Predictions for the space industry in 2026

Christopher Baugh (00:05)

Hello and welcome to the Analysys Mason podcast. My name is Christopher Baugh. I am a Partner here at the company and also head of our space research practice. Delighted to welcome you today to what is a very important topic: the space industry and predictions for the year ahead, into 2026.

The topic is massive. Space is changing rapidly — daily, almost hourly now. So we used our entire consulting and research teams at Analysys Mason to formulate our predictions. Today we have our most senior space team in the company to talk through them, some of the broader themes and maybe some specifics too.

There’s a lot to discuss, so let me introduce the speakers first and then we’ll move into more of a roundtable, free-flowing discussion.

First, we have Antoine Grenier. He’s a Partner at Analysys Mason and head of our space consulting practice.

We also have Lluc Palerm, a Research Director at Analysys Mason, working within the space research practice and focused on satellite communications. So Antoine comes at this from finance and strategy, and Lluc from the satellite communications angle.

Last but not least, Claude Rousseau, also a Research Director in the space research practice. Claude focuses more on the upstream side of things — infrastructure build, applications coming from space, and emerging space technologies.

With these three speakers, we’ll cover the full gamut of space predictions. I want to start broadly. Lluc, you’re first.

Looking at 2026, we’ve made a lot of predictions, and listeners can refer to the piece on our website. But generally speaking, 2026 — fill in the blank — is the year of what?

Lluc Palerm (01:53)

I think 2026 is going to be the year of adoption. We’ve been discussing satellite–telco integration for several years now, with some early examples. But it’s clear to me that 2026 will be an inflection point in this trend, and many more telcos and MNOs will see satellite as a complement to their technologies and increasingly adopt it into their networks.

Christopher Baugh (02:22)

Okay, year of adoption. So even the naysayers — for things like direct-to-device, for broadband — the momentum is real, the inflection point is real. You’d see that this year.

Lluc Palerm (02:34)

Yes, exactly. We see consumer interest going up. We see satellite being used in new use cases — extending connectivity into remote areas, telcos using satellite for resiliency. It’s clearly accelerating growth in the satellite industry, but also having a bigger and bigger impact on telcos’ bottom lines.

Christopher Baugh (02:57)

Very good. We’ll treat this as a roundtable, so feel free to jump in. Antoine?

Antoine Grenier (03:12)

Yeah, well, Amazon Kuiper is expected to launch this year. In terms of adoption, that could be quite massive.

Lluc Palerm (03:21)

Yes, absolutely. We’re forecasting very rapid growth in satellite broadband. We’re seeing Starlink almost doubling subscribers this year — from 9 million to 17 million by year-end.

Amazon Kuiper is ramping up launches, so they’ll have an impact too. That said, it’s still early stages for Amazon Kuiper and AST SpaceMobile. These constellations are promising a lot and will definitely have an impact, but 2026 may be a bit early to see a huge effect from them.

Christopher Baugh (03:58)

Wonderful. Almost a new wave of constellations. Blue Origin has announced a new constellation as well. Adoption and deployment will take time, but it’s an absolutely bananas period for news and cycles in the constellation business.

Antoine, turning to you — you work on transactions, buyers, strategy, regulatory and policy work. What does the year ahead look like from your perspective?

Antoine Grenier (04:35)

2026 looks very busy. I agree with Lluc on adoption, but I’d also call it the year of scaling. We’re seeing transactions involving early players that are no longer startups — they’re large scale-ups with strong backlogs, now ramping up and needing more funding.

Beyond that, our predictions include significant reconfiguration of the sector. We expect much more consolidation in the satcom supply chain, particularly among mid-market firms, potentially even an alternative to Airbus Defence and Space in Europe.

Public funding in Europe is changing dramatically — Ministries of Defence, ESA with a budget increase of over 30%. That’s leading to something quite different for Europe. US players are also increasingly looking at Europe as an investment area.

Different types of investors are entering the space sector — deep-tech investors, new VC players, and even debt becoming more prominent. And of course, the potential SpaceX IPO could have major ripple effects.

Christopher Baugh (06:44)

That’s the elephant in the room — the SpaceX IPO. We’ve had a lot of press inquiries on it. The ripple effect could be tremendous if it happens. Would you agree?

Antoine Grenier (07:11)

Absolutely. It’s hard to predict, but many public space stocks have already anticipated it. That suggests space is increasingly seen as a broader investment area.

When it really happens, it could unleash much more investment. Where SpaceX and Starlink deploy that capital is still an open question — there are many layers of growth they could pursue. Everyone will be watching the IPO filings closely. For analysts, that level of transparency would be extraordinary.

Christopher Baugh (08:17)

Let’s turn to Claude now. You cover space infrastructure. From your patch, what does the year ahead look like?

Claude Rousseau (08:37)

Building on what Antoine said about Europe, I think Europe will be more important than ever. Investment is increasing, and we’re seeing more deep-tech funds entering the space business.

We saw large fundraising rounds last year from EnduroSat and Loft Orbital. One word that will define 2026 is control — governments wanting more control over their infrastructure.

Despite commercial constellation announcements, IRIS² is still forging ahead. Italy wants its own constellation, Sweden has announced its own Earth observation satellites. Government is becoming a very important market, not just for legacy players but also startups.

Christopher Baugh (10:06)

Sovereignty really is the buzzword.

Claude Rousseau (10:14)

And budgets are rising too. Germany has allocated EUR 41 billion including space. ESA had a record budget this year. Those budgets need to be spent, which is a real opportunity for the industry.

Christopher Baugh (10:27)

I want to stick with you, Claude. One prediction we’re hearing a lot about — even discussed at Davos — is data centres in space and AI.

Claude Rousseau (11:10)

In a way, compute in space has existed for years. The question is how to apply Earth-based data centre models to space. That will take time.

Initial use cases will likely focus on sovereignty, data storage and Earth observation. There’s also a push — from Elon and others — to leverage AI across infrastructure. Space data centres could provide more value both in-space and on the ground.

Antoine Grenier (12:40)

We surveyed investors last year, and many said they’d invest in orbital data centres if they were technically feasible. By autumn, Google, Starlink and Amazon were all talking about it openly.

There are real limitations, both on Earth and in space, but engineering progress can surprise us. Orbital data centres may be one of those ideas that arrives sooner — or later — than expected. Either way, it’s something we’ll be tracking closely.

Christopher Baugh (14:29)

Very high on the hype meter. Lluc, back to direct-to-device — why is 2026 the year of adoption?

Lluc Palerm (15:05)

For many years the industry was sceptical about D2D, but now it’s proven. Players like Starlink and Skylo are offering real D2D services to smartphones.

It’s early — mostly messaging — but our surveys show strong consumer interest. 76% of respondents express interest. These services improve retention and subscriber acquisition, which has real monetary value for MNOs.

We expect operators implementing D2D in 2026 to see around a 1% revenue uplift from basic services alone. When broadband D2D arrives, the opportunity becomes multi-billion-dollar.

Christopher Baugh (16:59)

Let’s finish with the traditional industry — operators, ground segment, infrastructure. Antoine?

Antoine Grenier (18:04)

Everyone is reassessing their position. Telcos are thinking deeply about integrating non-terrestrial networks beyond gimmicks. This is reshaping corporate structures, JVs and partnerships.

Satcom remains a small part of telecoms, but its importance is growing. The pivot toward defence and critical infrastructure is fundamental and impacts the entire ecosystem.

Christopher Baugh (20:10)

Lluc?

Lluc Palerm (20:23)

It’s a difficult market for traditional players. They need to adapt to new supply and pricing paradigms and take more risk in technology investment. Matching Starlink’s pace is hard, but participation in innovation cycles is essential.

Christopher Baugh (21:28)

Claude, final word?

Claude Rousseau (21:38)

Follow the money — and right now it’s government. New-space manufacturers are real players now. Partnerships, especially between manufacturers and launch providers, will be critical.

We also predict at least two European launchers reaching orbit this year, breaking the Ariane 6 monopoly. That’s good for the industry.

Christopher Baugh (22:55)

More launch capacity is always better. Thank you, Antoine, Lluc and Claude.

If you’d like to explore our 15 space predictions in more detail, visit our website. Engage with us — we’d love to continue the dialogue. Thank you for listening, and we’ll see you on future Analysys Mason space podcasts.

Note: This transcript was generated using AI and has been lightly edited. Minor errors may remain.