The satellite industry is undergoing a transformation under pressure from different fundamental trends. Below are some of my observations after I attended Satellite 2024 in Washington, DC last week. The topics discussed at the event, the products on display on the exhibition floor, and the type and background of attendees provide some clues on major trends.
The macro view
Many speak of the satellite industry in terms of “old space” – referring primarily GEO satellite operators – and “new space” which refers to newer trends. These newer trends trace back to the entry of SpaceX into the industry and the innovations it brought in both launch services and LEO satellite design, manufacturing and operation. However, there are factors that equally impact both old space and new space. This includes geopolitics and financing in the first order, followed by regulations among other factors.
On the financing side, there are delays in investments in new projects. The capex-heavy and debt-laden satellite industry is highly susceptible to the vagaries of a high-interest rate environment. Moreover, there is no shortage of capacity in the industry which increases competition among the service providers. This helps to drive prices and profitability lower, and will force greater consolidation in the industry.
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