Market Trends of Satellite Ground Equipment Industry
Defense and Government is Expected to Hold Significant Share of the Market
- The defense segment's market share is expected to expand significantly. The growing investment in satellite technology for weapons, regional security, surveillance, and espionage intelligence is anticipated to benefit the market.Several applications of satellite-based imaging include navigation, mapping and GIS, emergency and safety, geo marketing and advertising, enterprise applications, sports, augmented reality/games, mHealth, personal tracking, and social networking. All these applications are being tailormade to satisfy different needs and usage conditions. The rise of context-aware applications and augmented reality apps, coupled with the increasing shipments of devices with location-based services, is expected to further augment the market during the forecast period.
- In September 2023, United Arab Emirates (UAE) company Yahsat has been awarded a significant AED18.7 billion (USD5.1 billion) deal to provide satellite services to the UAE government. Under the 17-year Authorisation to Proceed (ATP) agreement, Yahsat will supply the government with secure and reliable satellite capacity afforded by the Al Yah 1 and Al Yah 2 satellites from 2026 onwards. The announcement said this will be supplemented by two new planned satellites – Al Yah 4 and Al Yah 5 – expected to launch in 2027 and 2028, respectively. In 2024, Yahsat will receive an advance payment of USD1 billion from the UAE government under the mandate agreement. The ATP mandate will replace existing agreements, the Capacity Services Agreement and the Managed Services Mandate (MSM), expected to conclude in November and December 2026.
- In November 2023, Aerospace and defense solutions provider Tata Advanced Systems Ltd announced it has partnered with Satellogic Inc. to establish and develop local space technology capabilities in India. The partnership with Satellogic, a player in sub-metre resolution Earth Observation (EO) data collection, is a first step in the company's satellite strategy.
- GOVSATCOM is part of the EU Space Programme (2021-2027), which uses space’s capabilities in the field of satellite communications to enable and facilitate the implementation of Member States’ or EU policies connected to citizen security. In regions with no ground infrastructure (e.g., sea, air, rural areas, the Arctic region), or if the current ground infrastructure is unstable, damaged, or destroyed, access to GOVSATCOM is essential (e.g., due to natural disasters, crises, conflicts). Further, According to the Broadband India Forum, the new standard for Interface Requirements for Communication & Broadcast Networks for fixed-satellite service-FSS/broadcasting-satellite service-BSS (mandatory technical requirements) will allow the ground segment very-small-aperture terminal (VSAT) players to take advantage of the latest SATCOM technologies (BIF).
- The market studied is expected to grow in the future due to an increase in demand for the Internet of Things (IoT) and autonomous systems and a rise in demand for military and defense satellite communication solutions. During the period, however, cybersecurity risks to satellite communication and interference in satellite data transmission are expected to stifle the market growth. Furthermore, future technological advances in satellite missions and the deployment of a 5G network via satellites will likely provide profitable prospects for the industry. Accorindg to Nato, In 2023, Poland's defense spending as a share of gross domestic product was 3.9 percent, the highest of all NATO member states, followed by the United States at 3.49 percent.
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North America to Hold Major Share During the Forecast Period
- Government agencies in North America have been among the leaders in adopting advanced communication technologies. Owing to the combined efforts of public and private entities, the North American region, especially the United States, has been among the leaders in introducing new satellite and navigation systems that boosted the growth of the satellite ground equipment industry in North America.
- North America has a large coastal area that requires continuous monitoring. The increasing commercial activities and trade in the region are also propelling the need for maritime safety and surveillance. Furthermore, the underlying threat poses unique and critical challenges in enforcing maritime safety, as illegal activities can happen from all directions across the country's maritime borders if there is no proper system for detection and identification. Hence, the factors mentioned above are anticipated to influence the market studied in the region during the forecast period.
- Furthermore, the United States is the world's largest military spender. For instance, in FY 2022, the Senate Armed Services Committee approved a defense budget of about USD 25 billion higher than the President's proposal. According to SIPRI, in 2022, the total defense expenditure of the United States reached USD 876.94 billion, compared to USD 682.49 billion in 2018. Such trends favor the studied market's growth in the United States.
- Several government-led initiatives focused on leveraging the benefits of communication satellites also creates a favorable outlook for the growth of the studied market in North America. For Instance, in January 2022, the Minister of Innovation, Science and Technology of Canada announced a USD 8 million commitment in 21 organizations across Canada to explore new solutions that address Earth observation concerns and sustainable development priorities. The money will come from the Canadian Space Agency's (CSA) smartEarth program, which aims to push Canadian businesses to solve difficulties utilizing satellite data and help solve real-world concerns.
- Furthermore, the growing demand is encouraging the vendors to expand their offerings in the North American region which is also contributing to the growth of the studied market. For instance, in April 2023, Rogers Communications partnered with Lynk Global to test and deliver satellite-to-phone connectivity solutions across Canada.
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