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Satellite communication: $165B Investment by 2033

Growth in demand for broadband and direct-to-device services from network operators and technology companies is driving investment in satellite communications, which Analysys Mason estimates is expected to exceed $20 billion by 2025. This increase is fueled by satellite launches by companies such as Starlink and AST SpaceMobile, as well as major investments by industry giants such as Apple and Google. Analysys Mason analyst Christopher Baugh expects the global market for satellite telecommunications services to reach $165 billion annually by 2033. There are several reasons for this surge in investment in satellite communications services. Certainly, satellite communications play a growing role in the strategies of telecommunications companies and enterprises.

Services offered -satellite communication

The rise of the low earth orbit (LEO) industry is gaining momentum, and companies such as Elon Musk’s Starlink are providing broadband and satellite-to-smartphone services. Recently, AST SpaceMobile also announced a 10-year agreement to provide Vodafone with direct-to-device services. Starlink’s satellite broadband service is growing in popularity worldwide, with the volume of data traffic from the Starlink constellation increasing by more than three times this year. Space investmentsAST SpaceMobile has secured additional funding from AT&T, Verizon and Google, as well as a contract with the U.S. government. Apple invested $1.1 billion in Globalstar’s infrastructure in October. Then, there is funding and investment from consortia and other organisations. The European Commission’s Iris 2 project will 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 investments in a shared constellation with support from Ericsson and other operators such as Dish/Echostar and Iridium. In addition, companies such as Amazon’s Project Kuiper and Telesat Lightspeed are ready to launch their own LEO satellites and enter the satellite broadband service sector.

The Iris role in the EU space

The Iris 2 (Infrastructure for Resilience, Interconnectivity and Security by Satellite) satellite system will be implemented by the SpaceRISE consortium. This was established by the European Commission by awarding the concession contract for the development, implementation, and management of the European Union’s next satellite connectivity system. A key tool to ensure greater independence and autonomy for the European Union in satellite internet connections, especially from the increasing encroachment of SpaceX’s Starlink and soon Amazon’s Kuiper satellite constellations.

The approximately one-year contract consists of a public-private partnership to acquire a system consisting of more than 290 satellites on different orbits and the associated ground segment to provide government services by 2030 while enabling commercial services. The constellation satellites will be placed in two different orbits: low (up to 2,000 kilometres) and medium (between 2,000 and 35,786 kilometres).

The European Union funded the Iris 2 program with 2.4 billion euros under the 2021-2027 Multiannual Financial Framework (MFF) and is considering additional funding under the 2028-2035 MFF. The funding is complemented by the European Space Agency (ESA) with 600 million euros (signed at the ESA ministerial conference in November 2022) and private commercial actors under a concession contract. The SpaceRISE consortium consists of three European satellite network operators (SES SA, Eutelsat SA and Hispasat SA) and relies on a core team of subcontractors from all segments of the satellite communications ecosystem: Thales Alenia Space, OHB, Airbus Defence and Space, Telespazio, Deutsche Telekom, Orange, Hisdesat and Thales SIX.

Satellite communications, $165 billion will be invested worldwide by 2033
Satellite communications, $165 billion will be invested worldwide by 2033

Open challenge between U.S. and EU satellite constellations

With several public constellation initiatives from the U.S. to China, as well as private ones such as Eutelsat’s OneWeb, SpaceX’s Starlink and Amazon’s Kuiper, the telecommunications sector is more strategic than ever for Europe, and the Iris 2 program is designed precisely to meet this challenge. The Kuiper project of Amazon, a global group owned by Jeff Bezos, according to the application submitted to the FCC, was created to bring broadband connectivity to those who do not have it: 3.8 billion people worldwide. The more than 3,000 satellites needed to do this would have to “float” in space on 98 different orbital planes, between 590 and 630 kilometres from the Earth’s surface. Project Kuiper has secured 80 launches from Arianespace, Blue Origin, SpaceX and United Launch Alliance, with options for additional launches with Blue Origin (also owned by Bezos).

Satellite communication

SpaceX’s Starlink constellation of satellites for Internet connections, owned by Elon Musk, reaches 6,000 with its latest launch from Cape Canaveral Space Base in Florida, a record number set to grow further, even double. The Iris 2 program will provide a wide range of services to European governments and citizens. It enables surveillance of borders and remote areas, but it is also useful in terms of civil protection, particularly in the event of crises or natural disasters. It should also improve the distribution of humanitarian aid and the management of maritime emergencies, both for search and rescue. Numerous smart infrastructures (energy, finance, health care, data centres, etc.), which are considered strategic by Brussels today, will be monitored thanks to the connectivity provided by Iris 2.

Meanwhile, OneWeb is at present a constellation of some 650 satellites in low Earth orbit aiming to provide high-speed global Internet access. It was born in 2012 in Florida, close to the famous Kennedy Space Center, and since this year, belongs to Airbus U.S. Space & Defense, the American division of the European company Airbus. Constellations finally came up after a few attempts in the early 2000s, with concrete projects largely financed by public and private funds.

Antonino Caffo has been involved in journalism, particularly technology, for fifteen years. He is interested in topics related to the world of IT security but also consumer electronics. Antonino writes for the most important Italian generalist and trade publications. You can see him, sometimes, on television explaining how technology works, which is not as trivial for everyone as it seems.