Commercial operators will see an estimated $106.2 million in hosted payload equipment revenues in 2012, including engineering services and commercial satellite operator hosting services, according to a recent research report by Northern Sky Research, which predicted that those same revenues are expected to range from $330.8 million to $554 million by 2022.
   The NSR market survey and forecast report, titled “Hosted Payloads on Commercial Satellites, 2nd Edition,” included an in-depth overview of demand trends for military and civil government requirements for solutions that address communications and Earth observation and science missions, as well as the emergence of private enterprise risk-taking.
   NSR said the hosted payload spending could yield cumulative revenues of $1.8 billion to $2.9 billion over an 11-year period. “The range of revenue streams depends largely on the types and varying costs of hosted payload equipment, and here, we conducted a scenario-based approach in its forecast methodology to reflect various payload complexities,” the research firm said in the report.
   NSR Senior Analyst and author of the report Jose Del Rosario said that the hosted payload proposition remains viable over the long term, despite delays in implementation, and that one of the key developments that should usher in robust growth is the emergence of greater private sector involvement. 
   “There is at least a 10-year window of opportunity that exists brought about by the state of government budgets, the changing political landscape and procurement processes that, among other things, have hampered the signing of hosted payload contracts,” Del Rosario wrote in the report. “There is clearly pent-up demand, and the right amount of risk-taking by the private sector via partnerships with technology companies, satellite operators, government clients and, to some extent, private equity can provide sustainable and even enormous revenue potential over the long term.”
   Del Rosario concluded that although hosted payloads have been delayed largely due to the global fiscal environment and governmental budgetary constraints, “an emerging business model is expected to materialize where private entities absorb the risks that military and civil government entities may not be willing to take,” he said.
   NSR released a similar report in December 2011, which predicted that the government and military satellite industry would need to provide higher-level solutions for less cost in order to capitalize on a market set to nearly double in the next decade. NSR projected government and military satellite communications revenues to grow from an estimated $4 billion in 2010 to $9.4 billion by 2020, producing total revenues of $71.9 billion during an 11-year period.