Satellite Sector is Growing

Euroconsult recently announced that growth in the fixed satellite market has remained strong despite the adverse economic environment. According to Euroconsult’s soon-to-be-released report, the fixed satellite sector grew in terms of both transponder demand (+9%) and overall revenues (+10.7%) representing a peak in the current decade. Digital entertainment and emerging digital markets remain the primary growth drivers, with corporate networks, military communications and broadband access uptake also contributing to growth.

According to the report growth in transponder demand remained particularly strong in emerging satellite markets, which include Latin America, Africa, Central Europe and large parts of Asia. These regional markets represented 53% of capacity usage worldwide in 2008, and 71% of the net increase in capacity leased last year. Most of these are young, fast-growing digital television markets and still have heavy needs for telecom traffic carriage using satellites as a backbone for fixed and mobile traffic in areas not covered by terrestrial networks.

The consumer broadband-access-by-satellite market reached over 1.2 million subscribers (+30%) last year. Growth was primarily in the US, followed by Asia and was due to the availability of dedicated broadband service (“BBS”) satellites. In the US, two market players, WildBlue and Hughes, are locked in intense competition and driving market growth. In Asia, IPSTAR, traditionally based in Australia and Thailand, is pushing hard to penetrate new Asian countries.

The shape of the broadband satellite market is expected to change significantly in the next three years. New BBS payload projects in Ka-band have begun to flourish, and new systems with much larger capacity are expected to be operational in North America, Europe, the Middle East and North Africa by 2011. Beyond consumer access, those systems are expected to be increasingly used to serve the enterprise as well as potentially other market segments.

Prospects are strong for the broadband satellite market with up to 10.5 million subscribers worldwide by 2018. However, a number of challenges will need to be addressed. Beyond technical aspects and regulation, the ability to build strong distribution networks in fragmented markets such as Europe will be a key to guaranteeing the success of satellite solutions.

Euroconsult expects the global market value of capacity used for the traditional FSS market to reach around $13.4 billion in 2018, or $16.8 billion including wholesale revenues from emerging BBS systems dedicated to satellite consumer broadband access. Industry consolidation, which will continue, will be offset by the emergence of new regional satellite systems backed by either private or public investors.

The Microwave Journal's cover story for the August issue featuring Satellite and mmWave editorial coverage will talk about the capacity crunch in the military SatCom market. It will examine the issues and trends in military SatCom including various programs the government is working on to address the problems with capacity.