By Nick Mitsis
The theme of SATELLITE 2004 was "New Momentum. New Opportunities. New Profits." Industry leaders from all sectors of the satellite arena filled the new convention center in Washington, DC, to gain that momentum, share ideas about opportunities and learn where new profits can be found.
Total attendees and exhibitors at this year's show reached 6,853, a 14.2 percent increase over last year. Exhibits totaled 206, with 40 more companies present than 2003, and at our press time, more than 80 percent of the exhibit space for SATELLITE 2005 was already booked. With so much of the global satellite industry present, many business issues were examined, debated and analyzed. Here are a few highlights.
According to analysts and financiers, good news is on the horizon for satellite-enabled services growth. Analysts said the oversupply of satellite transponder space should decrease throughout the next eight years. Specifically, available 36 Mhz "transponder equivalents" will fall from a 2005 high of more than 8,000 units to roughly 7,000 units in 2012. Even better news, investors are once again willing to invest in the satellite industry.
Data compiled by some conference presenters indicated this financial uptake. In 2002, the total financing extended to the global satellite industry was $4.9 billion. One year later, this total more than doubled to $11.5 billion, with no signs of faltering in 2004.
Even with this financial uptake, industry leaders warned that unless satellite players make some fundamental changes, they might not be able to take advantage of the market shift. The message most notably stated was that satellite service providers must seek new opportunities now, such as High Definition Television (HDTV) to maintain this momentum. One of the reasons the financial community is renewing its interest in the satellite sector has to do with the healthy growth of the public Digital Audio Radio Satellite (DARS) and Direct Broadcast Satellite (DBS) sectors.
Operators And Manufacturers
Six of the major Fixed Satellite Service executives clashed on their outlooks for consolidation, broadband and HDTV services. Some said the key to the industry's future is tapping into new applications and not pursuing the consolidation between existing global operators, while others said the overcapacity issue could be addressed to some extent if certain companies combined and reconfigured their in-orbit assets.
The CEOs stated that instead of further consolidation within their sector, finding new opportunities and pursuing them wisely would be the current business approach. Broadband initiatives, ethnic programming and HDTV advancements topped their lists.
On the manufacturing side, business continues and is projected to remain flat and like the operators, executives of the major manufacturing houses rebuffed talks of consolidation. Some even went so far as to say that consolidation would not magically solve the sector's problems but that cutting capacity might. As for the rumored merger among the Europeans? Both Alcatel and Astrium said there is no negotiation taking place for such a merger.
Military And Broadband
The good news is that government use of commercial space services saved the industry. The bad news, according to some executives, is that government involvement has impeded the industry's desire to "right size" itself. Even though continued use of commercial satellite systems by the military will help expand the demand for satellite services, as this customer continues to grow, demand for commercial services will begin to level off as the Pentagon elects to upgrade its own dedicated systems.
On the broadband side, many found it difficult to connect on common ground regarding the source of revenue such applications will bring. Some suggested the consumer marketplace will drive Ka-band projects rather than the enterprise sector, while others said the business-to-business market will lead satellite broadband communications. All eyes are now monitoring 2004 satellite developments to see where the growth will ultimately come from.
Nick Mitsis is editor of Via Satellite magazine. He also sits on the board of SSPI's Mid-Atlantic chapter.