Satellites are evolving from a niche solution into a core component of global communications infrastructure. Technological advances, falling launch costs, and new applications are driving the momentum of the so-called space economy. Alicia Daurignac, fund manager at La Financière de l’Échiquier (LFDE), explains the shift and highlights where investors may find opportunities.

Ms. Daurignac, you speak of a revolution in telecommunications and space. What exactly is changing?

As our need to stay connected anytime and anywhere continues to grow—particularly when traveling by train, plane, or ship—traditional terrestrial networks are increasingly reaching their limits. As a result, satellites are gaining importance.

Today, their use is still at an early stage and largely confined to hard-to-reach areas, remote infrastructure, or emergency situations. However, with ongoing technological progress and the emergence of 6G, satellites are becoming an integral part of network infrastructure rather than serving merely as a backup solution.
This shift will fundamentally reshape the entire satellite market value chain, from manufacturers to telecommunications providers.

Why is satellite communication currently so important for the space industry?

Satellite communication has become one of the strongest growth drivers within the space industry. The global market is estimated at more than $20 billion and is expected to grow at an average annual rate of around 20 percent through 2034. For investors, this opens up substantial opportunities, driven by two key developments.

«The sector’s momentum is primarily driven by significantly lower launch costs. Thanks to reusable rockets and more efficient launch systems, these costs have fallen dramatically over the past two decades.»

The first driver is the rapidly increasing demand for reliable, always-on connectivity. The widespread adoption of mobile devices is boosting the need for high-performance solutions, both for private and business use. Key applications include connectivity in aviation and maritime transport, coverage in remote regions, security-related communications, and use cases linked to the Internet of Things.

The second major trend is the growing focus of governments on resilience. Public authorities worldwide are investing heavily in the expansion and protection of non-terrestrial communication networks, further accelerating the development and deployment of satellite systems.

What role do satellites play in this development?

By receiving, amplifying, and transmitting signals from Earth, satellites perform a central function in global communications. Their key advantage lies in their independence from ground-based infrastructure, enabling reliable connectivity where traditional networks reach their limits—such as in remote regions or mobile environments like aviation and maritime transport.

What is driving the rapid growth of the satellite sector?

The sector’s expansion is primarily driven by sharply declining launch costs. Thanks to reusable rockets and more efficient launch systems, costs have fallen dramatically over the past two decades. This has significantly lowered barriers to entry and made large satellite constellations economically viable.

At the same time, technology has advanced rapidly: satellites are becoming smaller, cheaper, and more powerful. This allows for faster production cycles and the rapid deployment of entire networks.

«In 2025, SpaceX carried out more launches than the rest of the global space industry combined—a clear competitive advantage.»

In addition, demand for reliable, always-on connectivity continues to rise—whether in aircraft, on ships, in remote areas, or in IoT environments. Traditional networks alone can no longer meet this demand. Governments are also investing more heavily in space-based communication solutions to strengthen resilience and security. As a result, satellites are evolving from a niche solution into a strategic key technology.

Which company is currently leading the market?

SpaceX is widely regarded as the clear industry leader, largely due to its high level of vertical integration. Through key innovations in its Falcon 9 launch vehicle—particularly the reuse of the first stage—the company has significantly increased launch frequency while sharply reducing costs. In 2025, SpaceX conducted more launches than the rest of the global space industry combined, giving it a clear competitive edge. This capability allows it to expand and continuously upgrade its Starlink constellation far more quickly and cost-efficiently than competitors.
As a result, SpaceX has established a significant lead in both deployment speed and operational scaling.

Has the sector reached a peak, or is further acceleration likely?

The pace is likely to continue accelerating. In early January 2026, Starlink received approval for an additional 7,000 satellite launches, on top of its existing constellation of more than 9,000 active satellites.

How is global competition evolving?

The race is in full swing. China is attempting to catch up with the United States and is planning a constellation of more than 200,000 satellites. Europe is significantly behind and is relying on its «Iris²» constellation, which is expected to be operational by 2030.

What does this acceleration mean for the industry overall?

This development will reshape the entire satellite value chain—from manufacturers and operators to distributors and service providers—while creating additional growth momentum.

Regulation is becoming increasingly important. Why is it so critical in this sector?

Regulation is now a central issue for the satellite industry. To transmit data from space to Earth, operators require frequency licenses, which define which spectrum bands can be used. These licenses are essential to prevent interference and ensure that multiple satellite constellations can operate safely and efficiently in parallel. Frequencies are a scarce and strategically critical resource.

«With thousands of new satellites being launched, available ‘space’ in orbit—particularly in low Earth orbit—is becoming increasingly scarce.»

Frequency management takes place at two levels: internationally through the International Telecommunication Union (ITU), which coordinates global spectrum use and orbital positions, and nationally through regulators such as the U.S. Federal Communications Commission (FCC), which allocates licenses and enforces local rules.

The key challenge lies in managing an increasingly crowded orbit. As the number of satellites rises sharply, so does the risk of interference. At the same time, regulators are under pressure as more players compete for limited spectrum. Frequencies are becoming a bottleneck—and one of the most valuable assets in the future of satellite services.

Why has this turned into a competitive race?

The satellite sector has become a race because companies are competing for two essential and limited resources: orbital positions and frequency licenses. Both are critical for operating large constellations—and both are finite. As thousands of new satellites are launched, available space in orbit, especially in low Earth orbit, is becoming increasingly scarce. Operators know that securing the best positions and frequencies provides a lasting competitive advantage. Once allocated, these rights are difficult to obtain again and act as an effective barrier to entry.

At the same time, spectrum is rapidly increasing in value and has become highly contested. Access to specific frequency bands determines how fast, reliable, and scalable a satellite network can be. In some cases—such as the reallocation of C-band spectrum for 5G—the market value of these rights has even exceeded the value of the satellites themselves, underscoring their strategic importance.

Are there additional trends that you find particularly relevant as an investor?

Yes. One particularly exciting trend is the emergence of direct-to-device (D2D) connectivity. This technology allows satellites to communicate directly with a standard smartphone—using terrestrial spectrum when no mobile tower is available. This represents a major step forward for the industry.

Until recently, direct communication between smartphones and satellites was hardly feasible: distances are vast, signals weak, and mobile device antennas are designed for nearby terrestrial networks. Advances in satellite payloads, signal processing, and phased-array antennas are now making such direct connections both technically and economically viable.

Why is this so significant?

This opens up an entirely new market. Basic communication services such as messaging, voice calls, and even broadband connectivity could soon be available globally—without requiring users to change their devices.

For investors, this creates an attractive intersection between telecom and space. Demand is strong both from network operators and end users, adding further growth potential to the theme.

Which companies are positioning themselves in this space?

U.S. companies such as SpaceX, Amazon, and AST SpaceMobile are already positioning themselves, having deployed satellites into low Earth orbit at altitudes between 500 and 1,200 kilometers. The relatively short distance to Earth results in stronger signals, making direct smartphone connectivity possible in the first place.

What does this development say about the future importance of the sector?

Given the steadily rising demand for reliable connectivity, the satellite sector is becoming a core pillar of the space industry.

«The Echiquier Space Fund is a thematic fund that invests in listed companies with exposure to the space sector.»

And what does this mean from an investor’s perspective?

This growth dynamic—combined with the disruption of established satellite operators within the existing ecosystem—creates attractive opportunities for investors.

LFDE has been investing in the space sector since 2021. How is this strategy structured? Is it solely based on the Echiquier Space Fund?

That’s correct. The Echiquier Space Fund is a thematic fund that invests in listed companies with exposure to the space sector. The goal is to identify, within a dedicated investment universe, those companies we believe are best positioned.

How large is the Echiquier Space Fund today, and how has it developed since launch?

The fund currently manages around €420 million (as of March 23, 2026) and has grown significantly since early 2024, when assets stood at around €50 million.

Is now still an attractive entry point, or are expectations already priced in?

Space remains a compelling long-term theme, as the industry is still in a phase of accelerated development. Many companies are only beginning to scale their technologies, expand production capacity, and establish new commercial applications. We see this as the early stage of a long-term growth trend.

Alicia Daurignac is a fund manager and analyst at La Financière de l’Échiquier (LFDE), where she is responsible for strategies focused on the space economy. Prior to joining LFDE, she worked as an equity research analyst covering the aerospace, defense, and aviation sectors at Exane. She previously held roles in credit research at Fidelity International, focusing on airlines, aircraft leasing, and European utilities, and began her career at J.P. Morgan in investment banking and asset management. Daurignac holds a degree from HEC Paris as well as a bachelor’s degree in mathematics and computer science from the University of Exeter.