In commercial satellite industry only the strong will survive
In commercial satellite industry only the strong will survive
Keywords: Space technology, Defence sector
The market for commercial communications satellites is expected to be worth$26.6 billion over the next 10 years, according to Forecast International's recently completed analysis, “Commercial Communications Satellites: 2004-2013”, with some 270 satcoms earmarked for production.
A modest rebound in the commercial communications market is also expected in the next few years. Helping to fuel this rebound will not only be the growing market for the application of key technologies and services to the commercial consumer but also the requirements dictated by government reliance on commercial capacity.
“The U.S. Defense Department is the single largest consumer of commercial satellite services in the world. Its demand for satellite services is so great that more than 80 per cent of the military's satellite communications coming out of the Persian Gulf during Operation Iraqi Freedom were going over commercial birds”, said John Edwards, Space Systems Analyst at Forecast International. Edwards added, “Although not everyone agrees on how much the military will continue to use commercial capacity, the recent cuts to transformational satellite programs in the U.S. Defense Budget were extensive and this suggests that a continued reliance on commercial systems, to some degree, is assured”.
While providing capacity to governments has served to buoy the bottom line of both satellite operators and manufacturers, these industries are also developing innovative products and services in an effort to attract new customers. To boost sales of commercial satellites, manufacturers have been applying new technologies to their platforms to increase their performance. This has served them well, but emerging technologies in the satellite industry seem to be both a blessing and a curse. While they have increased both power and service life of satellite platforms, they have ironically tempered production of new spacecraft. Data compression technology is also advancing at a rate that is slowly reducing the capacity required for applications like HDTV. Satellite manufacturers that have been banking on a spike in production to accommodate HDTV demand may find that the picture is not so rosy.
Competition for satellite services has also led to overcapacity and downward pressure on pricing. To further complicate matters, satellite operators are not only competing with each other but also against terrestrial cable television providers and fiber networks that are leaps and bounds ahead of satellites in terms of attracting new customers. This competition is forcing some of the weaker players to either leave the game completely or be acquired by some of the stronger companies in the industry. However, if there is a light at the end of the tunnel, it is that this consolidation of satellite services and manufacturing is serving to fortify the industry. According to Edwards, “Those companies that emerge from consolidation will be stronger and better adapted to serve the new satellite market reality”.
Details available from: Forecast International Inc. Tel: +1 203 426 0800;Fax: +1 203 426 6869.
