Tactical Communication Market Research Report and Outlook by 2028

The Tactical Communication market is projected to expand significantly, increasing from US$ 18,122.45 million in 2022 to US$ 29,142.61 million by 2028. This growth represents a compound annual growth rate (CAGR) of 8.2% over the forecast period from 2022 to 2028.

A key factor driving the procurement of airborne communication systems is the enhanced reliability of these systems. Advanced hardware components play a vital role in the collection and dissemination of imagery across various defense platforms, including combat vehicles and command centers. Over time, airborne surveillance systems, both commercial and military, have undergone significant evolution and continue to advance. Furthermore, in environments where satellite communication is limited and the battlefield is contested, there is a growing reliance on secure, beyond-line-of-sight (BLoS) communication systems. Monitoring radars are strategically positioned to enhance detection capabilities. Modern airborne surveillance systems, characterized by low false alarm rates, are particularly beneficial for nations facing border disputes, security challenges, and safety concerns. This demand extends to military vehicles, emergency response units, command posts, and any scenario requiring high-quality intra-crew and inter-network audio communication, thereby fueling the growth of the tactical communication market.

In the military sector, rapid technological advancements are giving rise to disruptive innovations. For example, the US Army has awarded Full-Rate Production (FRP) contracts for the Manpack and Leader Radio tactical data radios. This decision follows two years of operational testing with the 82nd Airborne Division's 1st Brigade Combat Team, as reported by the Program Executive Office (PEO) C3T, which manages the procurement process. An initial operational test and evaluation (IOT&E) conducted at Fort Bragg in January 2021 confirmed the decision to proceed with the FRP.

Consequently, several prominent players in the tactical communication market, such as Leonardo S.p.A (Italy) and Lockheed Martin (USA), are focusing on the development and provision of tactical communication systems tailored for unmanned aerial vehicles (UAVs), which is further driving market growth.

Impact of the COVID-19 Pandemic on the Tactical Communication Market

The COVID-19 pandemic had a profound impact on the Asia Pacific (APAC) region, leading to significant declines in GDP, international trade, and overall economic activity. The military electronics sector in APAC faced disruptions during the first half of 2020, resulting in substantial revenue losses for key players in the tactical communication market. The pandemic led to a reduction in military operations and caused supply chain interruptions throughout the region. Many emerging economies were compelled to cut their defense budgets and redirect funds to address healthcare needs, which further diminished military spending.

Numerous countries in APAC experienced significant revenue losses among key tactical communication market players. For instance, the Indian defense sector reported a loss of approximately US$ 3 billion in revenue between March and May 2020. This downturn affected enterprises of all sizes within the Indian aerospace and defense industries. The lockdown measures hindered the import and export of essential raw materials required for the production of radios and other defense equipment, causing delays in various military and defense programs reliant on communication technologies. These factors collectively contributed to a slight decline in the growth of the tactical communication market in APAC.

The United States stands as the largest military spender globally, with a defense budget that significantly supports the acquisition of advanced technologies aimed at enhancing safety and security. According to the Stockholm International Peace Research Institute (SIPRI), US military spending decreased from 3.7% of GDP in 2020 to 3.5% in 2021. In 2021, military expenditure amounted to US$ 801 billion, reflecting a 1.4% decrease from the previous year. Between 2012 and 2021, funding for military research and development (R&D) rose by 24%, while arms procurement funding saw a 6.4% decline. In 2021, both categories experienced reductions, with R&D investment decreasing by 1.2% and arms procurement spending dropping by 5.4%.

In the coming years, the US anticipates increasing funding for communications, sensors, and electronics by approximately 20%. During the forecast period, there is expected to be high demand for leader and manpack radios, driven by the US Army's handheld, manpack, and small form-fit (HMS) program, which aims to procure a family of software-reprogrammable radios for tactical voice and data communications. The Army's acquisition goals include 100,000 leader radios, 65,622 manpack radios, 21,579 rifleman radios, and 104,496 single-channel data radios. For instance, Thales announced in January 2021 that the US Army had placed its third delivery order for the AN/PRC-148D Improved Multiband Inter/Intra Team Radio (IMBITR), bringing the total number of IMBITR radio orders to over 6,000. Additionally, in 2022, the US Army awarded two contracts to General Dynamics Missions Systems for Tactical Network-On-the-Move communication systems, totaling US$ 74.99 million for support services and US$ 20.34 million for engineering and technical support to integrate On-the-Move technologies. These developments are contributing to the growth of the tactical communication market in the US.

Key players in the tactical communication market include BAE Systems PLC, Raytheon Technologies Corporation, Thales Group, General Dynamics Corporation, and Elbit Systems Ltd.

The overall size of the tactical communication market has been determined through a combination of primary and secondary research. The research process began with extensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to the tactical communication market. This approach also aimed to provide an overview and forecast of the market size across all segments. Furthermore, multiple primary interviews were conducted with industry participants to validate the data and gain deeper analytical insights. Participants typically included VPs, business development managers, market intelligence managers, national sales managers, and external consultants such as valuation experts, research analysts, and key opinion leaders specializing in the tactical communication sector.