The use of armed surveillance drones has been a matter of international contention for human right defenders, but that hasn’t deterred defense forces from across the globe to continue using drones, calling them a ‘necessary evil’. NSR has tracked this market for over a decade, and has noted how drone usage increased during President Obama’s time in the Oval office. But despite the uncertainties over changes in the new Administration’s drone policy , one thing is certain: commercial satcom vendors will not stand to lose as the U.S., the largest UAS fleet operator, is poised to adopt a more aggressive global stance against terrorism to keep its election promises.
The escalation of conflicts in Asia and Middle East under the new U.S. Administration is a picture of foreign affairs that has attracted more attention with the new Administration’s policy stance during the election. This leads NSR to believe that one of its forecast scenarios of ~50% of capacity revenues being generated from UAS over these regions could take place. Taking stock of these developments , NSR’s UAS – Satcom & Imaging Markets, 3rd Edition report forecasts in-service units to almost double between 2015 – 2025 at a CAGR of 8.5%, leading to an increase in COMSATCOM capacity leasing revenues for these vehicles above $300 million annually by 2025.
This growth in capacity revenues from the UAS sector will however not be evenly distributed among frequency bands, as the appeal of FSS Ku-band slowly starts to deteriorate with newer airframes being built with multiple-band capabilities for catering to military demand for interoperability and having greater operational flexibility. Difficulty to jam a signal and availability of surplus bandwidth at lower $/Mbps provides good opportunities for GEO-HTS capacity leasing being favored within the military, and NSR estimates ~10% of global UAS will fly on such capacity by 2025. An important finding of this report however was the growth in UAS airframes outside of the U.S., and it will not be a surprise if a more aggressive U.S. under the new administration spurs a ‘drone race’ globally in the name of security and strategic force, leading to greater opportunities for commercial satcom players for supporting the ever-increasing number of bandwidth consuming sensors onboard these UAS.
A constant pain for the COMSATCOM industry, in spite of the positive trends that the UAS industry has shown in the recent past, is the traditional procurement process adopted by the military. The success of the Pathfinder-1 program (started in 2014), after a shaky start, has opened avenues for sustainable long-term capacity procurement, by moving away from the expensive on-the-spot market capacity and purchasing it from dedicated funds rather than the Overseas Contingency Operations funds. However, the failure of the Pathfinder-2 program to kick-off still looms large over the current Pathfinder-3 program, as the U.S. DoD looks to purchase pre-launched transponders aboard commercial satellites, serving regions beyond the U.S. NSR expects the new U.S. Administration to be more private-industry friendly, which could help the Pathfinder-3 program materialize favorably for COMSATCOM players.
The new U.S. President may believe that his nation should not meddle in global affairs, but he will find it difficult to shy away from the role of global superpower, and do away with a powerful legacy of combating terrorism without putting soldiers at risk. The change of the guard at most powerful office at a time when global conflicts are only escalating leads NSR to believe that the trajectory for UAS growth will only point upwards, signaling a positive trend for the otherwise slow moving government and military satcom market.