As we (thankfully) close the books on 2020 and look forward to a hopeful restart in 2021, NSR’s analyst team was asked to provide their top predictions for the space industry in 2021. The prognostications below cut across all segments of the industry, but all have one theme in common: post COVID-19, space is poised for major impact and uptake in 2021 and beyond.
Satellite Manufacturing and Launch — New Opportunities in 2021
New opportunities and continued constellations will be the main themes in 2021, with several significant launches planned across every vertical: Starlink, OneWeb, Astrocast, Helioswire, Spacebee, Planet, Pleiades NEO, WorldView Legion/Scout, Satellogic, PlanetIQ, Glonass, Beidou, Galileo, Astroscale, Momentus Space, etc. For launchers, Virgin Orbit’s LauncherOne, with its first flight in May, and many more planned in 2021, and many Rocket Lab Electron KS launches planned in 2021 are ones to watch.
Constellations remain the driving focus, with next-generation systems planned in High Throughput Satellites (HTS), Earth Observation (EO), Internet of Things (IoT), and even navigation. Each represent the ongoing shift toward greater coverage, continuous service, and improved onboard and networked capabilities.
In HTS and EO, next-generation systems from SpaceX, Planet, Airbus, Maxar, and possibly OneWeb, are pushing market capabilities forward. In IoT, constellations are aiming for low latency and global coverage and support. While the business and technological approaches for each sector are different, each is supported through CapEx-saving economies of scale, diversifying launch options (dedicated, rideshare), and flexibility in manufacturing, launch, and networking capabilities.
In-Orbit Satellite Servicing: MEV and the Rest of the Market
In the in-orbit servicing market, MEV-1 demonstrated a successful mission, which led to the launch of MEV-2 to dock with Intelsat and Telenor. Northrop Grumman is leading the charge currently with the only life extension satellite servicing in Geostationary Orbit (GEO). Other companies such as Astroscale have planned launches early in 2021 to demonstrate an end-of-life technology with a prepared asset.
Ground-based and space-based Space Situational Awareness (SSA) infrastructure is still in the infancy stage of showing any real returns as companies like LeoLabs and ExoAnalytics start to offer services. NorthStar announced launch for the first satellite constellation to Polar Orbit in 2022.The major market player for this service is believed to be military to utilize assets and services for the protection of government space assets.
Technologies in this market are generally not mature yet as more demonstrations are required, with some as low as Technology Readiness Level (TR) 4-5 and operators and insurers confidence level at a minimum. However, there are high hopes that it will add value in the market.
Space Tourism, Slowed by COVID-19, Not Dying in 2021
Despite COVID-19's impact, interest and development in space tourism has continued. New players such as EOS-X space, Space Perspective, and PD Aerospace enter the supply side. Blue Origin and Virgin Galactic are the prime drivers in the suborbital market; they have performed multiple successful tests as they near the launch of commercial operations in late 2021.
Given SpaceX’s successful astronaut flights in 2020, it is expected that government customers will drive the early years of commercial orbital launch and enable players such as Axiom Space to deploy commercial their space station looking to make commercial operations common in a couple of years.
Major Cloud Service Providers Further Raise Profile of Satellite Markets
2021 will see the continued expansion of major Cloud Service Providers (CSPs) into satellite markets for EO and communications. While EO and geospatial applications are a first adopter segment due to higher overlap of the big data technology stack with satellite applications, HTS satcom is catching up as Non-GEO (NGSO) constellations ramp up deployments.
Amazon and Microsoft, which recently entered the business with dedicated solutions for satellite, will continue investing in 2021. As more Software-Defined Network (SDN) and cloud-native solutions from ground system and space segment vendors are launched, the marketplace of “cloudified” satellite solutions will become more crowded.
Virtualized ground networks will grow, as New Space Ground-Station-as-a-Service (GSaaS) providers tackle plans for shared infrastructure and automated/dynamic ground station contact scheduling solutions. Direct peering networks through cloud service providers will enable greater usage of satcom from existing customers.
Big Data Customer Adoption Increases in Big Data in 2021
One outcome of the COVID-19 pandemic is the increased importance of remote sensing and geospatial applications. Big Data applications in commodities and infrastructure monitoring, alongside supply chain insights, are expected to grow as customer adoption increases, led by an acceleration in the financial services vertical.
IoT-based transportation, government and military, and energy remain leading segments through the coming year for satellite big data services. While the market ecosystem is relatively well established in North America, new business models and virtual constellations will drive growth in other regions.
NGSOs a Reality in 2021
2021 will see the start of commercial service of SpaceX’s Starlink constellation in the U.S., with the company already winning $885.5 million of the $9.2 billion share of the first round of the Federal Communication Commission’s Rural Digital Opportunity Fund (RDOF). Focus will initially be on consumers, connectivity to Internet Service Providers (ISPs) around the world, co-located with gateways in some cases, and a government/military specific strategy.
OneWeb will look to continue launching satellites, and source remaining funds required to complete the 648-satellite constellation. While start of service is expected to be late 2021 or (more likely) early 2022, OneWeb is expected to obtain landing rights in India and activate further partners around the world to sell its capacity.
Post its merger with SSL, Telesat will raise funds in 2021 required to build the 298-satellite constellation and select a manufacturer. Amazon is expected to continue with its plans on the back of a $10 billion internal budget, though with a service date of 2024-25, these are still early days.
Finally, Chinese constellations Hongyun and Hongyan are expected to push ahead with their plans, starting service in 2021-22, while Europe is expected to come up with its own plans for an European Union NGSO constellation.
Optical Satcom Focuses in on Constellations
The optical focus is primarily on Inter-Satellite Links (ISLs) for NGSO constellations, and will largely remain an equipment market, with vendors vying to close contracts and ramp up on production capacities. The optical market is still in its early stages, with interesting supply-side developments for small satellites that need secure communications capabilities without the hassle of Radio Frequency (RF) frequency licensing.
COVID-19 has delayed projects, but in 2021 we will see numerous in-orbit demonstrations and proof-of-concepts take place to further bring needed credibility to this market. We will also see major players ramp up their Laser Communication Terminal (LCT) production capabilities in order to address future demand.
EO Markets Set to Aggregate
The EO value chain that initially included data providers and a fragmented ecosystem of application providers has expanded to include data aggregators and marketplaces in the middle. Downstream consolidation is expected in 2021 as companies with a niche expertise are acquired or invested in by large conglomerates.
Ground Segment to Play a Pivotal Role in the Industry's Turnaround
COVID-19 had a big impact on the ground segment as many deployments were put on hold and CapEx delayed due to caution. 2021 will start to see a recovery. Consumer broadband and backhaul will continue to perform strongly with emerging markets and new capacity accelerating growth. In preparation for new constellations and Very High Throughput Satellites (VHTS), investment in gateways will ramp up. Progressive recovery will also be underway in the enterprise and mobility markets.
From a technology point of view, 2021 will mark an inflection point in many aspects of the satellite ground segment. 5G will make satcom integrable with the mainstream ecosystem. Cloud and vrtualization will make satellite ground segment more flexible and scalable while reducing operating costs. These elements will start to see relevance in the implementations in 2021 for constellations, flexible satellites and VHTS.
IoT Deployments Rise as Importance of Automation Grows
Consumer IoT will continue to see strong uptake in 2021, but not as strong as previous (Pre-COVID-19) growth in the latter half of 2020 where COVID-19 boosted sales as more ecotourism was recorded, especially in regional and rural areas within the United States. Iridium will be the largest winner here with a wide variety of devices which will see greater uptake.
Ku-band and Ka-band will see a sharper growth as new distribution channels and new products are released from companies such as HiSky and a greater numbers of service providers. This is especially as the agriculture market takes off, resulting in greater levels of IoT backhaul to be seen in 2021 than in previous years.
Smallsat IoT will see increasing numbers of commercial devices connecting to their constellations as more satellites continue to be launched in 2021 and operators reach a new phase in their operations. However, in 2021 we will also see a couple of constellations either falling over or migrating away from satellite IoT services as competition becomes too much and COVID-19 reduces investor optimism in an excessive number of IoT-focused constellations.
VSAT and Broadband Prepped for Growth Trajectory
The market will continue to show resilience, and 2021 will see a return to heightened growth trajectory. Key drivers in 2021:
• Increasing bandwidth requirements at existing sites
• Service penetration with the Wi-Fi hotspot business model in the consumer broadband markets
• Network upgrades generating demand at the backhaul sites
• Infusion of new technologies such as Software-Defined Wide Area Network (SD-WAN), private LTE, cloud, and edge computing
Aeronautical Satcom Market Enters Recovery Period in 2021
The aero satcom market was arguably hit the hardest by COVID-19, as global travel came to a halt. However, NSR believes the market enters the recovery path throughout most of 2021. Industry fundamentals remain strong with the steady increase in bandwidth usage per flight until the free service model is implemented. The industry is likely to prepare itself for the implementation of the free service model, both on the capacity supply-side and airline-directed business model side. More consolidation is expected in 2021, both vertical i.e., Intelsat/Gogo, and horizontal.
Crew Welfare Gains, Cruise Market Pains
As with aero IFC applications, passenger maritime markets faced significant challenges due to COVID-19. With most cruise restarts pushed back into mid-first quarter 2021, NSR expects that once the market recovers, regardless of social distancing and occupancy limits, bandwidth demand will be significant. Meanwhile, merchant maritime is seeing a significant jump in throughput requirements and Very Small Aperture (VSAT) adoption. Crew welfare — which previously had failed to produce material in the market — is the driving application. As goods and services continue to be shipped all over the world, and crew members frequently cannot disembark once they are in port, connectivity is more important than ever. Oil and gas remains challenged, and likely to continue to face obstacles over the next couple of years as vessel supply exceeds market requirements.
Build, Buy, or Lease Dilemma in Gov/Mil Markets … Still
Acquisition reform, proliferated Low-Earth Orbit (LEO), milsatcom ... Oh My! 2020 was another significant year for the government and military sectors. With more and more key government players recognizing that “buying” can sometimes (or most times) be better than their DIY-approach to capability acquisition for both communications and remote sensing requirements, the market is on the right path. While they have yet to fully embrace the "___ as-a-service" model that the commercial markets prefer, next-generation gov/mil capabilities being designed with commercial integration on "Day-0." What's left is greater adoption of commercial insights and capabilities, a one-size-fits most terminal, and enhanced infrastructure orchestration. 2021 is largely expected to continue in the same direction as 2020, but eventually gov/mil budgets will need to get realigned to account for COVID-19 relief spending... and defense-sector cuts are usually the first on the chopping block. VS