While the analyst firm said that M2M services will remain limited in their contribution to service revenues, Euroconsult forecast continued demand in a range of applications and geographic markets by 2020 and that strong demand from commercial markets would, “more than offset a potential slowdown from government users for current military operations, which accounted for much of the growth over the previous 10 years,” the report said.

     Operators Inmarsat, Iridium and Thuraya currently control about 90 percent of MSS market revenues. Last year, MSS operators took in $1.38 billion in total consolidated revenues — an 8.8 increase from 2009. Analyst consensus shows MSS wholesale service revenues expected to exceed $2.2 billion in 2020, with equipment revenues slightly down in the next 10 years due to declining hardware prices.

     Euroconsult Senior Consultant and Principal Author of the report Wei Li attributed the growth to a continued shift from legacy voice services to data applications, supported by the launch of new MSS systems.

    “MSS wholesale revenue is expected to grow roughly 7 percent per year over the coming decade, due to increased demand for broadband and other MSS services in a number of vertical segments and emerging regions. Nevertheless, competition from terrestrial technologies and VSAT services will remain a major limitation for MSS growth,” said Li. “MSS operator Inmarsat has announced its plans to launch global Ka-band satellite service by 2014 (Global Xpress) to counter the current VSAT threat — potentially heating up the competitive atmosphere further if those plans come to fruition in a timely manner.”