Satellite-based 5G Network Market Trends

Growth Drivers

• Rising demand for remote connectivity: The growing demand for seamless rural and remote connectivity is driving the satellite-based 5G network market. Remote connectivity also benefits the defense sector with high-speed connectivity solutions in places where terrestrial infrastructure is limited. Due to the limitations of traditional mobile networks and broadband, satellite-based 5G networks position themselves to effectively address the pain point.
  
  Governments and global organizations have identified the potential of satellite-based connectivity solutions and are increasingly pushing to integrate them. For instance, in September 2023, the European Union announced the EU Secure Connectivity Program from 2023 to 2027 to build a multi-orbital satellite constellation focused on high-speed connectivity in remote areas. Owing to the tremendous growth potential, more companies are investing in non-terrestrial network solutions. For instance, in October 2024, Ramon.Space and Radisys announced a partnership to develop space resilient non-terrestrial 5G network solutions.
• Growing adoption of autonomous vehicles and unmanned aerial vehicles (UAV): There is a global surge in adoption of autonomous vehicles (AVs) and unmanned aerial vehicles (UAVs) that require real-time communication with ground control systems. This boosts the demand for non-terrestrial satellite-based 5G solutions. For instance, in February 2023, NOVELSAT and Guidant announced a partnership to boost the safety of autonomous systems with space connectivity. universal connectivity is vital for autonomous mobility.
  
  Additionally, unmanned aerial vehicles such as drones require universal connectivity to function, which traditional networks may be unable to provide. This has prompted commercial entities and government enterprises to increase funding for space connectivity solutions to boost air mobility. For instance, in July 2024, the UK Space Agency funded Skyports Drone Services and initiated Connectivity for Remote Orkney Future Transport (CROFT) to explore space technologies and 5G integration for drone deliveries.
• Industry 4.0 initiatives and surge in IoT applications: The large-scale proliferation of IoT in smart devices that have integrated seamlessly into day-to-day life is driving demands for satellite-based 5G network connectivity solutions. IoT applications in sectors such as healthcare, logistics, agriculture, etc., require low-latency solutions to complement where terrestrial infrastructures fail. For instance, in April 2024, Intelsat and CNH announced a collaboration to install and operate rugged muti-orbit satellite terminals on CNH farm equipment operating in remote farmlands in Brazil leveraging Intelsat’s global network.
  
  Additionally, there is a global push for Industry 4.0 to digitize the manufacturing sector, and 5G is set to play a pivotal role, boosting demands for satellite-based 5G solutions in areas where terrestrial infrastructure is limited.

Challenges

• High costs of deployment: The substantial capital required to launch and maintain satellite infrastructure is a major satellite-based 5G network market constraint. Deploying satellites of varying orbit heights involves significant costs in manufacturing to launch, and then there are additional maintenance costs. Additionally, a satellite-based 5G network must also be supported with a robust ground infrastructure, such as user terminals. This can lead to an increase in price of the eventual product in comparison with traditional 5G networks. The entry point barrier in the market for new players due to the high investment burden can also stymie the satellite-based 5G network market’s growth.
• Stiff competition of terrestrial networks: Satellite-based 5G networks face stiff competition from terrestrial 5G networks. Satellite-based connectivity solutions are susceptible to adverse weather conditions due to rain fade. Additionally, bandwidth limitations can cause congestion during peak usage, crippling service quality. This can deter consumers from adopting satellite-based 5G networks compared to traditional connectivity solutions. A major challenge is to be commercially viable in urban areas where alternatives like fiber-optic and terrestrial 5G networks are available to improve revenue segments.