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[Satellite TODAY 01-28-13] The need for enhanced communication capabilities and Intelligence, Surveillance and Reconnaissance (ISR) requirements for international armed forces is expected to drive demand for military satellites during the next decade. The trend is especially prevalent in North America, Europe and the Asia Pacific region, according to online market research firm ReportsnReports.
In a new study titled, “The Global Military Satellite Market 2012-2022,” ReportsnReports said the current situation of defense budget cuts across most countries, however, is expected to persist during the next decade.
“In this scenario, the defense departments around the world are exploring and inviting new alternatives for reducing their costs,” the firm wrote. “Apart from pushing back their project timelines, utilization of COTS equipment is a potential choice for the government. Thus, the military satellite industry is gradually undergoing a transition towards selecting commercial providers against defense suppliers for its programs.”
North American and European regions account for an estimated 80 percent of global defense spending. ReportsnReports, however, added that these regions were also among the hardest hit by the global financial crisis.
“This has led to austerity measures being introduced by national governments, which in turn have resulted in reduced defense budgets and the cancellation and indefinite delay of various military satellite programs,” the ReportsnReports study said. “The countries such as the United States, France, Germany among others, which contribute significantly to the global military satellites market, are experiencing substantial defense budget cuts. This is forcing the defense departments of these countries to realign their spending strategies on satellites.”
The report includes an analysis of the global military satellite market over the next ten years identified potential market opportunities to enter the industry using market size forecasts. The firm also benchmarked the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.
“With the increasing usage of Commercial-Off-The-Shelf (COTS) equipment in the military sector lately, the bandwidths of military satellites are being increased through hosted payloads from commercial satellite providers,” ReportsnReports analysts wrote in the study. “Hosted payloads are components attached to commercial satellites, which are designed to function independently of the host satellites, while at the same time sharing its resources. These enhancements can be used for numerous applications of satellites mainly including military communication and ISR.”
The also studied current industry size and growth expectations through 2022, including highlights of key growth stimulators, providing expectations of growth rates and projected total expenditure from companies like Boeing, Northrop Grumman, Israel Aerospace Industries, Telespazio, QinetiQ, Thales, Raytheon, Astrium, Mitsubishi Electric Corporation, ISS-Reshetnev, Lockheed Martin, Intelsat General, ITT Exelis and Harris Corp.
Recently, the government side of the military satellite world has made an effort to rapidly adopt new strategies such as Public-Private Partnerships (PPPs) and Private Finance Initiatives (PFIs). Governments are also increasingly adopting the capacity leasing approach on privately owned satellites, rather than deploying own systems. These strategies, said ReportsnReports, have become critical to account for the huge capital requirements and post deployment assistance required for these projects.
“In the current scenario of defense budget cuts in many countries around the world, Private Financing Initiative (PFI) is gaining significant importance, through which the satellite project will be built and owned by a private company. In return, the governments agree on guaranteed contracts for the satellite services throughout the satellites’ lifetime.”
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