London, 23 February 2023. – Euroconsult, a global consulting firm for satellite-enabled markets, reported in their latest edition of FSS Capacity Pricing Trends that fixed-satellite service (FSS) capacity pricing is decreasing at a rapid rate. This is due to services supported by next-generation geostationary (GEO) and non-geostationary orbit (NGSO) HTS systems such as Starlink undercutting the market. At the highest industry level, FSS capacity pricing continued to erode in 2022, as the global volume of leased and used capacity increased at a rate that outpaced the growth in satellite operator revenues.
Over the past five years, global averages for capacity pricing in video and data markets have fallen by approximately -20% (-4% CAGR) and -67% (-20% CAGR) respectively. Euroconsult’s newly introduced forecasts anticipate this general trend continuing for data markets over the next two years with annual declines of -8% to -15% projected across most regions.
The influence of both GEO-HTS and NGSO-HTS capacity is expanding both regionally and vertically in terms of market reach. However, while the coverage of NGSO broadband constellations is near-global, regional HTS capacity pricing dislocations are likely to become further pronounced over the coming years, notably in regions such as Russia and South Asia where national regulatory and import substitution policies are likely to limit near-term impacts of new, lower-cost HTS capacity supply.
The scale, compelling value, and capability offered by Starlink and other next-generation GEO-HTS systems and NGSO-HTS constellations may mark the onset of a structural shift away from the traditional model of wholesale leasing of dedicated (uncontended) bandwidth by service providers towards the resale of best-effort (contended) managed broadband offerings supplemented by value-added service add-ons. Starlink’s equivalent price per GB of priority data was found to be 10 to 50 times lower than the vast majority of competing legacy offerings on the market today, and at a similar or lower total monthly cost.