Very low-earth orbit satellite market set to reach new heights

  • The satellite comms market is getting hotter
  • The very low-earth orbit (VLEO) satellite market is poised for significant expansion
  • According to Juniper Research, this segment will grow significantly, with investments surpassing $200bn in the next three years
  • The telco sector is highlighted as key for monetisation opportunities in the VLEO area

While much of the telecom sector’s focus on satellite developments in recent years has been on the potential of low-earth orbit (LEO) satellite constellations, such as Starlink and OneWeb, analyst firm Juniper Research believes the next big wave of investment will be in the very low-earth orbit (VLEO) satellite sector.

The research house predicts the value of investments in VLEO technology developers globally will grow by almost 1,200% in the next three years, from about $17bn this year to $220bn in 2027.

As the name implies, VLEO differs from LEO in terms of the altitude that is used for operation: VLEO satellites operate at an altitude of around 300km (with the European Defence Agency stating that the most common range of VLEOs is between 250 and 350 km), while LEO satellites generally operate at altitudes from about 450 km to 2,000 km above Earth.

According to Juniper Research, the lower altitude paves the way for reduced communication latency and higher-resolution imaging. In its report, it identified Thales Alenia Space, LeoLabs, Redwire, Blue Canyon Technologies and Albedo as the top-five technology developers and suppliers that are “primed for future VLEO success”, based on funding, market coverage and innovation levels in the solutions they provide, for example.

To benefit from the expected opportunity in the sector, these specialist technology vendors are advised to leverage their funding, which is expected to be significant, and to develop software-based VLEO solutions. The analyst firm also recommended that satellite management software remain adaptable to evolving use cases to capitalise on a market that has an anticipated cumulative investment of some $1tn by 2029.

“Future leaders must focus on industries including telecommunications, navigation and environment monitoring, as these are the best long-term monetisation opportunities, owing to the requirement for global connectivity that terrestrial technologies will be unable to provide,” noted report author Ben Clark.

Recently, the telecom industry has witnessed a wide array of developments in the satellite communications space (though not only in the LEO domain), including new investments and partnerships being made to foster the market’s progress going forward.

The latest move came from French satellite provider Eutelsat, which just announced a partnership with Seraphim Space, a company that describes itself as a “global leader in SpaceTech investment”. The partnership involves Eutelsat’s participation in the latest round of fundraising by Seraphim Space, although the amount of investment that is being set aside for the financing round has not been disclosed.

In another notable development, Japanese giant NTT took a bet on its space business strategy by establishing a new space unit dubbed C89. The company plans to manage its own geostationary orbit (GEO) satellites, LEO satellites for observation services and data collection, and high-altitude platform station (HAPS) systems. As for LEO satellite-enabled communications services, NTT will look to make use of partnerships in the area (including one that its mobile operator NTT Docomo agreed with Amazon’s Project Kuiper).

The satellite communications industry has been undergoing significant shifts – most prominently M&A deals between players such as the merger between UK satellite operator OneWeb by Eutelsat and the agreed acquisition of satellite operator Intelsat by fellow company SES.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV

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