Aug 29, 2023

What does the COTM addressable market look like today and how will it evolve? August 28, 2023 If, like me, you were privileged enough to attend this year’s SATELLITE Show or Aircraft Interiors Expo, you’ll have noticed the uptick in vendors showcasing flat panel antennas. In a clear admission of where the satcom hardware market is heading, well-known incumbents, notably Intellian and Hughes Network Systems, have very publicly joined the development race having operated in the shadows for so long. Another indicator and, one of the key themes of 2023’s event season, is the increasing number of concepts progressing to the final throes of verification testing and, in some cases, early production. This all aligns nicely with the commercialization of Non-Geostationary orbit (NGSO) satellite capacity – a key dependency for flat panel antenna adoption. Both the Starlink and OneWeb Low-Earth Orbit (LEO) constellations have reached a scale capable of delivering global coverage and SES will soon switch on services from its new mPOWER satellites to augment existing O3b capacity. At the time of writing, most of the demand for LEO services has come from fixed applications, particularly the provision of residential broadband, as well as government and enterprise networks. Subscribers in these categories are estimated to account for more than 99 percent of the 1.5 million users Starlink has amassed since launching beta services in 2020. Naturally, shipments of Starlink’s low profile user terminal have also flowed in this direction, leaving comms-on-the-move (COTM) a relatively niche market for now. The anticipation is that this will change over time. What does the COTM addressable market look like today and where is the low-hanging fruit? Note: Size of bubble indicates projected size of addressable market Defining the Addressable Market The low-profile and modular nature of flat panel antennas, packaged with the capability to perform multi-beam, multi-orbit connectivity should make this technology intriguing for any end user in the mobility space. However, turning intrigue into adoption requires market forces to generate high buyer readiness with a blend of low-price sensitivity and low threat of competing technology. The figure below shows how this blend varies by plotting a selection of mobility markets against the perceived threat from alternatives (such as cellular and UHF / VHF) and price sensitivity. The outcome is that some markets already appear to be more attractive for flat panel vendors – though they are not perhaps the largest in terms of addressable market. Here is a look at a number of the markets. Military Globally, the focus in the military segment has shifted toward enhancing resiliency and interoperability through greater use of commercial satellite networks for both broadband and narrowband operations. Many of the world’s largest forces are embarking on a modernization effort that will run beyond 2040, with a scope to enhance the communications capabilities on thousands of aircraft, vehicles and vessels. The U.S. Department of Defence (DoD) Joint All-Domain Command and Control (JADC2) concept is arguably the most significant of these programs as its objective is to connect sensors from all five military services – Air Force, Army, Marine Corps, Navy, and Space Force – into a single network. Multi-orbit and multi-beam flat panel antennas are close to the center of this effort. In Valour Consultancy’s opinion, the immediate opportunity lies in land mobility with armored personnel carriers seemingly the priority ahead of tanks and smaller rabbit vehicles such as the Humvee and Polaris MRZR. While the U.S. military alone has a land-roaming fleet that runs into the hundreds of thousands of vehicles, though command-and-control variants are projected to be the major focal point for the current forecast window (out to 2030), which is reflected in our addressable market estimates. Buyer readiness: high Availability of alternative technologies: low Commercial Aviation In the commercial aviation segment, major service providers are transitioning to multi-orbit networks to shore up coverage and available capacity over busy hubs, such as airports and the transatlantic corridor. To get a sense of the future for flat panel antennas in commercial aviation, one only need consider the strategic decisions being taken by influencers in this sector. Airbus has selected ThinKom’s Ka2517 antenna as the Ka-band option on the Airbus Airspace Link HBCplus programme. The antenna has been selected by Inmarsat and Thales to support each’s respective Ka-band IFC services. Ball Aerospace’s phase shifter-based antenna modules are at the centre of Stellar Blu’s Ku-band electronically steered antenna (ESA), which will power Intelsat’s and Panasonic Avionics’ multi-orbit offerings. Get SAT’s Lesa Blade Ku Air was chosen as the preferred Ku-band option for the HBCplus programme. And Hughes Network Systems unveiled its LEO ESA destined for use on the OneWeb network and announced it had partnered with ThinKom to support ThinAir Plus, a hybrid LEO and GEO solution. Factoring in each of the headlines above, flat panel antennas are expected to quickly infiltrate both line-fit and retro-fit programs in the years ahead. Buyer readiness: high Business Aviation As it stands, there are a limited number of business aircraft that can be considered viable candidates for truly global high-speed satcom solutions because of the relatively small amount of real estate to work with on these jets. As a consequence, a large share of midsize jets, as well as all small cabin jets, very light jets and turboprops have had to rely on air-to-ground (ATG) connectivity (if available in the region of operation) and/or low gain L-band antennas, which provide limited bandwidth. But the development of much less invasive ESAs will expand the addressable market in the business aviation sector, allowing many smaller aircraft variants to take advantage of high-speed satellite connectivity. This trend is evidenced by one of the major players, Satcom Direct, is known to be working with Gilat, QEST and Stellar Blu on separate ESA products for its Plane Simple product line. There is also a chance business jet owners will install ESAs onto larger aircraft with an existing tail mount antenna or ATG antenna to boost redundancy. This is something Hughes Network Systems is positioning in the commercial aviation space and will undoubtedly encourage as part of Gogo’s Galileo offering. Buyer readiness: high Passenger Vessels (Cruise / Ferries) In the cruise market, the emphasis is on improving the passenger experience by augmenting existing GEO-based connectivity services with capacity from LEO and Medium-Earth Orbit (MEO) satellites. Vessels in this category tend to have no concerns with limited space, nor is price sensitivity a major barrier, unlike in other maritime verticals, such as fishing. In fact, the discrete design of the LEO-only Starlink terminals has made it possible to install more than a handful of them on a single vessel alongside existing VSAT services, generating much needed redundancy. At the time of writing, the following cruise operators were signed up to install Starlink hardware on all or part of the respective fleets: American Cruise Lines, American Queen Voyages, Carnival Corporation, Hurtigruten, Norwegian Cruise Line Holdings, The Royal Caribbean Group, SeaDream Yacht Club, Windstar Cruises, Aqua Expeditions and Lindblad Expeditions. With so many cruise liners now opting for this approach, this trend is expected to continue throughout the sector with vessel owners keen to ensure the passenger experience is better than the competition. Buyer readiness: high Availability of alternate technologies: medium Leisure Vessels Beyond performance, owners of superyachts care deeply about aesthetics. Historically, radome quantity and size have been features to brag about among this group. Flat panel antennas threaten to do away with the dome-shaped radome we’ve become accustomed to with today’s maritime antennas but there’s a feeling that the availability of flat panel antennas will shift to something of a “shiny new toy syndrome” where adoption is driven by the need to have the latest technology. This is another segment where Starlink has found traction, laying claim to some of the 1,500 to 2,000 super yachts, which Valour Consultancy estimate sit within the global leisure fleet and the expectation is that adoption rates will continue to rise, spreading to smaller vessels. In more good news for flat panel vendors, our understanding is that super yachts can accommodate up to 12 individual flat panel antennas, and so the size of the addressable market should be quantified beyond a 1:1 or 1:2 ratio (vessels to antennas). Buyer readiness: medium to high Price sensitivity: medium Tapping into the Volume Many of the markets with the largest potential for volume are currently the most challenging because of low buyer readiness/challenging use case generated by high price sensitivity and/or a significant threat from competing technologies, notably UHF / VHF or cellular. Some examples include fishing vessels, command & control vehicles within the first responder segment, high speed rail, long-distance coaches, and merchant shipping. But it’s worth acknowledging that we’re already seeing some low-level activity in a number of these challenging markets thanks in part to the introduction of lower cost LEO only solutions. In Western Australia, for example, the police force is currently in the process of trialing Starlink services and has equipped at least one squad car with the associated hardware with a view to deploying across its fleet. Over time, barriers to entry are expected to ease further as the cost per unit continues to fall thanks to manufacturing efficiencies and familiarity with hybrid networks (underpinned by a combination of satellite and terrestrial services) grows. According to Valour Consultancy’s new report “ The Future of Flat Panel Antennas – 2023 ” cumulative shipments of Ku- or Ka-band flat panel antennas into mobility markets for the provision of COTM will reach 100,000 by 2030. The study represents a deep dive into the provision of flat panel antennas destined for mobility applications and covers 15 industry verticals from within the aviation, maritime and land mobility sectors. VS For more information, email info@valourconsultancy.com.