Satellite operators painted an optimistic picture for the years ahead with new growth opportunities as well as strong demand in core markets such as video.

The industry is“in a dynamic phase,” Yves Blanc, director of strategic planning and institutional relations at Eutelsat, said Sept. 3 in Paris at  Euroconsult’s 5th World Symposium on Markets for Satellite Business.“We are looking at expansion and growth. DTH (direct to home) remains more than ever the core business. In 2010, in Western Europe, we expect to see 40 to 50 transponders for DTH and 10 to 15 transponders for broadband and data. In our second continent (mainly Eastern Europe), we expect to see 20 to 30 transponders for DTH services as well 15 to 20 transponders for broadband and data services.”

SES Global and Intelsat joined Eutelsat on the opening panel, as officials from the three largest communications satellite operators agreed that there have been considerable changes to the fixed satellite services landscape in recent years.

“Two operators account for around 50 percent of total revenues,”said Phillip Spector, executive vice president and general counsel at Intelsat, said, referring to his company and SES Global. “There is a changing operator landscape. Five operators account for 75 percent of revenues. Content globalization is driving demand for global operators.”

However, Spector was somewhat cautious in terms of predicting overall growth for operators. “This is not an industry is going to see huge leaps and bounds in growth, but we see the growth we are having continuing for quite some time,"  he said.

With the satellite operator landscape now dominated by stronger, bigger players, the question is what the demands will be for satellite capacity throughout the next few years. All operators pointed to numerous new growth opportunities, while also admitted that plain, old-fashioned video would remain the dominant revenue generator going forward.

“Numerous markets will drive an increase of C-band, Ku-band and Ka-band utilization over the next five years,” said Christophe De Hauwer, vice president of strategic and business planning at SES Global. “These include residential broadband, government applications, enterprise networks, aeronautical applications and maritime applications.”

De Hauwer also believes the demand for services in the aeronautical services will still be strong even though the market is proving tough to crack. In terms of the maritime sector, he said SES was seeing strong demand for more Ku-band based services, as this sector moves away from L-Band.

However, while there may be attractive new markets for capacity, video will sill dominate.“Video is a huge demand driver for the future,” said De Hauwer. “Three years ago we did not expect the demand for video would be so huge. There has been emergence of new DTH operators at increasingly niche audiences. Compression improvements are also driving video. As large screens proliferate throughout Europe, we believe there will be demand for a significant increase in transponders in the video market.”

The mobile space also is becoming a bigger focus for the larger operators, as evidenced by he SES Global’s joint venture with Eutelsat. The two rivals announced in October they were teaming up for what they dubbed“the first European satellite infrastructure for broadcasting video, radio and data to mobile devices and vehicle receivers.”The joint venture was approved by the European Commission in July and the first satellite should be in orbit by early 2009. The W2A satellite will provide six national spot beams to provide service to France, the United Kingdom, Germany, Spain, Italy and Poland.

 “Mobile TV is a huge market for the future,” said Blanc. “One of the main solutions to address the market is S-band. Mobile broadband can attract a number of markets such as cruise ships, high-speed trains, commercial planes, small boats and yachts, business jets, trucks, cars, and personal terminals.”

More New Markets

One of the highlights of the Symposium was a presentation by Cisco‘s Space Initiatives Director for Europe, John Egan, who outlined why Cisco is beginning to take the satellite industry “very seriously.” The company, best known for its work in the telecoms space, is ramping up its efforts to generate revenues from the satellite sector.

“We have set-up a ‘satellite vertical’ [in essence, a new business unit devoted to satellite] within Cisco to work with customers in the satellite business,”Egan said.“We now have a planned emphasis on the satellite industry as an area where we want to concentrate on. We have a very bold vision. One day we think that satellites will be active nodes on the Internet. It is about one world, one network, with terrestrial and space based communications as part of a network of ubiquitous global services.”

The company has ramped up its efforts in terms of training its sales staff to sell solutions to the satellite industry and is pinning its hopes on its Internet Router in Space (IRIS) initiative, an industry-government collaboration for the U.S. Department of Defense that will demonstrate the viability of conducting military communications through an Internet router on a satellite.
Intelsat General Corp. is managing the program, which will serve as a computer processor in the sky, merging communications being received on various frequency bands and transmitting them to multiple users based on data instructions embedded in the uplink. The payload will support network services for voice, video and data communications, enabling military units or allied forces to communicate with one another using Internet protocol and existing ground equipment.

Cisco providing commercial Internet Protocol networking software for the on-board router aboard Intelsat’s IS-14 satellite, which is set for launch in the 2009 first quarter.

“Satellite is an industry in transition and at an inflection point,” Egan said.“We believe we can help customers deliver better products. We are talking to satellite manufacturers that believe having IRIS will revolutionize the business over the long-term.”