Modern satellite communication continues to evolve as new service providers explore niche applications that give them an opportunity to compete with the incumbent global providers. This is a area of wireless telecom infrastructure that is noteworthy, as more unique uses cases are explored.
Decreasing costs of satellite launches and lower capital outlays have enabled several new Small Satellite (SmallSat) operators to enter the Internet-of-Things (IoT) market with low-cost and low-power satellite connectivity offerings.
SmallSat IoT Market Development
These new entities seek to challenge the traditional satellite IoT service provider incumbents -- including Inmarsat, Iridium, ORBCOMM, and Globalstar -- to provide a more cost-effective solution for end customers in a variety of industries.
According to the latest worldwide market study by ABI Research, total satellite IoT connections will increase from 10.4 million in 2022 to reach 27 million in 2030 (a CAGR of 12.7 percent).
The upside revenue opportunities are impressive. With satellite IoT connection revenue growing from $2.2 billion to reach $7.8 billion in the same forecast period (at a CAGR of 16.6 percent).
"Reusable rocket technology has driven down the cost of launching satellites into orbit, with prominent players such as SpaceX. Increased competition in the space launch services industry from China, for example, is expected to further drive down launch costs," said Matthias Foo, industry analyst at ABI Research.
Beyond that, CubeSat technology has also enabled quick and low-cost deployment of new Low Earth Orbit (LEO) satellites as they can be built rapidly with standard off-the-shelf components.
Fleet management and Condition-Based Monitoring (CBM) applications -- such as for agriculture, utilities, and environmental monitoring use cases -- are expected to experience high growth rates.
Maritime vessels and aircraft frequently move out of the reach of terrestrial cellular networks, while farmlands, utility network pipelines or infrastructure and environmental monitoring devices are often located in remote areas without reliable terrestrial cellular connectivity.
"As such, satellite connectivity is seen as a suitable option to augment existing terrestrial IoT solutions for these use cases," according to Foo.
Some notable partnerships include the agreement between Shell and Hiber for a satellite-based oil well monitoring solution, as well as Wyld Networks infrastructure monitoring solution provided for a Middle Eastern water utility provider.
Additionally, it can also be observed that traditional terrestrial network service providers are increasingly looking to satellites capabilities that complement their terrestrial IoT service offerings.
Earlier this year, Deutsche Telekom announced a partnership with Intelsat and Skylo to provide global connectivity for IoT devices. Meanwhile, Telefónica has also teamed up with Sateliot to trial seamless connectivity for IoT devices across both terrestrial and satellite networks.
Strategic alliances appear to be the preferred mode of operations, with the announcement of several partnerships between satellite operators and satellite IoT solution providers, and between satellite operators and traditional terrestrial telecom network operators.
Outlook for SmallSat IoT Applications Growth
According to the ABI assessment, more partnerships and collaborations across the satellite IoT market are expected in the future. As the SmallSat ecosystem continues to evolve more industry-specific use cases and associated applications are likely to emerge. IoT apps create large amounts of data, so storage is often a key challenge.
That said, I'm intrigued by these new developments. As the first employee of Iridium North America, back in 1996, I've observed the evolution of LEO satellite technology with keen interest.
I believe that satellite network infrastructure management solutions must improve to accommodate the ongoing growth of LEO payload launches. Therefore, I'll continue to monitor and report on this market.