards bolstering their defense capabilities. For instance, in 2022, the global military expenditure reached USD 2,240 billion; this was a growth of 6% from the year 2021.
Military forces are using advanced communication systems for ground-based, air-ground, and shipboard applications. The use of advanced data links, high-frequency communication systems, and VHF/UHF/L-band systems for ground-based military platforms is increasing. As a result, ground-based systems are expected to see significant growth during the forecast period.
In addition, various countries globally have been involved in the development of indigenously development of military communications equipment to provide secure communications networks to their armed forces. For instance, in June 2023, India awarded a contract to ICOMM Tele Limited to deliver 1,035 5/7.5 Ton radio relay communication equipment containers for USD 60.29 million. ICOMM Tele Limited mentioned that it would produce the containers with all equipment and sub-systems sourced from indigenous manufacturers in India to address the long overdue requirement of mobile communication detachments of the Indian Army.
Furthermore, in October 2023, THALES was awarded a contract by the US Army for the procurement of 7,000 RT-2129 combat net radios (CNRs) for USD 6 billion. The radios are intended to provide secure and reliable communication on the battlefield. Thus, growing procurement of advanced ground-based military communications systems and rising adoption of next-generation communication devices boost the market growth during the forecast period.
North America to Exhibit the Largest Market Share During the Forecast Period
North America held the highest market share in military communication systems and is expected to continue its domination during the forecast period. The growth is attributed to the highest defense expenditures, growing focus on improving military communication capabilities, and procurement of next-generation communication devices. For instance, the US is the world's largest spender on defense, with a budget of USD 877 billion for the fiscal year 2022.
The US military is constantly upgrading its equipment and capabilities to maintain its global dominance and readiness for any potential threats. With this vast defense spending, the country is investing in the development of various military communications technologies for air, land, sea, and space. For instance, in January 2024, the US Space Force awarded two contracts worth USD 66 million to Lockheed Martin Corporation and The Boeing Company to design a new narrowband communications satellite.
The US military is also planning to expand its Mobile User Objective System (MUOS) by building two new satellites through a competitive contract process. These satellites will transmit voice and data communications and enhance the existing network of MUOS satellites. In addition, the US announced that its 2023-2027 expenditure plan includes funding for the low Earth orbit broadband constellation and small numbers of communications satellites to augment or replace existing systems.
Furthermore, increasing expenditure on the procurement of advanced communication systems and rising spending on the defense sector from the Canadian defense forces also propels the market growth. For instance, in December 2023, General Dynamics was awarded a contract to support the Canadian Army by delivering various Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) systems for USD 1.68 billion. Thus, rising technological advancement and an increase in research and development in satellite connectivity will boost the military communication market across North America during the forecast period.
