by Nick Mitsis

Even though increased business applications have emerged within key markets for executives in the global satellite communications industry, the operational side of the satellite arena is slated to remain the same for the near term. From satellite operators and spacecraft manufacturers to the launch service providers, the trends of 2004 will likely carry through the next few years, indicating little advancement of increased business activity in any of those sectors.

For satellite operators, both on the global and regional front, we do not see a significant spike in either new spacecraft orders for the majors or a robust replenishment market for the regionals. Now that private equity firms control the majority of the global operators, getting more business out of what is currently in orbit will most likely be the name of the game instead of adding new spacecraft to existing constellations. Likewise, industry executives will continue waiting for the replenishment market, once promised to be led by the regional satellite operators, to fully materialize. In addition, attention is falling on some of the larger regional operators, primarily in Asia and in the Middle East, as prime targets for acquisitions which would further change this sector facade.

For the global commercial satellite manufacturing market, we forecast between 12 and 20 orders worldwide to be expected to enter the manufacturing floor throughout the next three years. Also, future consolidation within this sector is not anticipated either with the main U.S. or European spacecraft builders. With Loral Space and Communications emerging from bankruptcy as the New Loral, its spacecraft division, Space Systems Loral (SS/L), is slated to surface debt free. At least in the near term, SS/L is unlikely to be divested for it will be one of two main business arms of the New Loral company.

Because of these developments within the operators and manufacturers, there is no significant spike forecasted on the commercial side for future launches, so civil and military spacecrafts will be significant sustainers for the global launch service providers throughout the next few years. Likewise, the new heavy-lift vehicles that entered the market last year saw little activity in 2004. Hopefully, the next three years will give a boost to their launch manifest, with the roughly dozen commercial launches forecasted for liftoff, in order to make them viable.

International Launch Services, having completed a year garnering the most commercial launches within the industry, primarily with its established Proton M/Breeze M and Atlas 2AS vehicles, is hoping that more launches will hit the books in the next few years for its Atlas 5 vehicle.

Likewise, Arianespace’s Ariane 5 Generic vehicle was the European launcher’s workhorse in 2004, and its Ariane 5 ECA will soon return to flight. At our press time, the launch date was not yet announced. Finally, Starsem’s Soyuz, which currently operates from the Baikonur Cosmodrome in Kazakhstan, is slated to start operations alongside the Ariane 5 at the Guiana Space Center in Kourou, French Guiana, in 2007 hopefully adding a more robust commercial schedule to its agenda and lastly no uptick in launches is forecasted for Arianespace’s alliance partner, Sea Launch’s Zenit vehicle.

Even though satellite operations may not be as robust as we would like, business advancements will continue and there is always something to be said for sustaining the business during challenging times.