Although worries persist about a potential market downturn in the satellite industry, a panel of executives at SATELLITE 2009 see a handful of opportunities — digital media and IPTV, mobility, emergency preparedness, and developing economies — as sure bets, even in a tenuous financial climate.
These four hot markets share a common bond — demonstrating continued significant growth in broadband services, and in reality, broadband should be considered as the fifth hot market segment, the executives say. Mike Cook, senior vice president, Hughes Network Systems, notes that the growth curve for satellite broadband services continues to increase, and satellite broadband services have been recognized in the $7.2 billion stimulus plan. Edward Berger, vice president, business development at Intelsat, says other areas, such as the maritime market and military applications, continue to show large gains in demand for broadband services. Giuseppe Aridon, vice president business development, Telespazio, points toward the popularity of IP and its worldwide adoption as a leading factor in the demand for broadband satellite services, and Serge Van Herck, CEO of Newtec cites a study by Cisco which found that traffic on the Internet is doubling every two years. That type of demand would in turn drive the appetite for broadband services, he says.
Driving Forces
"2009 is a tough year," says Glenn Katz, president and COO of Spacenet. "Advertising is one of the first things that companies cut back on. Many digital media networks are advertising driven. Things are tough right now but they are going to make a comeback. When you consider that there are 300,000 business roof tops across the United States equipped with satellite antennas, digital media is a natural overlay. We see it as a greenfield opportunity."
The high speeds that fixed satellite services (FSS) operators can deliver will lead to tremendous growth in government sales, says Berger. As evidence of market size he points to a study which estimates that unmanned aerial vehicles (UAV) will consume $62 billion of bandwidth and services throughout a 10-year period.
Cook notes that various government departments have been using increasing amounts of satellite capacity to move surveillance video from point to point. He could not provide any specifics of these programs, but says: "Satellite technology allows you to bring back video signals from anywhere. We see continued growth in this market." Katz and Aridon agree that mobility, while a niche market, is an important one that covers areas such as maritime, aeronautical and broadband-on-the-move services for the military.
"The window for satellite is constantly moving with peaks and valleys, much like a landscape," says Andrea Maléter, technical director at Futron Corp. "As markets open and take off, there are expectations that terrestrial competitors will eventually move in. If there is enough demand, terrestrial carriers — including new wireless systems — will put in the infrastructure needed to compete, thus the market for satellite services waxes and wanes in different places at different times. But clearly there are pockets of continuing opportunity, in areas where it will never be realistic to deploy terrestrial infrastructure.... In the current United States discussion over stimulus funding for broadband access, people tend to forget that broadband is available to everyone right now via satellite. Systems such as WildBlue and Spaceway are in orbit now and the challenge is just to get user terminals activated. These are beyond "shovel-ready" projects; they are plug and play projects."
The maritime market should be a strong market in the coming years. "The biggest growth in the mobility market is in the maritime industry," says Maléter. "Shipping companies are looking for options beyond L-band. There is large amount of growth in Ku-band maritime systems going on right now.... Cruise ships served as the leading edge of the maritime market. Now shipping companies are using broadband connectivity to extend business applications to vessels. They are also using Internet connectivity to help retain crews. Crew members on the high seas can use the Internet to stay in contact with friends and family through e-mail. This is similar to the way in which the [U.S. Department of Defense] has long been using Internet connectivity for the welfare and morale of troops. Satellite service providers have done a good job capturing a large number of blue water vessels. A new generation of smaller, less expensive stabilized VSAT terminals will allow green water and brown water vessels to install mobility solutions."
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