Building the Future (LEO?) Space Economy

As the Space and Satellite Industry starts to meet again “in-person” at events like the 36^th Annual Space Symposium – just what does the future look like for the space economy? 2020 and 2021 have been transformative years characterized by a truly massive number of satellites launched by ‘new players’ such as SpaceX’s Starlink, a kick-off of a new ‘space race’ by private industry launching paying passengers outside earth’s atmosphere, and on-going consolidation across more and more segments of the space and satellite markets.

NSR’s Global Space Economy report tracks more than $1 Trillion in cumulative retail revenues between 2019 and 2029, driven in part by all these rapidly changing paradigms. Cheaper access to space is not only fueling an increased launch cadence but enabling downstream players to bring new and innovative space-based data offerings to earth-based users. Pricing compression in connectivity markets are unlocking additional addressable market opportunities, while COVID-19 has been a catalyst for a resurgence in connectivity demand requirements. Supply-chains have been disrupted, but new products and technologies continue to come to market at a pace unseen since some of the earliest days of space utilization. Overall, NSR continues to see signs of more revenue growth ahead, not less.



Already, NSR is tracking larger opportunities in markets such as Manufacturing and Launch than we saw last year. Using data aggregated into NSR’s Global Space Economy report, Satellite Communications infrastructure (i.e., Manufacturing and launch revenues) totaled $82B – look into our 2020 to 2030 dataset and that total increases to $126B. Other markets provide similarly more positive cumulative revenue opportunities. Underlying a significant part of this trend is the emerging LEO landscape -from smallsat IoT opportunities to sophisticated Earth Observation Systems or human spaceflight – LEO is ‘the next frontier.’

While our Global Space Economy report does not provide a top-level view of revenues by orbit, digging into each of NSR’s library of research reports shows a picture where LEO is either the ‘fastest growth’ or the “largest opportunity” or some combination of both. Connectivity revenues are where GEO remains a significant driver, but even there the tides continue to turn in specific sub-segments of specific vertical opportunities. For example, within Satellite Communications, and within Mobility inside Maritime, the Offshore segment is seeing significant uptake of Non-GEO HTS connectivity. Now, ‘running the numbers’, it amounts that Offshore is roughly 9% of the cumulative maritime revenue opportunity, and Maritime roughly 65% of the mobility opportunity – so, “Non-GEO HTS” here is not the “money maker”. However, it shows a clear trend when viewed by 2020 to 2030 as some segments of some markets are rapidly adopting these Non-GEO connectivity technologies.



Connectivity is one of the smallest markets to see the benefits of this emerging LEO economy. Pivoting back to Infrastructure and manufacturing, the impacts of LEO/Non-GEO are more rapid and significant. Unlike on the connectivity side of NSR’s Global Space Economy, Non-GEO is almost always significantly larger than GEO throughout the decade of analysis – such that over 2020 to 2030, 88% of a $567B opportunity is Non-GEO orbits. While again, this is comparing NSR’s “latest data” to our 2019 to 2029 dataset, they paint a clear picture of a shift in the industry.



What does all of this mean? Just as we’ve seen over the past few weeks with Inmarsat’s Orchestra announcement highlighting some form of a LEO strategy, IPOs and SPACs focused on Non-GEO networks or services – and elsewhere across the value-chain, it seems as though nearly everyone has to have a LEO answer – be it, “our markets are unlikely to see significant value from LEO” or “we are building a robust LEO solution”, investors and end-users are looking at these news, trends, and announcements and asking themselves where they stand.

Bottom Line

The industry is in a period of rapid change; not just becoming ‘more efficient’ in the way we employ capital, leverage radio frequency allocations, or build distribution chains – but migrating from a fairly static “launch it and run it” to the “build, test, deploy, repeat” development cycles prevalent within other technology sectors. Those players investing in not only technology that can change rapidly and remain flexible – but people and processes nimble enough to adapt will see great success as we build past NSR’s “$1T Cumulative Global Space Economy.” (For those attending or accessing the Space Symposium Online, be sure to check out NSR President Christopher Baugh’s panel discussion Tuesday, August 24 at 5:45ET with some of the leading players in building this new LEO ecosystem to hear their perspectives.)