A recent report makes an encouraging prediction for the satellite ground station equipment market, projecting it will grow to $6.6 trillion by 2028 – expanding at a 6.89% CAGR beginning this year.
As you’ll recall from recent Signals posts, we’ve spent a lot of time talking about the public safety market, including growth opportunities associated with next-generation 911 (NG911) and the expansion of 988 services. Comtech’s opportunity set, however, remains larger, with two distinct businesses, each of which we believe benefits from a set of long-term growth drivers. We wanted to spend some time today taking shareholders and other financial stakeholders through the basics of this key market.
The first point worth making, especially for newer shareholders: satellite communications solutions are foundational to who we are as a company. The second is that satellite tech – which was once highly-specialized in its application – has become essential across a huge range of daily activities.
The growth forecast for the satellite market highlights why Comtech’s expertise and capabilities matter. The report documents the breadth of this fast-evolving market, noting that a key driver of that change is demand for seamless connectivity everywhere. Strong bandwidth that doesn’t fail is increasingly a must-have, even in (or more accurately, especially in) harder-to-reach parts of the world.
This demand takes many forms, and comes from multiple constituencies – from defense applications in geographies that can’t support traditional communications infrastructure (e.g. mountainous regions), to devices and IoT applications connected and communications flowing on land, in air, and at sea. More broadly, an important part of Comtech’s opportunity in this market relates to the military-to-civilian innovation cycle at play. Solutions that have been used primarily by governments often have major downstream commercial applications for the private sector. A great example of this cycle for Satellite & Space comes from the oil and gas industry where companies need reliable data flow regarding the status and function of pipelines in harsh environments. Another opportunity would be to outfit rural communities that do not have legacy infrastructure with technology to support their need for digital connectivity to support emerging, everyday activities, such as remote learning.
At Comtech, we offer a variety of solutions for customers looking to alleviate these types of communications challenges, including our VSAT and troposcatter technologies. However, we are also a leading supplier of satellite components that are key for establishing satellite connectivity. In fact, we recently announced a new line of Digital Common Ground modems that will be beneficial for both defense and commercial customers. These solutions represent a significant opportunity for Comtech as customers such as the Air Force enter new upgrade cycles for their communications equipment. We’ve also already discussed how we have and will continue to capture more of the troposcatter market. We’re excited to see the industry reporting on what we’ve been saying all along, and look forward to continually demonstrating that dependable satellite communications is synonymous with Comtech.
Forward-Looking Statements
Certain information in this blog post contains statements that are forward-looking in nature and involve certain significant risks and uncertainties. Actual results and performance could differ materially from such forward-looking information. The Company’s Securities and Exchange Commission filings identify many such risks and uncertainties. Any forward-looking information in this press release is qualified in its entirety by the risks and uncertainties described in such Securities and Exchange Commission filings.
