The cumulative value of satellite-delivered broadband will be worth some $159 billion over the next 10 years, according to a report from Northern Sky Research (NSR). Video traffic will drive much of the growth.
Over the next decade NSR says that satellite broadband and its related VSAT capacity traffic will grow at 13.4 per cent annually “in the installed base of consumer sites alone”.
“Satellite Consumer Broadband is just scratching the surface of the opportunity, capturing less than 1 per cent of the potential addressable market,” states Lluc Palerm, NSR Senior Analyst and report co-author. “Subscribers are very sensitive to more generous data caps and cost. Consequently, lower capacity pricing will trigger strong demand elasticities. Additionally, the ecosystem is still underdeveloped in many regions. A stronger focus on retail, and newly available capacity, will see accelerated growth. Furthermore, new business models like Wi-Fi Hotspots are proliferating, which would open the lowest segments of the market. Smallcells will drive 43 per cent of Service Revenues by 2027.”
Video is, by a significant margin, the primary driver of data traffic. Multiple offers are now publicising unmetered services for web browsing, email, and other critical functions, but “streaming time allowance” is the main influencer on subscribers’ quality of experience. Limiting video quality to 720p is now standard among platforms so that users can enjoy faster streaming time, albeit sacrificing video quality. Even with these measures, data caps are still very restrictive with the current balance between ARPUs and capacity pricing. However, once prices decline below $100 Mbps/Month, data allowances can grow generously, activating demand elasticities.