Further integration and consolidation expected in a fragmented service provider market
Paris, Washington D.C., Montreal, Yokohama, March 8, 2018 – According to Euroconsult’s newly-published report, Prospects for Maritime Satellite Communications, satellite connectivity in the maritime market will face booming bandwidth requirements coming not only from bandwidth–hungry passengers and crew but also from the overall development of smart applications.
The total number of terminals used by the maritime satellite communications market experienced limited growth in 2017, with an increase of 0.7% year-over-year. However the VSAT market scored 18.8% growth in 2017, exceeding 23,000 terminals. Meanwhile the number of MSS terminals decreased by 0.4%, reaching 314,300 terminals. VSAT technology is starting to be taken up by the medium and small vessels market and this is gaining traction as operators are increasingly willing to migrate from MSS to VSAT solutions.
“Increased demand from passengers (especially in the cruise and leisure segment), regulatory incentives on safety communications, crew and passenger appetite for enriched content, and newly developed concepts related to smart shipping are some of the major factors pushing maritime operators to install the latest generation of satellite systems on their vessels. Autonomous shipping, performance monitoring, fleet management and cyber-secure applications, brought by an increasing number of IoT-connected and sensing devices, will drive capacity demand in the next decade,” said Florent Rizzo, Consultant at Euroconsult and editor of the report. “For the maritime market, if all satellites are launched as planned, the total available HTS satellite capacity over oceanic regions will grow almost 10-fold from 2017 to 2020, to cater to the ever-growing demand. The hardware, such as receiving antennas and modems, is also evolving rapidly; smaller, lighter, and more efficient antenna systems are gaining traction as the industry continues to evolve.”
Euroconsult forecasts that the maritime satcom market (both MSS and VSAT) will grow to more than 500,000 terminals in 2027 as compared to 337,300 terminals in 2017. Total revenue for satellite operators should grow from $953 million in 2017 to $1.6 billion by 2027, a 10-year CAGR of 5.2%. The revenue for maritime service providers is estimated to grow from $1.8 billion in 2017 to $2.9 billion in 2027 with a 10-year CAGR of 5.3%.
Consolidation in the past several years has enabled leading VSAT service providers to gain market share and the five largest companies hold 90% of the market. Competitive pressure is increasing; the development of new VSAT terminal installation facilities and the democratization of the technology are lowering entry barriers for regional service providers, especially in the Asian and Middle East markets. Still, greater competition combined with the need to improve profit margins and leverage economies of scale will favor further integration and consolidation in the value chain.
About the Report
Prospects for Maritime Satellite Communications provides an in-depth view of the sector dynamics, analysis and forecasts for the maritime satcom market. Five comprehensive sections give a detailed analysis of trends and prospects within the major addressable maritime market segments, including merchant shipping, fishing, passenger ships, leisure vessels, and offshore.