Growth in the fixed satellite market has maintained its healthy pace, driven by digital entertainment and emerging digital markets. Accelerated deployments of corporate networks, considerable needs for military communications and broadband access uptake have also contributed to growth, according to Euroconsult’s recently-issued report “World Satellite Communications & Broadcasting Markets Survey, Market Forecasts to 2017.” The report said that the satellite fixed services market is well poised to face the current economic downturn.
The fixed satellite sector grew in terms of both transponder demand (+8%) and overall revenues (+9.5%) with emerging satellite markets continuing to play an important role in this development.
“Demand for satellite capacity for digital TV broadcasting accelerated further still last year, due to the addition of both standard and high definition channels,” said Pacôme Revillon, Managing Director at Euroconsult. “Capacity usage for TV services increased by 13%, with over 21,000 channels now broadcast by satellite,” he added. “Another important trend is new growth for telecom services, with sustained demand for corporate networks, government communications and cellular backhaul pushing the market.”
Increasing capacity requirements and several satellite launch failures in the last three years have led to capacity shortages in certain areas. In markets such as the Middle East and Africa, the lack of capacity has resulted in sharp price increases for satellite capacity. In most other regions an overall trend towards higher fill rates has supported an improvement in operators’ profit margins and at least a stabilization of capacity prices.
Regional Satellite Operators in Good Shape
According to the report, which breaks the world down into twelve regions, growth in transponder demand in nine of the twelve regions was more than 5% in 2007, with double digit growth rates in Russia & Central Asia (+20%), South Asia (+20%),Central Europe (+20%) and Sub Saharan Africa (+19%).
Regional operators (ie. operators excluding SES, Intelsat, Eutelsat and Telesat) -- with their strong market positions and customer relationships -- represent an increasing challenge for global operators. While regional operators represented 31% of total market revenues in 2007, they generated 37% of net revenue growth for the industry. In several regions operators have implemented ambitious procurement strategies in order to expand their satellite fleets and reach critical size.
Another consequence of growth in emerging markets is the appearance of new satellite systems jointly backed by public and private funds. Encouraged by the opportunities offered in these markets, new satellite operators have stepped into the market in the Middle East, Asia, Europe and Latin America. Their first satellites should be in orbit in the next three years.
Consumer Broadband Sector Growing
The consumer broadband access by satellite market reached nearly 1 million subscribers at the end of last year, thanks in part to the availability of dedicated multi-spotbeam capacity. While increasing competition in the US market is expected to support growth in the short term, the shape of the market is expected to greatly evolve within the next three years.
Projects of Ka-band satellite payloads flourished in 2007, and new systems are expected to become operational by 2011 in North America, Europe, the Middle East and North Africa at the very least. Despite challenges that satellite services will face, including the need to rollout efficient distribution networks, broadband access by satellite is seen as an attractive market, representing close to 9 million subscribers by 2017. Capacity requirements for those subscribers and for corporate networks which will be increasingly served by the same systems could require as many as fifteen satellites.
Prospects to 2017
Euroconsult expects the market value of capacity used for the traditional FSS market to reach almost $12 billion in 2017 with Europe remaining the largest market at $2.9 billion in annual revenues. The addition of wholesale revenues from emerging systems dedicated to satellite consumer broadband access would increase the global market value to $14.4 billion by 2017. Industry consolidation, which will continue, will be offset by the emergence of new regional satellite systems backed by either private or public investors.
According to Euroconsult, growth is expected in all world regions in the next ten years, except possibly in North East Asian due to lower demand for telecom services. Average growth of approximately 5% is expected In the next five years, after which a progressive slowdown may be observed in several regions due to the end of analog transmissions, increasing terrestrial competition and a potential new consolidation phase in the burgeoning digital TV market.
Report Profile
World Satellite Communications & Broadcasting Markets Survey, Ten Year Outlook, is now in its 15th edition. This report is a comprehensive work analyzing the current state and future prospects of the FSS industry, and serves as an essential business planning tool for industry actors. The report includes analysis of all fixed satellite communications applications, an in-depth strategic review of satellite operators’ business models and financial performance; and a 12-region breakdown of the world including transponder demand trends and ten year forecasts by application and by region. The report also looks at transponder pricing trends, supply and demand match by region and frequency band, and operators’ market share by region and by application. For more information visit www.euroconsult-ec.com
