Global tech market advisory firm ABI Research forecasts that the satellite broadband market will reach 3.5 million subscribers in 2021. Growing at a compound annual growth rate (CAGR) of 8%, it is anticipated to reach 5.2 million users in 2026. In addition, the market will generate $4.1 billion in service revenue.
Over both fixed and mobile broadband networks, the demand for broadband connectivity is increasing dramatically. Alongside this, the rollout of Low Earth Orbit (LEO) constellations improves broadband penetration significantly.
Khin Sandi Lynn, Industry Analyst at ABI Research, explained: "LEO satellites will play an important role in satellite broadband services in the years to come. High Throughput Satellite (HTS) LEO systems can support multi-Gbps speed per satellite. Orbiting around 800-1600 km from the Earth's surface, LEO systems offer a major advantage of low latency between 30-50 milliseconds, enabling LEO broadband services to support low latency services such as online gaming and live video streaming.”
As broadband connectivity becomes an essential service in today's era, satellite broadband services will remain a significant part of the broadband market. Yet, there is inevitable competition from terrestrial broadband networks due to the expansion of fixed broadband networks and mobile networks.
"Satellite systems will continue to provide broadband services to underserved and unserved areas," Lynn says. The expansion of LTE and 5G networks will challenge the satellite broadband industry by supplying fixed wireless access (FWA) services to residential users. However, the cost and time associated with terrestrial network deployments can limit distribution in remote areas.
"The challenge of LEO-based broadband service currently is the cost of terminals, which are relatively high compared to existing satellite or terrestrial platforms. LEO satellite operators need to find ways to lower the terminal cost. Flexible packages and pricing could make the services affordable for users in both developed and emerging markets. Even though heavy subsidizing of hardware costs may be required initially, the ability to boost adoption rates will help ecosystem development and eventually lower the hardware cost," Lynn concludes.
Citing an example, LEO satellite operator SpaceX first launched its Starlink broadband services to residential users in 2020. These support 100 Mbps broadband speed with unlimited data caps per month. Now, SpaceX has launched over 1000 LEO satellites, serving more than 600,000 homes and businesses in the United States. Other companies such as OneWeb and Telesat have also launched LEO satellites providing connectivity to the business segment. Amazon, which plans to launch LEO constellations named project Kupier, does not have a confirmed satellite launch date yet.