[Satellite TODAY 02-07-12] The commercial satellite markets are set for a 10-year period of modest growth, according to a Euroconsult report issued Feb. 6, but the analysis firm’s predictions for the government markets include a stagnating growth period for government spending that is expected at least through the middle of the decade.

   The report, “Satellite Communications & Broadcasting Markets Survey,” highlights the traditional FSS satellite bandwidth services market as the industry’s core strength. Euroconcult CEO Pacôme Revillon believes the sector will be worth almost $15 billion in 2020.

   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,” Revillon said in the report. “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.”

   In the MSS market, however, Euroconsult predicts an average 13 percent growth per year from 2.4 million terminals in service in 2010 to 7.8 million by 2020. Euroconsult Senior Consultant Wei Li said that while the contribution of low data rate machine-to-machine (M2M) devices to service revenues would remain limited, the impact the devices will have on subscriber growth is significant.

   “[The growth] is due to increased demand for broadband and other MSS services in a number of vertical markets and emerging regions,” Li said in the report. “Nevertheless, competition from terrestrial and VSAT networks will remain a major limitation for MSS growth in L-band.”

   Euroconsult also estimates that 1,145 satellites will be built for launch from 2011 to 2020, which is a 51 percent increase from the previous decade. Revenues from the manufacture and launch of these 1,145 satellites will be worth $196 billion worldwide, of which 70 percent can be attributed to government demand, according to the report. The firm forecasts 203 commercial communications satellites will be launched into GEO orbits during the next 10 years, with a total of 165 satellites to be built and launched into medium and low Earth orbits (MEO and LEO).

   The government satellite sector, however, is likely to enter a stagnation phase following several years of continuous expansion during the last decade, according to Euroconsult President of North America Steve Bochinger.

   “Government investments in satellite systems are cyclical, driven by the procurement of operational systems in large space countries,” said Bochinger. “Following stimulus funding allocated to space projects to support national economies and innovation, most governments have returned to more stringent budget spending. This has already resulted in cutting non-priority budget items including space programs.”

   Government space funding levels were $71.5 billion in 2010. Bochinger predicts government space budgets to begin a gradual decline of at least 1 percent per year on average by 2015. “In the most optimistic scenario, this would result in a stabilization of approximately $70 billion for the next five years,” said Bochinger.