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Euroconsult: NGA’s EnhancedView Program Slowing Overall EO Market Growth

By | October 16, 2012

      [Satellite News 10-16-12] Stabilization in military data procurement following the awards of the NGA EnhancedView contracts to DigitalGlobe and GeoEye slowed the commercial Earth observation (EO) data market significantly in 2011, according to a Euroconsult report issued Oct. 16.

         The Euroconsult report, “Satellite-Based Earth Observation: Market Prospects to 2021,” found that the EO market experienced growth of 6 percent to $1.4 billion in 2011, following five years of strong growth of more than 20 percent between 2006 and 2010.
         Euroconsult Director of Earth Observation Adam Keith said that while the firm attributed the primary cause of the decline to the NGA EnhancedView program, the trend disguises significant growth in further applications and regions.
         “In particular, data sales to international defense continue to grow strongly, reaching a value of $400 million in 2011,” said Keith. “Sectors such as engineering, infrastructure and location-based services also continue to develop. The commercial data markets in South-East Asia, Latin America, Russia and CIS are all experiencing high growth rates. With these drivers supporting the industry, commercial data sales are forecasted to reach $3.9 billion by 2021.”
         The EO industry has worked diligently to cultivate opportunities in a challenging economic environment mainly by launching new satellites. During the next 10 years, 288 satellites will be launched for EO and meteorology purposes, compared to 149 satellites launched over the previous decade. EO satellite operators hope the escalation will increase data supply and provide opportunities for satellite manufacturers.
         Keith noted that the U.S. government’s investment in supporting the majority of these satellites is greater than ever in order to support global objectives, such as climate change and environmental monitoring, or as in the case of emerging EO programs, to support local industry development and meet local demand for data.
         “Even though governments are facing tightening budgets, progress is still seen at each level of the value chain, incorporating manufacturing, launch, data and services,” Keith said in the report. “Government investment in 2011 reached a record high of $6.7 billion, with mounting investment from emerging programs.”
         Emerging EO development programs are also creating significant potential to grow manufacturing revenues. In total, 30 percent of EO satellites are scheduled to be launched from emerging and developing programs in Asia, Latin America, Africa & the Middle East over 2012 to 2021. The revenues that the market will generate through manufacturing EO satellites for non-meteorology purposed alone will total $24.3 billion between 2012 and 2021 – a projection that represents a 34 percent increase over the previous decade.
         Keith wrote that an increasing number of units from emerging and commercial programs would provide positive export opportunities for the market, though the majority of these revenues would be associated with leading government EO programs for an established industry.
         “This is salient with delays and budget concerns in key programs in Europe and the U.S., potentially impacting the industrial base,” said Keith. “American industry in particular could see a decline in EO manufacturing revenues over the next decade, with pressure rising to modify export control regulations … A key to program development in emerging regions is technology transfer or localization with existing manufacturers as countries seek to establish and develop a space industry.”

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