The year ahead for the satellite space

The satellite connectivity industry had a massive year in 2022. Starlink said it surpassed 1 million subscribers, SpaceX broke its launch record, Apple spent almost half a billion dollars getting into the satellite direct-to-device game, and a host of startups moved closer to building out their constellations.

Jack Fritz, principal at Deloitte, told Emerging Tech Brew that in 2023, “a lot is going to be building on the foundation that was set in 2022” as more constellations are announced and existing ones continue to launch their satellites. Deloitte predicts this year will end with 5,000 satellites in low-Earth orbit (LEO), up from an estimated ~700 in 2020. If every constellation currently in planning works out, that number could skyrocket to 40,000–50,000 satellites by 2030, per Deloitte.

“I think the financial health of some of the entrants has been solidified over the last year, year and a half. And so now they can move more and focus on forward growth and establishing the business,” Fritz said. “Deals are obviously signed around getting a certain number of satellites launched in kind of defined time windows. Now the clock is ticking.”

Much of this modern space race is in service of the next phase of connectivity. Major telcos, tech giants, and space companies are competing and collaborating to build infrastructure for satellite-based connectivity that aims to provide coverage in remote and harder-to-connect areas, from the middle of the woods to airplanes. But with the growth in satellites for these purposes comes growth in related areas, from space junk removal to management and operations.

Here are some segments of the space industry that experts think will take off in 2023.

Making space

Congestion management—whether it’s physical satellites and debris taking up space or spectrum availability as more satellites compete for radio waves—is an area that Chris Daehnick, senior solution leader and associate partner at McKinsey, said he’ll be keeping an eye on in the coming year.

When it comes to the debris problem, companies like Astroscale are working toward technology that will help remove debris or deorbit satellites. And in 2021, Space Force introduced an initiative called Orbital Prime that provides seed funding for companies specializing in sustainability in space, including deorbiting satellites and collecting space junk.

“There’s a growing concern about the amount of potential debris in orbit, and a big question: At what point will the companies decide that they should do something about this themselves, or will there have to be a mandate of some sort from government agencies? And if so, how can you enforce that?” Daehnick said.

And as far as the available spectrum goes, Daehnick said current spectrum use may need to evolve as more satellites enter orbit.

For his part, Fritz identified space management as a critical, emerging segment as more satellites enter the atmosphere, as working to prevent collisions will be essential, though he noted that the segment is still nascent. According to a Euroconsult forecast cited by SpaceNews, the commercial space situational awareness business could grow from an $82 million market in 2022 to a $1.4 billion market by 2032.

“As the constellations get built out, I think the first area that we’re gonna see outside of just satellites in space is everything around ground operations, manufacturing, supply chain, launching, [and] actually operating the satellites,” Fritz said. “I think that there’s going to be a lot of activity around that.”

For satellite internet in particular, Daehnick said that driving the often high price of user terminals down will be an important step in growing consumer uptake. If satellite-broadband companies can lower costs for consumers, he expects the industry to grow further. Starlink’s terminal, for example, costs $599 upfront and $110 per month, while the average price of broadband in the US ranges from around $36 to $58 per month, according to the 2022 Broadband Pricing Index.

Ultimately, Daehnick emphasized that while the industry will grow in 2023, it won’t be without hiccups.

“Eventually, we’re gonna see some failures, too, just to be candid. There’s no area of business where everybody is successful. So at some point, you’ll start to see a shakeout and the consolidation of some of these concepts. I don’t really expect that next year yet, but you never know,” he said.