10 Things NSR Learned at SATELLITE 2023

Discussions at SATELLITE 2023 last month ranged from the elephant(s) in the room – Starlink, Kuiper, orbital debris, and new funding challenges – to opportunities like direct-to-device and new technologies on the horizon that are making satellite and space an exciting and engaging topic. In this article, we'll take a closer look at NSR's takeaways from SATELLITE 2023 and what they mean for the future of the satellite industry.

Space is Complex, Using Space Should be Simple

As the space industry looks to move from niche to mainstream, successful companies are reducing the complexity around using space. This includes all aspects – from ‘simple’ terminals such as Starlink’s “Dishy” to the large hyperscalers such as Microsoft and Amazon pushing their cloud services as close to the edge as possible. The winners over the next era of space sector growth will be the ones who remove the complexity burden from the end-user.

Flat Panel Antennas Were Everywhere

Walking around the show floor this year, flat panel antennas (FPAs) ‘smelled real’ – literally. As more and more arrived fresh off a limited production run into tradeshow booths, they moved beyond engineering mockups and into another stage of refinement. However, production costs and product-market fit remain elusive today. With a limited number of planes/trains/governments in the world, is the market big enough to support a large and diverse vendor base? If consumer markets can only be captured through an integrated (and closed ecosystem) solution, what does that mean for the growing base of third-party terminal manufacturers? The next 12 to 24 months will be key to see how this market moves from limited production runs to mainstream.

National Security is a (the?) Critical Market Opportunity

Perhaps a sign of macro-economic headwinds in the commercial markets, everyone had a gov/mil product. Even after SATELLITE 2023, companies continue to announce more services geared toward tapping into the growing militarization of space. As large Low-Earth Orbit (LEO) programs are announced in Europe and China – meeting the requirements of national security customers will be critical to success. They too will value simple approaches as they look to onboard more commercial services into their own infrastructure – the winners here will not only address the national security concerns of the country they operate in, but will meet the increasing emphasis on software automation, universal access, and cyber security.

Starlink and Kuiper are the Biggest Threats to Incumbents

Deep pockets, the ability to scale rapidly, verticalized strategies, branding, and change in business dynamics can lead to market dominance by these two key players in a relatively short period of time. Satellite operators, equipment manufacturers, and launch providers can quickly see diminished returns and market shares, threatening the very viability of individual players.

Telco Strategy is Needed to Respond to Starlink and Kuiper

How do you fight a giant? Become a giant yourself. Telco integration enables scale, reach, and synergies that can prove to be advantageous when facing hyperscalers in the marketplace. Branding can likewise be addressed as telcos that have been dominant and wield a recognizable brand can go toe-to-toe with SpaceX/Starlink and Amazon/AWS/Kuiper in local markets.

No Clear Business Model for Direct-to-Device — Yet

Although touted as the biggest opportunity in the satellite industry’s history, a winning business model remains elusive for many players. Key questions remain unanswered, including — How do satellite players monetize the service? Whose spectrum do we use? How compelling is a service that will be only narrowband and IoT in the short-medium term? Who pays for the service? What's the revenue split between telcos/mobile network operators, smartphone manufacturers, satellite operators, and other players in the value chain?

How Low Should Operators Go … Into the Value Chain?

In recent years, we have seen a trend toward vertical integration, as satellite operators seek to control more elements of the value chain, from manufacturing and launch to ground infrastructure and service provision. This has led to a wave of mergers and acquisitions, as companies look to build out their capabilities and expand their market share.

At the same time, new players are entering the market, including companies like SpaceX with its Starlink constellation and Amazon's Kuiper Project. These new entrants are disrupting the industry and challenging incumbents, which may lead to further consolidation as companies seek to maintain their competitive edge.

Launch is Still a Bottleneck

Cost is not going down as much as the industry thinks and there are delays and failures that put a lot of pressure on this segment that important for the growth expected.

Orbital Debris – Space’s Environmental Concern

The accumulation of orbital debris has become a growing concern for our industry. The industry at large is embracing the significant risks to operational satellites, manned spacecraft, the International Space Station (ISS) and even future space stations, along with future space activities. While progress has been made, addressing this issue to preserve future space opportunities and development will require ongoing collaboration and innovation across the industry.

Everybody Showed Up — and Then Some

There was a new vibe in the air at SATELLITE with a wider than usual variety of missions discussed and many non-space actors trying to find and hone their space strategies. VS