The ‘Big Four’ satellite operators — Intelsat, SES, Eutelsat, and Telesat — could consolidate into a ‘Big Three’ or even a ‘Big Two,’ in the next year, Jose Del Rosario, analyst for NSR, an Analysys Mason company, forecasted in a bold prediction in one of the opening panels at SATELLITE 2023 on Monday.
The direct-to-device market was one of the key topics of the panel, “Satellite Industry Financial Forecasts for 2023.” Rosario said that so far, there is no early leader in this market, although he hailed the deals between Iridium and Qualcomm and T-Mobile and SpaceX.
Speaking of bold predictions, Iridium COO Suzi McBride predicted that by the end of 2023, Iridium will be a household name. She believes with the launch of direct-to-device, Iridium will be in the mainstream like never before, something she barely thought was possible a few years ago.
McBride was bullish about Iridium’s growth prospects across different sectors. Iridium is seeing growth in both its government and commercial business. With mobility picking up, and IoT showing great potential, it promises to be an exciting time for Iridium. McBride said she was surprised that Iridium’s voice business had also picked up more than expected, but for Iridium, the deal with Qualcomm, and the direct-to-cell market could be the one that is a game-changer for the company.
“I would say I am most excited by the direct-to-cell market. Being embedded in phones is going to be a huge growth opportunity. I think this will open up a big new market,” she said.
It is a pivotal year for SES, as it launches more of its O3b mPOWER satellites, and targets a strong performance in government, mobility, and other key sectors. John-Paul Hemingway, chief strategy and product officer of SES said he was encouraged by the strong performance of its mobility business and how things have picked up here, particularly in areas like cruise and aviation. He sees cloud, edge computing, and connected industrial IoT, as exciting nascent markets for satellites.
While direct-to-device was a theme throughout the session, Hemingway says things are changing as regards how telcos view satellite. “All the telcos I speak to are saying we now need a space strategy. Satellite is now mainstream — part of telecoms and cloud companies. Satellite is not a last resort anymore,” Hemingway said.
However, Hemingway perhaps reserved his most interesting comments to talk about the government market. He believes a major growth area for satellite will be governments’ and their need to have a sovereign space strategy. Due to the changing geopolitical situation, there are significant areas in this direction, and he pointed to O3b mPOWER’s ability to give governments sovereign access to capacity, also citing SES’s recent deal with the government of Luxembourg.
“I think there is now this notion of governments wanting sovereign access to space. I think that will be the segment that really drives growth. Government and sovereign space capabilities is one where I see a huge growth. I think we will see every major government announce their sovereign space plans over the course of the year,” Hemingway said.
Hughes Network Systems growth forecast is very much interlinked to the launch of its Jupiter-3 satellite. Paul Gaske, COO of Hughes, an Echostar company, said the company is capacity constrained right now, and dealing with competitive pressure from Starlink. The launch of this satellite will enable it to be much more aggressive with its plan to target customers.
Hughes is seeing customers give up linear TV for streaming, and Hughes is working to cater to that demand, Gaske said. The company has high hopes for its HughesNet Fusion service which combines satellite and wireless technologies for a high-speed, low-latency internet experience. Gaske believes this service could start to show real progress by the end of the year. He added, “This transition where we see new blended GEO [Geostationary Orbit] satellite capacity with terrestrial capacity for a hybrid service, we think will be quite successful by the end of the year. We think this blended service will be quite popular.”
Ryan Reid, president of Boeing Satellite Systems International, was the only satellite manufacturer on the panel, and he said the key focus for the company in 2023 is making its deliveries. These include more mPOWER satellites for SES and the Viasat-3 satellite, which is one of the largest that Boeing has ever built.
Reid also said he is seeing a change in how the U.S. government views commercial satcom, with the recent National Defense Strategy showing that the U.S. government values commercial satellite much more than in the past.
The topic of consolidation was brought up, but people on stage were understandably non-committal about the potential for acquisitions. Gaske echoed previous comments from EchoStar’s new CEO Hamid Akvhavan that EchoStar is eyeing potential acquisitions that would make sense with its existing business.
McBride said while Iridium was in a great position with a strong cash flow, the company would only look for “opportunistic acquisitions.” Despite that, she does think there will be opportunities for Iridium in 2023, should they choose to pursue them. VS