Emerging Markets
Emerging markets always have been a good fit for the satellite industry, and that trend remains strong. “Satellite technology can literally help a country transform itself,” Pelton says. “A robust telecommunication infrastructure will help a country achieve big gains in their GDP, which is the goal of a country’s leadership. You can cover an entire country with a single satellite and the cost per bit of satellite technology is coming down. Even well-developed countries, such as Australia, use satellite. These countries are great opportunities for the satellite industry.” Pelton notes the importance of converged networks in the future, stating: “In the future, there will be two-way interactive video mixed in with other traffic. New networks must be architected to support this type of traffic. In the past you had siloed networks, such as telecommunication, cable television and data storage. Now with multipurpose network platforms, everything is IP traffic. The initial challenge will be to bring satellite into converged networks.”
While traditional emerging markets, such as China, will continue to be business targets throughout the next decade, savvy business planners always are looking for new opportunities and a new list of smaller but profitable markets have been singled out for their potential. The group, collectively dubbed CIVETS, include: Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa. All six show significant potential for increasing their consumption of satellite products and services and also demonstrate the following desirable traits: resiliency in domestic demand, large populations, buoyant growth from a satellite perspective, telco deregulation, low teledensity, proliferation of DTH services and a growing GSM system. “You want to fish where the fish are,” says Belinsky. “It isn’t easy to guess right now which markets will be the hottest. Business plans have to use some assumptions right now, but these countries appear to hold much promise for the future,” he says.
Van Herck rates the potential for each of the CIVETS countries using market penetration of broadband and the number of people without broadband services. Of the group, he rates Egypt, Vietnam and Indonesia at the top, with potential subscribers ranging from 66 million to 210 unserved customers. Twenty six million consumers in Turkey, or 26 percent of the population have access to broadband, and yet there are still 50 million unserved. Columbia is last on the list for Van Herck because the penetration rate for broadband stands at 45 percent, with only 23 million people left unserved. Although South Africa has only a 9 percent market penetration, there are only 45 million left unserved. These penetration rates compare to 70 percent in France and 66 percent in Germany.
Zontag notes that Africa as a whole has been recognized for its potential, but the continent has lagged. “You must understand that Africa is a huge market. South Africa is moving forward and is helping pull the rest of the continent with it. We also see some movement in Asia, particularly Vietnam.” Zontag also sees a large increase in the demand for services in Turkey, pointing out that the Turkish transportation system is extremely well developed and is a prime candidate for mobility solutions.
Greg Berlocher has been active in the satellite industry for twenty five years and is the President of Transcendent Global Networks LLC.
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