Goldman Sachs: Global Satellite — Space Data Center Opportunities and Telecom Risks
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Goldman Sachs hosted an expert webcast examining the future viability of space-based data centers and the ongoing impact of satellite connectivity on the telecommunications industry. Regarding orbital data centers, experts note that while the concept does not yet exist, it holds long-term appeal due to unlimited, low-cost solar power, passive radiative cooling, and the elimination of real estate expenses, which typically consume 5–15% of terrestrial data center capital expenditure. Feasibility hinges on reducing launch costs to roughly $200 per kilogram and engineering lightweight cooling solutions under 20 kilograms per megawatt.
On the satellite front, Goldman Sachs believes investor fears regarding the disruption of traditional telecom networks are overstated. Low Earth orbit capacity remains structurally constrained. For example, Starlink's Gen-3 satellites are estimated to cover only about 4% of the population in Germany. Given high maintenance costs and shorter satellite lifespans, direct-to-consumer satellite offerings are economically viable primarily in rural, high-GDP regions. Consequently, satellite technology is positioned to complement rather than replace terrestrial networks through strategic partnerships.
The firm notes that satellite routing for rural coverage poses a mild downside risk to the long-term growth trajectories of tower companies like Cellnex and INWIT. However, much of this risk is already priced into their equities, with no immediate re-rating catalysts anticipated. Goldman Sachs maintains a bullish outlook on European telecommunications, identifying BT, Nordics, Deutsche Telekom, and KPN as selective buy opportunities.