[Satellite News 11-29-10] Analysts expect 2011 to be a period of modest recovery, with a focus on vertical markets, democratization of smartphones and development strategic partnerships with Internet players. Satellite executives are taking a simplistic approach, hoping build off of the sector’s success in 2010.
    Speaking at Informa Telecoms & Media’s Industry Outlook event in London, Chief Research Officer Mark Newman said that efforts from operators, handset vendors and infrastructure suppliers to bounce back from the economic downturn and produce solid financial results in 2010 would shape trends for 2011. The issues most likely to dominate the landscape in 2011 “include the emergence of new vertical enterprise sectors such as healthcare, utilities and transportation; the mobile Internet as a mass market; and the importance of strategic partnerships with Internet players,” said Newman.
     Projected trends affecting satellite include the acceleration of smartphone adoption in lower price tiers as mobile operators look to grow data revenues from a broader user base in 2011. “The drive by some vendors to reduce the cost of smartphones opens up a whole new opportunity to create devices for the mass market, a strategy that is welcomed by the mobile operators,” said Newman, who expects 342 million smartphones to be sold worldwide in 2011.
Many operators also are placing greater focus on vertical markets such as the healthcare sector, leveraging the potential of mobile enterprise exhibited in 2010. According to Newman, the difference in 2011 will be operators using machine-to-machine communications as a starting point rather than voice and SMS. “The focus of operators today is the healthcare sector, where they are still in the early stages of learning where the best opportunities lie. They will need to do the same for each and every vertical sector to decide where to position themselves to develop profitable businesses,” he said.
     Analysts also expect the battle for a majority share of the connected-home market will heat up dramatically in 2011, as traditional entertainment devices provide more uses and applications. Informa predicts that 2011 will see TVs overtake games consoles as the dominant in-home connected device, at least in terms of units sold. However, Newman believes this does not mean people will actually use the online services. “By the end of the year, we will be much closer to knowing whether Google TV, Apple TV, Canvas and HbbTV are game-changers or simply another case of the emperor’s new clothes.”
    Satellite broadcasters will continue to see growth in Western Europe, as cable TV services in the region are expected to decline in 2011. “Operators are not just struggling to cope with converting European cable homes from analog to digital, they are competing to upsell their subscribers to bundled packages, especially triple-play (TV, broadband and telephony) and even quad-play (triple-play plus mobile) service bundles. Our forecasts predict that the number of Western European TV homes taking cable will fall from 51 million in 2006 to 48 million in 2015 — or from 31 percent of households to 26 percent,” said Newman.
     The market dynamics of 2010 have served many satellite operators as a year of network rationalization. Informa expects 2011 to be no different. “As it becomes unsustainable for minor carriers to roll out networks, market consolidation will follow and so, too, will network rationalization. We expect to see similar instances of network sharing in Africa, especially as carriers come under increasing pressure to universalize their networks and reach the underserved.”
    Informa also addressed the hype over LTE’s potential breakthrough year in 2011. While many telecom leaders have expressed concern over LTE spectrum fragmentation and its ability to undermine global potential and inherent adaptability, the same feature also has helped LTE gain global acceptance. However, Newman said the market’s failure to “identify globally harmonized spectrum for next-generation 4G services means that, in order to meet the demands of a diverse range of frequency allocations, LTE is being required to provide operators with multiple options in terms of channel size and spectrum band, which could, in the end, impact its short-term potential.”