Euroconsult has quantified the heavy impact of the Covid-19 pandemic on satellite services for the maritime market. With in depth detail on maritime communications market dynamics today and over the next ten years, the research highlights coming opportunities for consolidation and how non-geostationary orbit (NGSO) satellite constellations will change the playing field.
There was a surprising disparity in the effect of the pandemic on various sectors of the market. Demand for satellite connectivity for cruise ships plummeted with an 80 per cent reduction in active VSATs compared to the previous year. However, the demand for satellite connectivity for the merchant shipping industry remained strong, driven by increased need for crew welfare due to quarantines and longer times at sea because of Covid-19 restrictions. Merchant shipping remains the largest segment of the maritime connectivity market, generating nearly half of the total maritime VSAT service revenue with $584 million in 2020.
Other sectors discussed in the maritime connectivity report include leisure vessels, oil and gas offshore, and the commercial fishing industry. The former two suffered from the pandemic with lowered revenues however, the market for connectivity services for fishing vessels grew by six per cent. Euroconsult forecasts that the fishing industry has further growth potential for mobile satellite services.
With the entire value chain severely impacted by the losses in the cruise, leisure, and offshore markets, 2020 was a year of restructuring for many satellite service providers.
“2020 was a challenging year for the Maritime Connectivity market,” said Xavier Lansel, Senior Consultant at Euroconsult and author of the report. “As service providers lost market share, several entered into the process of reorganisation or reshaped their market approach. As a result, we expect to see consolidation and M&A deals in 2021.”
The report includes projections through 2030, with stabilisation expected in the near term to be followed by growth. The coming NGSO broadband constellations are expected to play a major role in maritime connectivity. Based on newly revealed plans from several NGSO constellation operators, Euroconsult forecasts that these new entrants will capture half of the market for leased capacity by 2030.