State Of The Industry: Continued Years Of Growth

For the fourth year running, the global commercial satellite industry has had solid, measurable growth, generating $88.8 billion in revenues in 2005, according to the 2006 “State of the Satellite Industry Report” issued by the Satellite Industry Association and Futron Corp. That’s up 7.4 percent from 2004’s total of $82.7 billion, which was 11.3 percent higher than 2003’s $74.3 billion in revenues.
“The 2006 SSI report is encouraging for the whole space industry,” says TelAstra President Roger Rusch. “Clearly the industry has recovered dramatically from declines in several sectors that occurred early in the decade.”
The latest report, however, actually shows a decline of nearly $15 billion in 2004’s reported revenues. In its 2005 report, Futron reported industry revenues of $97.2 billion, but in the 2006 report, the 2004 revenues are $82.7 billion. Pamela Luskin, program manager for Bethesda, Md.-based Futron, says the decline comes from new study methodology and is not a signal of weakness in the industry.
“This year we had the opportunity to revisit several of our methodologies that were established nearly 10 years ago,” says Luskin. “The new, lower numbers are primarily due to our change in methodology for the DTH [direct-to-home] sector, which makes up a large portion of overall industry revenues. In addition, we have more up-to-date data for some of the other service sectors as well, such as mobile phone and mobile data.”
The report continues to evaluate performance across the same four sectors: satellite services, satellite manufacturing, launch and ground equipment.
The satellite services sector continues to be the industry’s biggest, accounting for 59.5 percent of all revenues in 2005 with $52.8 billion. This represents a 12.6 percent increase from revenues of $46.9 billion in 2004. The satellite services sector has shown the largest increase in the industry from 2000 to 2005, as revenues climbed 82.7 percent throughout the period.
The ground equipment sector was the satellite industry’s second largest revenue-generating sector in 2005, garnering $25.2 billion in revenues, or 28.4 percent of the industry’s global total. The sector grew 10.5 percent over 2004, when revenues were $22.8 billion, continuing a trend of steadily improving year-by-year revenue growth since 2000.
In contrast, the satellite manufacturing sector had a slow year 2005. Its $7.8 billion in revenues was 23.5 percent less than 2004’s 10.2 billion, and 2005 was the worst year for the satellite manufacturing sector since reporting revenues of $11.5 billion in 2000 – the last year in which the Satellite Industry Association and Futron revised their figures.
The launch sector reported revenues of $3 billion in 2005, an improvement of 7.1 percent over 2004’s $2.8 billion in revenues. The industry may never return to the levels reported in 2000, when the sector took in revenues of $5.3 billion, but the 2005 totals match the revenues reported in 2001 and may signal a recovery from the very slow launch rates of the past few years.
The depression that seemed to engulf the satellite industry in the wake of the collapse of the telecom/dot.com era is over, though it took five or six years to shake off the effects.
With the improvement in satellite industry revenues, “New technologies are being funded,” the report says. Thanks to consumer hunger for entertainment; government demand for connectivity, and the long-predicted consolidation of companies within the satellite industry, the economics of the business are finally looking up. However, there are still some issues to be faced for the satellite industry, especially in the hard-pressed manufacturing and launch sectors. Still, those who weathered the storms of the early 21st century can take satisfaction in their hard-fought survival.

State Of The Industry: Continued Years Of Growth

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