As both the satellite and cellular industries explore use cases, services and business models to shape their approach to integrated 5G non-terrestrial networks (NTNs), what are analysts saying about the market opportunity?
The past two years have already seen some notable developments in the 5G NTN market, including Apple’s deal with GlobalStar to support smartphone manufacturers’ direct-device emergency service offerings, and Qualcomm’s withdrawal from a contract with Iridium to develop NTN chipsets that will only work on Iridium’s proprietary network.
Here are four analyst perspectives on the 5G NTN market, one of which focuses specifically on the opportunity for direct-to-device connectivity and its potential future developments.
-ABI Research predicts that annual service revenue from satellites will reach $124.6 billion by 2030, with NTN’s mobile division in particular “potential to reach a market value of approximately $18 billion with up to 200 million connections by 2031.”
“The introduction of satellite-enabled mobile devices from major consumer smartphone and chipset manufacturers such as Apple, Qualcomm, Motorola, MediaTek, Huawei and ZTE signals that satellite communications services are entering the mainstream consumer market,” said Andrew Cavalier, satellite communications industry analyst at ABI Research, adding that “the growing potential for global IoT connectivity is driving further innovation in the satellite industry.”
“The market is rapidly evolving, with many services finding enhanced deployment through strategic alliances and increased bandwidth supply in LEO,” added Jake Sanders, vice president, Asia Pacific, ABI Research. “As satellites get smaller, cheaper and reach closer orbits, barriers to entry are lowering, spurring innovation and expanding the reach of satellite-based services and applications. The market is revealing new development paths that will impact terrestrial and non-terrestrial connectivity markets and shape opportunities for companies across the communications value chain.”
-Market analysis firm Lucintel published a report on 5G NTN market forecasts in January 2024, stating that the future of the market is “promising” with opportunities in the maritime, aerospace, defense, government and mining markets. The company predicts that the 5G NTN market will reach $27.7 billion by 2030, with a compound annual growth rate of more than 33% from 2024 to 2030.
Lucintel expects the maritime market to show the highest growth rate due to the diverse applications and services available on yachts, and the seamless connectivity and high data rates expected from 5G NTN. By region, North America is expected to show the highest growth rate.
-Global Market Insights estimates the 5G NTN market to be worth approximately $4.2 billion as of 2023, and expects it to grow at a CAGR of 35% through 2032, reaching approximately $80 billion by the end of the forecast period. The company cites “growing demand for ubiquitous, high-speed connectivity around the world” as a driver of the market. Aerospace and defense applications account for an estimated 35% of the market, with maritime, government, and mining making up the other major market segments. The company concludes that 5G NTN will be a “key driver of innovation and efficiency in the aerospace and defense sector,” and that 5G NTN will provide “enhanced data transmission, improved reliability, and expanded coverage” that align with aerospace and defense operational needs, providing capabilities to support autonomous systems including UAVs, remote sensing, and mission-critical communications. GMI also believes that North America is currently the leading region for the 5G NTN market.
-NSR (part of Analysys Mason and focused on the satellite market) expects operator NTN revenue to grow by $32.5 billion between 2022 and 2027, according to Analysys Mason forecasts. Satellite Strategies for Telecommunications Carriers program.
But in a March 2024 blog post about the D2D market, NSR principal analyst Lluc Palerm described the D2D market as split into four phases, not all of which are particularly profitable, especially in the near term. “The direct revenue opportunities in the early years are mostly negotiable,” Palerm said. [of NTN D2C] “Emergency response capabilities are low,” it said, pointing out that currently available systems are limited to providing basic emergency alerts and messages.
For systems using pre-Release 17 technology, “the amount of available bandwidth is not sufficient to support advanced voice and data services directly to unmodified phones at scale,” he concludes, adding that even for companies planning to use terrestrial spectrum from space for direct service to existing phones and compatible devices, “initial offerings of these constellations will be limited to emergency alerts and messaging.”
This is a tough situation because, he continues, “there is only a limited number of consumers willing to pay for emergency alert and messaging services.” Analysys Mason predicts that potential revenues from NTN-based emergency alerts will be less than $100 million globally by 2032. Revenues from direct-to-device messaging are expected to be slightly higher at $500 million globally. Instead, NTN emergency services are expected to be a service differentiator for competitive purposes. “While the direct revenue opportunity for Mobile Network Operators (MNOs) may not be large, end users value these potentially life-saving features. MNOs should focus on incorporating these satellite D2D services as a differentiator from their competitors,” he writes.
But revenue prospects are not entirely absent. Palerm sees much larger revenue opportunities in voice and broadband data, which, when made available over NTN, “will create a vast and accessible market.” That market will be comprised of “demand from leisure travelers, rural residents, IoT, first responders and many others who want to stay connected outside of limited terrestrial network coverage, driving market penetration and adoption rates. With global coverage, reliable connections and consistent data speeds, the revenue opportunities are enormous.”
But this means far more satellites will need to be launched to scale voice and data services. As operators consider partnering in this space, Palerm notes there are key decisions to make, including spectrum strategy (terrestrial or MSS? Which frequencies and spectrum to allocate, and in which regions?), proprietary or standardized solutions, and consumer or enterprise/industrial IoT.
“Successful partnerships will be those that recognize the importance of value chain members and are able to align and enlist the support of players across the value chain,” he wrote.
