The World Teleport Association (WTA) has published its annual Inside the Top Operators research report. The eagerly awaited report draws from data submitted to WTA by teleport operating companies around the world for the association’s 2008 Top Operator rankings.
The 2008 Top Operators, told a story of strong growth and diversification. While membership in the Top Operators changes from year to year, over 20 companies have submitted data consistently for the past three years, providing a clear "snapshot" of the teleport sector as represented by the Top Operators. With $8.5 billion in revenue, these companies racked up combined revenue growth of 42% from 2006 to 2008.
A Changing Revenue Mix
From 2005 to 2008, many leading teleport operators spoke about diversifying their businesses out of satellite to fiber transmission. More than one large operator stopped using the word "teleport" in marketing materials in favor of "access points" or "nodes" – the language of fiber rather than satellite carriers. According to WTA, what was actually happening was a continued diversification out of being just a "pipe" for the transmission of video, data and voice into services that employ resources within the walls of the teleport to generate revenue. The Top Operators increased the average percentage of revenue coming from teleport and value-added services, and reduced the revenue earned from transmission. Fiber and microwave revenues fell much more sharply than did satellite.
According to the 2008 survey results, 33% of the Top Operators earn at least 50% of revenue from the broadcast, cable and DTH sector, but twice that number earn at least 25% from enterprise networking. Interestingly, mobile applications, excluding mobile backhaul, have risen from effectively zero a few years ago to be the dominant revenue source for 7% of the Top Operators.
During the last four years, teleport owners have been largely successful in gradually increasing the prices of the teleport and value-added services they offer. The tightening satellite capacity market, however, has resulted in sharply higher prices at the wholesale and resale levels over the same period.
What the Future Holds
In 2008, the average respondent expected the percent of business from teleport, value-added and other services would remain dominant at three-quarters of total revenue. But they forecast that satellite capacity sales would increase from 21% to 32% of the total, a 50% growth in their revenue mix, while fiber and microwave revenues would fall by a corresponding amount.
Diversity has been and will remain a key component of the industry’s success. Once providers of basic uplinking and downlinking services, teleports have evolved into providers of complex solutions ranging from TV program production and post-production to content hosting and distribution, systems integration to network management. Given the continued demand for complex communications solutions, teleport operators will continue to search for and expand niche markets.
Inside the Top Operators of 2008 is available free to WTA members from the World Teleport Association Web site at www.worldteleport.org.
