[Satellite News 07-27-10] Despite a limited market slowdown, the fixed satellite market reached a new high in revenues last year, according to an upcoming Euroconsult report, announced July 27.
    The report, “Satellite Communications & Broadcasting Markets Survey, Forecasts to 2019,” showed the fixed satellite sector grew 5.3 percent in transponder demand, resulting in market revenues reaching $10.3 billion in 2009. Euroconsult CEO Pacome Revillon said that while constrained growth was caused by modest capacity additions, high fill rates and the impact of the economic crisis, “television broadcasting and emerging markets continue to play a role as the sector’s primary growth drivers, with satellite broadband service systems also contributing to the firm’s positive outlook for the future of the industry.”
    The broadcast of TV channels continued to drive growth for satellite operators last year, representing roughly 42 percent of net additions in capacity usage and contributing to an estimated 50 percent or more of revenue increases. The number of high-definition TV channels also increased dramatically in 2009 to 1,913 HD channels, more than doubling figures from 2008.
     Revillon said the firm is much more cautious over 3-D, projecting growth in the long-term over immediate success. “The nascent market for 3-D broadcasting could see up to 50 channels introduced in 2010 worldwide, both for trials and commercial operations. 3D is however not expected to have a major impact on FSS operators before 2014 and 2015, when the equipment and content should be sufficiently developed to allow for large commercial initiatives.”
    The report also shows a dynamic shift generating for both FSS global and regional operators. Last year, FSS operators procured over 30 new satellite orders with more than 30 operators having at least one satellite under procurement for either replacement or expansion. Euroconsult noted that the largest procurement campaigns are currently coming from Intelsat, SES and Eutelsat, with a total of 22 satellites ordered. However, regional operators such as Arabsat, Spacecom, RSCC, Star One and Singtel Optus are starting to catch up to the leaders. Euroconsult said regional operators added approximately 300 transponders in 2009 for a total of over 2,000 transponders leased, increasing their market share from 33 to 35 percent in two years. The four leading operators totaled 3,725 transponders, for a market share of 65 percent and a net increase of 150 transponders.
    “Operators’ revenue grew in 2009 – albeit at a slower pace than the previous year, – due to sustained capacity demand in emerging markets. This, combined with an average operating margin for the industry that increased to 35 percent last year and a global fill rate of 77 percent, underscores the good health of the satellite sector, and we forecast 6 percent revenue growth in 2010,” said Revillon.
     Operators have long been undertaking the difficult task of seeking financing for new satellite projects to leverage the benefits of new satellite designs or to focus on certain vertical markets. “With financing remains a challenge for many but the most established operators, satellite companies will likely continue to rely on export credit agencies such as Coface in France and the Export-Import Bank in the United States, as they have done heavily over the last two years,” said Revillon.
    The move towards broadband communications is also causing satellite growth, with usage from the transmission of data by unmanned aerial vehicles (UAVs) for military users to the need to carry data transmissions for both GSM and new 3G networks in emerging countries driving opportunities. Revillon said these broadband trends have three consequences for the satellite sector. “First, it supports overall growth in capacity usage for telecom applications, with a 6 percent compound annual growth rate between 2005 and 2009 compared to market stagnation in the early 2000s. Second, it encourages the optimization of transmission techniques through current satellites, resulting in the growing attractiveness of satellite solutions. Finally, it creates a positive environment for investments in new generation broadband service satellites operating in Ka-band. While the bulk of investments are focused on geostationary satellites offering broadband communications in a given regional market, at least one system backed by the company O3b aims to provide capacity for traffic carriage through a dedicated constellation.” 
    Euroconsult expects the global market value of capacity used for the traditional FSS market to reach around $14.8 billion in 2019, or $18.8 billion when including the wholesale market value of capacity used through emerging broadband systems dedicated to broadband traffic.  Capacity usage on traditional satellites is expected to grow by at least 4 percent per year over the next 10 years, with much faster growth expected in emerging markets compared to that of more mature markets. “[Broadband] systems should represent a growth driver for the sector, with close to twelve million individual broadband access customers and over three million corporate sites expected to use those systems by 2019,” said Revillon.