NSR Highlights Capacity Lease Revenue Growth, Future C-band Backhaul Trends
By Jeffrey Hill | August 8, 2012
[Satellite TODAY Insider 08-08-12] International commercial satellite operators grew their capacity leasing revenues by $635 million between 2010 and 2011, according to a study published Aug. 7 by analysis firm NSR. The report, “Global Assessment of Satellite Supply and Demand, 9th Edition,” found that satellite operators are cultivating revenue growth by aggressively targeting new markets such as mobility and other high-value services. NSR Senior Analyst and Report Author Patrick French said that this strategy should maintain sustained revenue expansion for operators in the coming years.
“The Ku-band market will continue to be the main growth engine for the commercial satellite market for the coming 10 years,” French said in the report. “The direct-to-home (DTH) TV market alone could add $1.4 billion in net new revenues by 2021 out of $4.3 billion expected in total for the Ku-band segment. Solid Ku-band revenue gains are also expected from the video distribution, enterprise data, commercial mobility and government/military verticals.”
The NSR report praised the commercial satellite industry for beginning to fully grasp the significance of high throughput satellites (HTS) and their potential to drive new market growth in many other market verticals beyond satellite broadband access services. The report stated that the combined HTS markets could add almost $1.9 billion in net new revenues to the satellite industry in the coming 10 years — satellite’s second largest gain after the Ku-band market.
French also noted that the widebeam Ka-band market also is beginning to establish some traction for the industry, especially for the government and military sectors operating in the Middle East. “This is the case even if total revenue growth is expected to be substantially smaller that the Ku-band or HTS side of the business,” said French. “There should also be continued strong growth in C-band video distribution services driven by expanding carriage of HD and standard-definition channels, as well as the slow ramp up of 3-D and eventually Ultra HD channels.”
Though NSR was extremely positive on the bandwidth market, the firm identified a potential weakening in C-band backhaul demand after 2015 should the industry begin to rapidly migrate to the use of HTS and O3b capacity for data-intensive 3G and 4G backhaul. This argument was also made in a July NSR report written by NSR Analyst Jose Del Rosario, who predicted that a dramatic long-term shift from legacy SCPC and TDMA systems to HTS and the O3b constellation could bring both threats and opportunities for companies in the space segment, capacity, end-to-end services and equipment sectors.
“OPEX considerations, which have hampered market adoption of satellite solutions due to high bandwidth costs, will see a big drop,” NSR Senior Analyst and Report Author Jose Del Rosario wrote. “This, along with the needs of the mobile workforce, will lead to higher penetration levels in key markets for both developing and developed countries.”
These trends, which NSR called “game-changers,” could change the strategic outlook of companies in relevant sectors. Del Rosario added that new HTS platforms would lead to a re-examination and an eventual swap-out of solutions currently being deployed to more cost-efficient platforms.