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Space has just got a little more crowded, with the satellite industry preparing for a major shift.
SES — otherwise known as the Satellite Communication Service Provider — has made a power play that is likely to challenge Starlink and change the future of satellite technology.
The company has announced an agreement to acquire Intelsat. For a cash consideration of $3.1 billion, the company will purchase 100% of Intelsat Holdings’ equity.
While the deal is expected to go through after regulatory clearance and filings in 2025, work is already on the way to build a combined powerhouse.
Techopedia talked to experts in the satellite industry to understand how impactful the merger will be and uncover the trends, tech, and demands of an industry where the sky is the limit.
Key Takeaways
- The SES-Intelsat consolidation strengthens the combined entity’s market position, potentially challenging Starlink, especially if they enter the (Low Earth Orbit) LEO constellation game.
- LEO constellations’ affordability, ease of launch, and lower latency make them attractive to data providers, service companies, and investors.
- Advancements in in-orbit servicing, smaller satellites, and AI integration are shaping the future of the industry. Quantum communications and in-orbit manufacturing hold revolutionary potential.
- While established players like the merged SES-Intelsat and Starlink are important, space startups and a robust supply chain will also play a vital role in driving innovation in the satellite industry
SES and Intelsat: When Two Satellite Giants Become One
By joining forces, SES and Intelsat become an even larger player in the multi-orbit satellite market
The growth of the satellite sector is driven by government, commercial, and consumer demands.
These areas represent the biggest clients for satellite providers and are responsible for new technologies like Optical Inter-Satellite Links (OISL), advances in telemetry, control, navigation, and automated manufacturing.
Sylvester Kaczmarek, chief technology officer at OrbiSky Systems and a specialist in integrated artificial intelligence (AI), robotics, cybersecurity, and edge computing in the aerospace realm, spoke to Techopedia.
He said:
“This merger represents a major consolidation in the satellite industry. It will likely result in increased market share and influence as the combined entity will hold a stronger position in the market.”
Kaczmarek explained that the merger also has the potential for cost savings and efficiencies, which might lead to more competitive pricing and further investment in new technologies.
“In addition, with fewer major players, innovation and pricing dynamics could be affected.”
But the move is not expected to happen overnight, as both companies face sophisticated next steps to consolidate operational technologies.
“Integrating disparate technologies and cultures, alongside navigating regulatory hurdles, underscores the hidden complexities and costs that can delay the benefits of such mergers,” Kaczmarek said.
Kaczmarek said that an increased demand for broadband, particularly in underserved regions, is also fueling new projects.
“The growth of IoT and connected devices necessitates robust satellite connectivity. There is also a focus on low-Earth orbit (LEO) constellations, which offer lower latency and higher throughput.”
Danielle Stepien, who worked with SpaceX and Amazon´s Project Kuiper and is today the CEO and President of Igniter Engineering, also spoke to Techopedia about the merger and the industry.
“This merger will affect the way satellites are made by large corporations for decades to come.
“Smaller companies will continue to push it further, I can name many. They have changed the sector by innovating at a speed no industry veterans thought was possible.”
How the SES-Intelsat Merger Impacts Starlink
While the Elon Musk-founded Starlink has a strong presence in LEO — Low Earth Orbit — the company solely operates in this orbit. In contrast, SES and Intelsat are to date not focused on consumer LEO satellites, but on multi-orbital operations.
Christof Kern, Business Development Lead Satellite and Space, TTP, spoke to Techopedia.
Kern explained that both SES and Intelsat have relatively little exposure to direct satellite broadband consumer markets, which are still Starlink’s direct target markets.
“A combined SES-Intelsat could easily do LEO. However, satellite economics favor MEO constellations if done properly. The human population only covers about 5% of the planet’s surface, so LEO satellites aren’t in use some 90 to 95% of the time.
“They can — and have done in the past — integrate some Starlink offerings into their portfolio if customers ask for it, adding them into their multi-orbit-multi-frequency band fleets to provide even higher resilience and diversity,” Kern said.
“If absolutely necessary, and if customer demand is consistent and sufficiently large, they could always invest in their own LEO fleet going forward given their combined size.”
Understanding Earth Orbits Markets and Technologies
To understand how the merger of SES and Intelsat can drive competition into high gears, it’s essential to understand Earth’s orbits and which orbits companies master today — each orbit has its own market and unique characteristics.
GEO and MEO Orbits
The Business Research Company predicted that the GEO market will reach $20.94 billion in 2028 at a compound annual growth rate (CAGR) of 5% driven by growing demand for telecommunications services.
“GEO is highly prized for its stable, fixed viewpoint relative to the Earth,” Kaczmarek said. “This unique position is critical not just for communication and broadcasting but also for strategic surveillance and defense purposes.”
On the other hand, Mordor Intelligence set the MEO sector’s value at $47.44 billion in 2024 and says it is expected to reach $80.15 billion by 2029. The big players in this orbit are the commercial, military, and government sectors.
Companies like Lockheed Martin, Airbus Defense and Space Company, Northrop Grumman Corporation, Boeing Company, Thales Group, and organizations like NOAA, NASA, USAF, the US Navy, and DARPA have built their reputations in GEO and MEO orbits.
The Russian satellite industry is also well-established and advanced, while China is rapidly catching up.
LEO Orbit
In contrast, the LEO satellite market is expected to grow from $12.6 billion in 2024 to $23.2 billion by 2029, according to Markets and Markets. The sector is scaling for good reasons. From data providers and service companies to investors, everyone sees the potential in LEO and more versatile, affordable, and easy-to-launch technology.
“LEO is becoming the frontier of competitive innovation in satellite technology, primarily due to its proximity to Earth, which reduces transmission delays and power requirements,” Kaczmarek said.
“The main industry secret is the technological and logistical ballet required to manage these constellations. Operators must constantly maneuver satellites to avoid collisions and manage frequencies to prevent signal interference, involving sophisticated algorithms and often real-time decision-making.”
Innovation and the Future of Satellites
While the future of the satellite industry will undoubtedly be shaped by the heavyweight names in the satellite industry, new startups, and an expanding supply chain, will play a critical role.
A report by Space Capital found that global investments in space startups jumped 31% in the fourth quarter of 2024. The venture capital firm said funding in space companies rose to $4.6 billion in the quarter, taking the total for 2023 to $17.9 billion.
Additionally, launches are at an all-time high. The Space Foundation reported a 33% increase in U.S. launch attempts, a 50% year-over-year growth in commercial launches, and a 23% year-over-year rise in satellite deployment.
“On-orbit servicing is prolonging satellite lifespans and mitigating space debris,” Kaczmarek added.
“There are smaller, more affordable satellites that are opening up new applications and business models. In addition, the integration of artificial intelligence in operations is optimizing resource management and operational efficiency.”
“Innovations like quantum communications and manufacturing satellites in orbit are poised to revolutionize satellite capabilities and economics.”
The Bottom Line
The SES-Intelsat merger signifies a significant consolidation in the satellite industry, potentially leading to a powerful market player with wider coverage, enhanced services, and robust resources. This powerhouse could pose a serious challenge to Starlink’s dominance, particularly if it decides to invest in LEO constellations.
While established players like the merged SES-Intelsat and Starlink will undoubtedly shape this future, innovation from startups and a flourishing supply chain will also play a critical role.
As investments in space ventures soar and launch activity reaches new heights, we can expect even more revolutionary advancements in satellite communications, data transfer, and space exploration.
