The report, published Oct. 11, shows that the relatively recent and widespread trend of increased cost control among FSS satellite operators is expected to further improve margins within the sector. NSR urged FSS operators to include possible future transactional activities, such as the potential sales of HellasSat, KT Satellite and Measat when developing business plans and decision-making strategies.

NSR Senior Analyst and Report Author Regina Riegerbauer said that although FSS sector growth slowed in 2011 compared to previous years, satellite operators are gearing up to enter a new phase of growth and face up to increased competition.

“Currently, all operators are investing strongly in expanding their fleets to spur future growth,” Riegerbauer wrote in the report. “CapEx spending has increased 17 percent on average for the last five years and is currently seeing record high levels. So far, this investment cycle has resulted in further improved backlogs, which demonstrate guaranteed cash flows going forward and confirm the satellite sector’s potential for those seeking solid long-term investments.”

NSR released a similarly positive report in August, which found that international commercial satellite operators grew their capacity leasing revenues by $635 million between 2010 and 2011 after cultivating revenue growth and aggressively targeting new markets such as mobility and other high-value services. 

In that report, NSR Senior Analyst 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,” said French. “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.”

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.”