Satellite Internet Market Trends

Growth Drivers

• National security, defense and government resilience requirements: Defense and homeland security agencies are integrating the satellite internet into the secure and resilient communications architecture. The U.S. CSPS June 2024 report depicted that the FY 2025 Space Force budget request of USD 29.6 billion directly relates to the market through allocations for proliferated satellite constellations, resilient SATCOM, and commercial integration. NATO and allied governments similarly emphasize satellite networks for command, control, logistics, and cross-border coordination, mainly under the degraded terrestrial network conditions. Satellite internet also supports border surveillance, disaster response, and continuity of government operations. The demand in this segment prioritizes assured capacity, geographic redundancy, and compliance with defense-grade procurement standards, favoring providers capable of long-term service assurance rather than low-cost access models.

​Space Force Budget Growth (2021-2025)

Source: CSPS June 2024

• Government broadband subsidies and universal service funding: The public funding mechanisms are a primary demand accelerator for satellite internet adoption. In the U.S., the FCC in December 2024 indicated that the process for large satellites can cost up to USD 500 million. This budget directly affects the capacity expansion, pricing, and supplier concentration in the satellite internet services. These costs determine which firms can deploy and sustain satellite broadband infrastructure. Further, the government-backed broadband programs across North America and Europe are expected to support the connectivity for remote premises, with satellite forming a core delivery mode in the highest-cost geographies. Satellite operators that demonstrate compliance with subsidy performance, reporting, and service-level obligations are best positioned to secure multi-year government contracts.
• Resilience as a critical infrastructure requirement: Resilience is now a formal requirement for the critical infrastructure mandated by the government policy and corporate governance. Following major cyber-attacks and natural disaster sectors such as finance, energy, and emergency services must maintain operations during the terrestrial network failures. This shifts satellite communications from a contingency tool to a core integrated component of enterprise risk management and software-defined wide area network architectures. The result is a predictable recurring demand for resilience as a service, dedicated high availability satellite links that ensure continuity. This driver creates a stable B2B market less sensitive to consumer pricing, focused on guaranteed uptime and seamless failover capabilities for essential services.

Challenges

• Complex regulatory and spectrum licensing hurdles:  Gaining national and international regulatory approval for the spectrum use and orbital slots is a multi-year, complex process. Entrants must navigate bodies such as the ITU and national regulators. Amazon’s Project Kuiper has spent years securing its FCC license, which was granted under strict conditions, including a requirement to launch its satellite constellation. Failure to meet the deadlines can result in the license revocation, creating a high-stakes timeline.
• Launch capacity and logistics bottlenecks: Access to affordable, reliable launch services is a major bottleneck. The global launch manifest is crowded, and new entrants compete with the established players, such as SpaceX, for slots. AST SpaceMobile, building a cellular broadband constellation, has faced significant delays due to launch scheduling and readiness, pushing back its operational timeline and impacting investors' expectations, and illustrating how launch logistics are a vital path dependency.