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| photo credit: EADS-ASTRIUM |
| The Alphabus platform developed by EADS Astrium and Thales Alenia |
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The satellite industry maintained strong growth
in 2008 and has solid prospects for 2009 despite
the global economic downturn, according to
Euroconsult, international analysts specializing in satellite
communications.
The firm (based in Paris, France) says that satellite
operators continue to benefit from high demand for
digital broadcasting, as well as from the increasing
need for satellite imagery for security and environmental
purposes. In addition, new satellite projects
from emerging regional operators and innovative applications
are creating demand for spacecraft, with
25 commercial geostationary satellites ordered by
operators in 2008 and a similar number expected by
the end of 2009.
These trends were highlighted at Euroconsult’s
World Satellite Business Week, held in Paris, France,
on 7–10 September 2009. The event brought
together more than 500 chief executives and other
business leaders from the global and regional fixedsatellite
service (FSS) and mobile-satellite service
(MSS) sectors, as well as broadband and Earth observation
operators and service providers. Also attending
were satellite manufacturers, launch service
providers, and insurers and investors representing
investment banks and private equities. A key theme
of discussions was how to maintain growth in the
global economic downturn and beyond.
The fixed-satellite service stays strong
The FSS sector has been one of the most resilient
in the downturn, with total revenue growth
of 10.7 per cent in 2008 (leading to around USD
9.8 billion), mainly as a result of big rises in demand
for capacity, combined with high fill rates.
According to Euroconsult’s Chief Executive Officer
Pacôme Revillon: “Digital television broadcasting remains
the primary growth engine for the FFS market.
In 2008, 18 new satellite pay-TV platforms were
launched, bringing the total to 109 platforms now
in service. Over 24 000 television channels are now
broadcast via satellite, with more than 2900 channels
added in 2008.” Subscribers to pay-television
were estimated at 112 million in that year.
The introduction of high-definition television is
also supporting the sector, as well as ongoing demand
for corporate networks and the introduction of broadband satellite payloads and new technologies
with improved compression techniques.
Emerging markets drive growth
Growth in demand for transponders has remained
strong, particularly in emerging satellite markets,
which include Latin America, Africa, Central Europe
and large parts of Asia. These represented 53 per cent
of capacity usage worldwide and 71 per cent of the
net increase in capacity leased in 2008, according to
Euroconsult’s report Satellite Communications and
Broadcasting Markets Survey: Forecasts to 2018.
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Figure 1 — Top 25 orbital positions for television broadcasting for FSS operators and proprietary systems
(worldwide, January 2009)
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| Source: 16th Satellite Communications and Broadcasting Markets Survey — Forecasts to 2018. © 2009 Euroconsult |
It says that these regions’ share of total demand
for capacity is expected to reach about 58 per cent
in 2013. Most are young, fast-growing markets for
digital television. They also need to carry fixed and
mobile telecommunication traffic using satellites as
a backbone in areas not covered by terrestrial networks.
While the economic downturn could affect
the development of satellite services in emerging
markets, growth is expected to remain stronger than
in the established markets of North-East Asia, North
America and Western Europe.
Broadband satellite services on the rise
The number of subscribers to broadband access
by satellite exceeded 1.2 million in 2008. Growth was
primarily in the United States, followed by Asia, and
was due to the availability of dedicated broadband
service satellites. In the United States, WildBlue and
Hughes are driving market growth. In the Asia-Pacific
region, coverage for many countries is provided by
the IPSTAR broadband satellite that is designed for
two-way high-speed communications over Internet
protocol platforms.
The broadband satellite market is expected to
change significantly in the next three years. New
broadband satellite projects in the Ka-band have begun
to flourish, and by 2011 new systems with much
larger capacity are expected to be operational in
North America, Europe, the Middle East, and North
Africa. The market is expected to reach 10.5 million
subscribers worldwide by 2018. But to ensure success,
key challenges must be addressed, such as technical
aspects and regulation, and the ability to build
strong distribution networks in fragmented markets.
Prospects
Euroconsult predicts that although prospects
remain solid for 2009, the FSS sector might
have reached a peak in its growth cycle in 2008.
Nevertheless, growth should remain significant. The
global market value of capacity used for the traditional
FSS market is predicted to reach some USD
13.4 billion in 2018 (or USD 16.8 billion, including
wholesale revenues from BBS systems dedicated to
providing broadband access). The analysts foresee continuing consolidation in the sector, offset by the
emergence of new regional satellite systems.
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| photo credit: © Jeff Greenberg/Alamy |
| The switch to digital television broadcasting is the main growth engine for the FSS sector |
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MSS: more revenue growth, but finance might be tight
In the mobile-satellite service (MSS) sector, operators’
revenues grew to over USD 1.2 billion in 2008,
according to Euroconsult’s report Mobile Satellite
Communications Markets Survey: Prospects to 2018,
released on 7 October 2009. It says that the MSS industry
is at a crucial point; growth opportunities lie
ahead, but several operators have high capital requirements
in a difficult financing situation. “Despite
the adverse economic environment, MSS operators’
core market — critical mobile communications where
terrestrial networks are not available — has been robust,”
Mr Revillon commented. The demand for better
broadband communications and remote control
of assets is seen as a key growth driver for the sector.
Several operators are on the verge of replacing
their aging satellite fleets, while others are seeking
funds for future systems. After Globalstar’s success
in achieving funding in 2009 with support from the
French export credit agency Coface, Iridium is looking
to raise an estimated USD 2.7 billion for its constellation
known as NEXT. Meanwhile, consolidation
is a growing trend. Inmarsat recently acquired
Stratos Global, and Apax Partners merged two
large MSS providers to form Vizada. Renegotiation
of the Commercial Framework Agreement in 2009,
which defines the commercial relationships between
Inmarsat and its service providers, is expected to further
reshape the market.
Growth driven by aeronautical and maritime markets
The aeronautical segment is seen as the main
growth driver for MSS communications in the coming
decade. It is still at an early stage of development,
accounting for 7 per cent of MSS wholesale
revenues in 2008, but Euroconsult expects the market
segment to significantly grow reaching wholesale
revenues of more than USD 270 million in 2018.
This positive outlook is due to the emergence of several
specialized service providers, such as OnAir and
AeroMobile, and the launch of new MSS products for
the aeronautical segment. A particularly importantdriver of demand will be the adoption of communication
services for passengers during flights. But in
the short term growth could decline, since the economic
crisis has had a major impact on two key markets:
business aviation and commercial airlines.
The maritime sector is still a major market for
MSS, with some USD 400 million in wholesale revenues
in 2008. While data applications will provide the engine for growth — particularly higher datarate
MSS broadband systems — voice will remain an
important application for crew welfare and safety
communications. The Asia-Pacific region will be especially
important for MSS growth in maritime markets
as competition among operators and service providers
becomes more intense.
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