Downstream Segment To Drive Growth Of Space Systems: Report

A recent report says the growth for space systems will continue on an upward trajectory with increased demands for bandwidth required for autonomous cars, IoT, digital healthcare, AI/ML, the metaverse and video streaming. This growth will mainly be supported by downstream services.

The report reveals that as space systems evolve, organisations across industries will have the opportunity to leverage downstream capabilities to transform their businesses.

Downstream services include satellite communications, mobile satellite services, earth observation services, position and navigation services. Its use cases will benefit large population segments and will drive the demand for satellite communications as well as related upstream activities (such as satellite manufacturing and launch, ground equipment and satellite operations). 

Private investments in space companies, especially from VCs, was more than USD 14 billion in 2021 and investors will increasingly look at services in the downstream segment to realise returns, the report found.

The global space economy is estimated to be worth more than USD 350 billion and is expected to grow at a CAGR of about 5 per cent over this decade. The market, currently, includes revenues from upstream activities such as satellite manufacturing and launch, ground equipment (network equipment, gateways terminals, etc.). 

But the increased bandwidth required for autonomous cars, IoT, digital healthcare, AI/ML, the metaverse, and video streaming over the next few years is expected to add to the demand for data and satellite communication services. Downstream opportunities will, thus, increase.

Speaking exclusively to BW Businessworld, Rajaneesh Kini, CTO, Cyient said, “Downstream segment will be the biggest growth driver for Space systems. This is specifically about three areas: satellite communication-related capabilities for broadband usage, mining industry and utilities industry. Even a common household on Earth will leverage satellite-based communication as it is becoming cheaper and cheaper.”

The Everest Group report also said that the increasing use of data in remote sensing and earth observation will lead to newer regulations around the ethical use of data to ensure privacy and prevent unauthorised access and ownership of ground-level data.