NSR Report: Satellite Capacity Prices Stabilizing, but Looming LEO & VHTS Competition Point to Renewed Pressure

Cambridge, Mass., April 7, 2021– NSR’s latest report, Satellite Capacity Pricing Index, 7^th Edition (2021) finds capacity price declines decelerating in 2021, with the global mean price index declining by ~5-6% in Q1 2021, in contrast to ~13% in Q1 2020. This decline is projected to slow further in 2022, with signs of inflation-adjusted price stabilization across several regions, bands, and applications ahead of full deployment and global commercialization of LEO mega-constellations and launch of delayed VHTS programs.

2020 was an inflection year for the industry, not only because COVID-19 precipitated restructuring programs and drove maritime and aero businesses into standby mode, but mainly because LEO mega-constellations made enormous progress, with SpaceX in particular achieving unprecedented cadence levels in satellite manufacturing and launch.
 
“While contract renegotiations took place across the satcom value chain to address a black-swan drop in demand, unit pricing nears stabilization across several sectors, as forecasted by NSR in previous editions of this report. However, for high data rate applications, the current environment may be the calm before the storm as VHTS satellite programs enter the picture in time for the inevitable competition of LEO mega-constellations,” states Carlos Placido, NSR Senior Analyst and report author.
 
Consumer Broadband is a quite unique HTS-driven application that is at the heart of the LEO revolution. “In this new edition of the Pricing Index, NSR began to dive into new ways to benchmark HTS satellite broadband pricing. A new, parallel approach provides additional data points for current and future analysis of this fast growing and changing segment,“ states Joseph Ibeh, NSR Analyst and report co-author.
 
From broadcasters and DTH operators seeking to optimize satellite distribution costs to residential broadband users considering higher service costs in exchange for faster connections and unlimited traffic, to MNOs requiring higher speed and more symmetrical backhaul connections, to value-chain shifts in managed enterprise VSAT, to mobility users eying a multi-orbit future; every application and region experiences varying degrees of price dynamics and future prospects at such pivotal times.