Satellite Vendors Ready to Meet Military Challenges

 

International Opportunities

While most vendors are concentrating on opportunities with the U.S. military, there are a growing numbers of opportunities outside of the United States. “We have actually seen as much if not more demand internationally as we are domestically,” says Martland. “Everyone seems to be following the lead set by the [United States] and realizes the need for getting information to the warfighter as well as sharing this information between allies. So we are seeing activity from a many of our allies, as well as the UN and NATO, for more advanced terminals, and virtually all are looking for the centralized control of the terminals from [network operations centers] they are establishing.”
Smith says, “It seems to be a follow-on market. Once we have developed this capability for more mobile, lightweight antenna systems, there will be an international market from our allies and others. We’ve already seen an increase in the military satellite business, which we have participated in, so the obvious next step would be to have terminals that go with those satellites. We don’t see a lot of that in 2008, somewhat driven by our focus on the U.S. market versus the expense and effort of an international sales channel. However, we are making some improvements in selected international markets in 2008 consistent with our growth plan.”
Vandermeulen also is confident about growth in international prospects for military equipment suppliers. “Demand for the next-generation terminals is growing outside the U.S. We have seen strong interest in efficient IP terminals in Europe, Asia and the Asia-Pacific regions. An example is Australia’s policy decision to support the WGS (Wideband Global Satellite) constellation to the extent of funding a sixth WGS satellite. This example reflects the need for coalition communications based on efficient open standards,” he says.
But while the international market is growing, the competition for those contracts is becoming more intense as well, says Perry. “International [ministries of defense] are always interested in U.S. communication technology, but there are capable international competitors. Harris is pursuing a few international [satellite communications] opportunities, but we are selective in the countries we serve. There are probably other opportunities than the ones we are currently pursuing.”
While many U.S. vendors are looking outside the United States, international manufacturers such as Stockholm-based C2Sat, a provider of shipboard stabilized satellite communications terminals, hope to make a breakthrough in the United States. “Our new Ku-band VSAT stabilized antenna product was launched in Washington D.C. in February last year, and since the introduction we have established many qualified leads in the [United States] A successful year 2008 would be a commercial breakthrough for C2Sat.”
One of the key questions for technology vendors is whether the military sector will offer them revenue growth in 2008 and constitute a growing part of their business. “Military purchasers are increasingly demanding high transmission capacity for marine and land-based units,” says Hanell. “C2Sat targets both the military and commercial sectors for terminals, and we expect that a significant part of our revenues this year will come from the military space side,” he says.
Martland also is confident that 2008 will be big for military revenus. “First we have to win the deals, but the short answer is yes, Newpoint expects to do more this year and next in the military space and more specifically military terminals,” he says. “I would expect this to be about 15 percent of revenues this year, possibly growing to as much as 40 percent in 2009.”
EMS’s Smith believes the company’s growth is related to its involvement in the B-2 program. “Our revenue will probably double with regard to the B-2 program,” he says.  About 25 percent of the company’s military revenues in 2008 will come from terminal deals, “and it will go up as the market matures and moves to the higher frequencies where EMS Defense & Space Systems excels.”

BOTTOM LINE

With the nature of conflict changing, there has never been greater demands placed on satellite players to provide strong communications to warfighters. Effective communications can mean the difference between life and death, and satellite technology, with all its inherent competitive advantages in delivering communications, is the focal point of military forces communications strategy. It is a market which is growing and more vendors are looking for a piece of the pie. While the United States is undoubtedly the biggest spender in this area, other nations are also investing to improve their communications capabilities. It promises to be an interesting time for technology vendors as they look to jostle for position in this increasingly competitive market. ■

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