Satellite Industry Set For 10-Year Growth Spurt

"While we have seen slowing growth rates in leased capacity, FSS operators' revenue growth has continued to outperform the global economy, and operating margins remain high for most operators. In the near term, the difficult economic environment could weigh on the market," notes Pacôme Revillon, CEO at Euroconsult. "Still, connectivity needs and the growth of digital TV in emerging regions, combined with the launch of new-generation, high-throughput satellite systems should continue to drive growth. The value of satellite capacity leasing should consequently grow at 7 percent over the next 10 years."

Euroconsult forecasts that the mobile satellite service (MSS) market will grow at nearly 13 percent per year on average, from 2.4 million terminals in service in 2010 to 7.8 million by 2020. Low-data-rate machine-to-machine (M2M) devices will have a significant share in this subscriber growth, although their contribution to service revenues will remain limited.

"MSS wholesale revenue is expected to grow roughly 7 percent per year over the decade, due to increased demand for broadband and other MSS services in a number of vertical markets and emerging regions," adds Wei Li, senior consultant at the firm. "Nevertheless, competition from terrestrial and VSAT networks will remain a major limitation for MSS growth in the L-band."

Between 2011 and 2020, Euroconsult estimates some 1,145 satellites will be built for launch, up more than 50 percent from the first 10 years of the century. Revenues from the manufacture and launch of these orbiters could total $196 billion worldwide, of which 70 percent can be attributed to government demand.

Of that total number of satellites, more than 200 commercial communications satellites with a market value of $50 billion will be launched into the Geostationary Earth Orbit (GEO) arc during the next 10 years; some of these satellites were ordered during the flurry of activity during the past five years. Commercial satellite services outside the geostationary orbit will get a boost during that time period as well, with a total of 165 satellites to be built and launched into medium- and low-Earth orbits (MEO and LEO).