Experts warn of migration to VSAT as IoT takes off

A Paris-based communications consultancy is warning satellite service providers to reposoition away fgrom L-band as competition from Vsat capable of carrying increased data volumes increases.

Euroconsult is a privately owned first specialising in the space markets. In a press statement promoting its latest market report “Prospects for L-Band, IoT & M2M Markets,” it says the Mobile Satellite Services market, across all industry sectors, will grow from 4.3 million terminals in 2016 to more than 12 million terminals by 2026.

The consultancy says machine-to machine (M2M) and Internet of Things (IoT) devices will have a significant share in this subscriber growth, while their contribution to operators’ revenues should be more limited.

The company also said that diversification and improvement in MSS products should be enabled by recent and upcoming systems including Iridium NEXT (under deployment), Inmarsat’s I-6 (expected in 2020), Thuraya’s next generation constellation and a new generation of hybrid networks from Globalstar and Ligado Networks.  In the statement Pacôme Révillon, CEO of Euroconsult is quoted as saying “Increasing competition from VSAT mobile solutions, due to more efficient equipment and lower capacity costs, is expected to weigh on MSS’s market share in the high-end, high-ARPU markets. MSS operators will thus have to review their positioning and address new segments less addressable by VSAT solutions, such as smaller classes of ships, aircraft, not to mention potential upsides related to connected cars and IoT.”

However the report suggests that maritime MSS wholesale revenues are expected to decrease with a -2% CAGR year (compound annual growth rate) over the next ten years, an effect of the migration toward VSAT solutions in the medium to high-end maritime markets, while low ARPUs of small boats should not offset that churn.

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