Commercial Manufacturing Activity
In 2005, Via Satellite counted 19 orders among the major spacecraft manufacturers and cited 46 under construction. These orders reflect publicly announced, non-LEO, commercial communications satellite awarded in 2005 to a specific manufacturer.
Alcatel Alenia Space, Lockheed Martin Commercial Space Systems, Space Systems Loral and Orbital Sciences Corp. garnered roughly equal shares of the market in 2005. But what is interesting to note is that Orbital, once described as a niche manufacturer of smaller spacecraft, came into its own last year. The company secured four orders - 22 percent of the major manufacturers market share - while landing new customers in Europe and Asia. This shift indicates a growing attraction for smaller spacecraft, even among the large operators who usually procure large satellites for their fleets.
Space Systems/Loral (SS/L) continued to press forward as its parent company emerged from bankruptcy. In addition to signing four contracts, SS/L landed the XM Satellite Radio XM-5 satellite that many expected to go to Boeing. Boeing Satellite Systems remained focused on military business, though this past January, the company received its largest commercial order since 1997.
The near term will be interesting to follow. The major operators have built out their fleets - and backups, and now many satellite manufacturers will focus on the regional players to see if the majority of manufacturing contracts awarded throughout the next several years stem from the smaller operators.
By far, one of the most significant events that impacted the importance of satellite communications was the 2005 hurricane season in the United States. In the immediate aftermath of Hurricane Katrina, more than 20,000 satellite phones and terminals were deployed to the region. In just the first 72 hours following the disaster, satellite telephone traffic in the region increased more than 3,000 percent, while the number of subscribers increased more than 500 percent. Satellite phones were activated at a rate of more than 2,000 per day. Today, significant headway has been made in making satellite technology a top-line item for emergency response, but more work needs to be done. In the end, this market segment will emerge as significant to satellite business as the transmission of broadcast signals.
But the big news in 2006 will transcend the numbers, as business within the commercial satellite industry will be defined by the applications and services of tomorrow's customers. According to Futron Corp., hybrid solutions that combine satellite and terrestrial capabilities are being implemented, often in partnership with telecommunications companies; new standards and equipment are being promoted to expand the use of high-definition video and other services, opening new markets; and the availability of more agile and compact equipment is now operating on the move with Ku-band capacity for government and emerging applications.
The satellite industry is indeed undergoing a paradigm shift. Advanced technology already under construction or in orbit will have to be used for sophisticated transmissions of voice, video and data. Even though consolidation has had a dramatic impact on the global satellite industry, strategic relationships with complementary service providers ultimately will have to be the next wave of change to emerge. Partnerships with cable operators, telecommunication providers and content managers will define tomorrow's mergers and acquisitions.
Customized, mobile connectivity for data and video will lead the industry operators and manufacturers; payload size and the true need for more in-orbit hardware will shape the launcher scene beyond 2008; and complete transmission packages will be key for any operator's success globally or regionally.
Advancements on the Mobile Satellite Services sector will continue to grow with the industry players focusing on further development of their ancillary terrestrial component services. It seems that in the near-term, industry will become more specialized and segmented among large satellite applications and small satellite services, with some overlapping areas for voice and simple data transmissions in the developing world. In the long term business expansion will be defined by strategic partnerships outside of the industry and content innovations.
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