The satellite business reported growth in 2009 throughout all four segments measured by the Satellite Industry Association, and while growth in services demonstrated how resilient the satellite business is during a recession, improvements in satellite manufacturing could portend an even stronger future.

Global satellite revenues were $160.9 billion in 2009, up from $144.4 billion in 2008, according to the “State of the Satellite Industry Report” prepared for the Satellite Industry Association (SIA) by Futron. The satellite business has posted an average annual growth rate of 11.7 percent since 2004, when revenues were $82.7 billion.

“This report reinforces the satellite industry’s resilience, despite the global economic downturn. Each of the four key satellite industry sectors posted strong growth in 2009,” Patricia Cooper, president of the SIA, says. “SIA is very encouraged by these results but will continue to monitor the long-term effect that changes in the global economic situation, trade barriers and government procurement may have on U.S. firms.”

Futron conducted the SIA’s 13th annual report, polling more than 70 satellite companies, including non-SIA members and non-members, to determine aggregate revenues in the satellite services, satellite manufacturing, launch industry and ground equipment sectors. In 2009, the satellite manufacturing and launch services sectors were the two fastest-growing segments around the globe, followed by the satellite services.

Satellite manufacturing revenues improved 29 percent, from $10.5 billion in 2008 to $13.5 billion in 2009, as larger and higher-value new spacecraft were launched. Launch sector revenues increased 18 percent, with U.S. launch revenues growing from $1.1 billion to $1.9 billion, according to the report.

Satellite services revenues grew 11 percent in 2009, down slightly from growth of 17 percent and 16 percent in 2007 and 2008, respectively. Total service revenues of $93 billion accounted for more than 50 percent of the total satellite revenues reported in 2009. Satellite TV revenues improved from $68.1 billion in 2008 to $71.8 percent in 2009, accounting for most of the growth in the services sector. Satellite radio revenues held steady at $2.5 billion, while mobile satellite services revenue also held ground at $2.2 billion. Satellite broadband revenues reached $1 billion, though the United States accounted for 70 percent of the total.

Ground equipment revenues grew 8 percent to $49.9 billion, led by consumer-oriented products such as satellite TV and broadband, mobile satellite and GPS devices.
 

In-orbit Activity

Global Operator Share of In-Orbit Satellites

Transponder agreement revenues for FSS providers were $11 billion in 2009, up from $10.2 billion in 2008 and continuing a steady climb from revenues of $7 million in 2004.

Intelsat and SES remain the largest operators, accounting for more than 34 percent of the on-orbit commercial FSS satellites, operating 50 and 44, respectively. Eutelsat is a distant third with 24 satellites, and Japan’s Sky Perfect JSAT, created from the merger of JSAT and Space Communications Corp., as well Sky Perfect DTH, operates 13 spacecraft. Other operators with double-digit, on-orbit assets include Telesat with 12, DirecTV with 12, EchoStar with 11 and Russia Satellite Communications Co. with 10.

With the growth among the larger operators, the share of on-orbit assets operated by regional and other operators accounts fro about 40 percent of the 270 commercial satellites operating in geosynchronous orbit.

2009 Cumulative 36-MHz Transponder Equivalents Launched by Application

2009 Cumulative 36-MHz Transponder Equivalents Launched by Frequency

Commercial Launch Activity

 Launch providers performed 18 missions in 2009 that placed commercial satellites into geostationary orbit, one more than in 2008. While the number of missions increased slightly, a greater variety of launch vehicles were used to conduct these launches.

International Launch Services performed seven commercial launches in 2009, the most of any of the providers, but the dual-payload capacity of the Ariane 5 allowed Arianespace to place nine payloads in orbit with its five missions in 2009. The solo payload delivered by Arianespace was the July 2009 launch of the TerreStar-1 satellite, the largest commercial satellite ever placed into orbit.

Sea Launch performed four missions in 2009, though the launch provider’s only mission with its sea-based Zenit-3SL took place in April 2009, two months before Sea Launch filed for bankruptcy protection. The companies other three missions were conducted by its Zenit 3-SLB Launch rocket, which is launched from Baikonur Space Center in Kazakhstan

United Launch Alliance, the Boeing-Lockheed Martin joint venture that operates the Delta 4 and Atlas 5 rockets primarily for U.S. government use, placed one commercial satellite in orbit in 2009.

China Great Wall placed Indonesia’s Palapa D satellite in orbit using a Long March 3B rocket. The satellite was left short of its intended orbit due to a failure of the rocket’s third stage.

GEO Launches in 2009		Payloads Placed in Orbit in 2009

Satellite Manufacturing

Satellite manufacturing revenues were $13.5 billion in 2009, the most since 2004 and up 29 percent from revenues of $10.5 billion in 2008, according to the “State of the Satellite Industry Report.” The growth followed a decline of nearly $1 billion in revenues from 2007 to 2008. The improvement was due to higher-value new spacecraft being completed and launched, the report said, and satellite manufacturing revenues accounted for 8 percent of total satellite sector revenues. The study measures satellite manufacturing revenues recorded in the year the satellite is launched or delivered.

The U.S. manufacturing industry reported revenues of $7.7 billion in 2009, also the highest number in the last six years and a sharp jump over 2008, when revenues of $3.1 billion were the lowest in the period from 2004-2009. The revenue share for non-U.S. manufacturers in 2009 was $5.8 billion, down from $7.4 billion in 2008.

According to the report, 41 commercial geosynchronous orbit satellites were ordered in 2009, nearly double the 21 orders placed in 2008. U.S. satellite manufacturers received 19, or 46 percent, of the orders, down slightly from their 52 percent share in 2008. European manufacturers received 12, or 29 percent of the orders, while the remaining 10 were split between Russian, Chinese, Canadian and Japanese manufacturers.

2009 Commercial GEO Satellite Orders

Satellite Broadband Subscribers

The satellite broadband market enjoyed a strong 2009, with steady subscriber growth from operators that took a leap of faith to offer services to consumers unable to access terrestrial broadband services.

Hughes and WildBlue made steady progress, with Hughes adding 71,000 subscribers, while WildBlue added 51,000 in 2009. The two companies have 927,000 combined subscribers and are poised to surpass 1 million in 2010.

Outside of the United States, there are still few examples of satellite operators really targeting this market. In Europe, SES Astra and Eutelsat are making an impact, with SES Astra adding 32,000 subscribers for its Astra2Connect service which is available in many major markets across Europe. Eutelsat could become more of a factor in the market in the future, says Michel de Rosen, Eutelsat’s CEO. “We are in phase 1 of consumer broadband deployment, using HotBird 6 and Eurobird 3 to start to build the market, develop distribution networks, raise awareness and convince governments of the need to integrate satellite in national broadband schemes and economic stimulus measures. We will move into phase two later this year with the launch of Ka-Sat that will go into commercial service in the first part of 2011. We are on target with our Tooway roadmap. The service has made significant progress in 2009. The distribution network has been further built up, and we are actively working with partners to insert satellite into national broadband schemes.”

Thaicom’s IPStar service has been the satellite broadband pioneer in Asia, however, it remains a tough sell. Thaicom ended 2009 with 189,555 subscribers, adding less than 35,000.
 

The future of the market will be shaped by more powerful satellites such as Eutelsat’s Ka-Sat, ViaSat’s ViaSat-1 and Hughes’ Spaceway 3 that will to offer much improved performance to users and compete more effectively against terrestrial options. ViaSat acquired WildBlue in 2009 and is looking to combine WildBlue’s operations with the ViaSat-1 satellite to spur further market growth. “WildBlue has been adding in the range of 15,000 gross additions per month. If we add in the range of 30,000 subscribers a month, which was about where we were when the WildBlue-1 satellite launched in 2007, we would sell out ViaSat-1 capacity, at least in some areas, in three to four years,” says Mark Dankberg, ViaSat’s CEO. “If we do in the range of 50,000 to 60,000 subscribers a month, which is possible given the greater distribution that we have now compared to 2007, we would sell out capacity in closer to two years. Given a lead time for a Ka-band satellite of about three years it is possible we could have an announcement for a ViaSat-2 satellite this year.”