Satellite Technology Feature Article
New Study Says COMSAT Market Worth $52.7 Billion Through 2021
By Peter Bernstein, Senior Editor
With so much attention in the communications world focused on terrestrial activities, those of use with a passion for such things tend to look at the communications satellite (COMSAT) market as almost an afterthought. As recently released research from Forecast International proves this is a mistake. Massive opportunities and growth remain. The sky seemingly really is the limit.
Need for better coverage of broadband driving demand
It may sound almost quaint to people who live in the developed world but the footprint for global broadband, applicable to a number of services including digital television and extension of terrestrial mobile services, has a lot of gaps and a huge population to reach in areas that are under-served because of the cost of cellular and fiber network build outs.
Forecast International’s study, “The Market for Commercial Communications Satellites" projects that the commercial communications satellite market will be worth $52.7 billion from 2012-2021. In fact, as an indication of how much of a growth industry this is, the study, which tracks some 49 satellite production programs, 419 individual communications satellites will be produced during that timeframe.
As noted, driving this is the world’s insatiable appetite for high-speed broadband Internet, digital television and video broadcasting, and for government services. In addition, the report notes that governments are increasingly using COMAST services instead of purchasing new satellites themselves and deploying their communication packages under a scheme known as hosted payloads.
Demand over the forecast period is expected to be strong in developing markets such as Eastern Europe, North Africa, the Middle East, Latin America, and Asia. William Ostrove, Forecast International space systems analyst and author of the study, said demand for Broadband Internet by satellite operators is particularly acute in rural areas, where high-speed Internet demand isn't high enough to justify the cost of laying miles of cable.
He added anecdotally that satellites are also useful for increasing connectivity for mobile applications. "Airlines such as United, Southwest, and JetBlue plan to equip their entire fleets with Wi-Fi in the future. Ka-band satellites will be a primary supplier of the bandwidth needed to provide in-air broadband Internet connections," Ostrove stated.
The analysis of why digital television is a major driver and will continue to be so was interesting. There are the obvious reasons as to why this is true in places where cable and fiber-optic line penetration is low, such as Eastern Europe, North Africa, and the Middle East. However, Ostrove found that even where cable providers exist, satellite has much to offer. The continued popularity of Dish Networks in the U.S. is an example, and Europe is another where satellite operators are providing television to 84 million homes on the continent.
Forecast International believes the top COMSAT manufacturers list will look very much in the future like it does today with Space Systems/Loral, Thales Alenia Space, EADS (News - Alert) Astrium, Boeing and Lockheed Martin heading the list. And, while not mentioned on the list, given what is going on in the entire commercialization of space, what will be fascinating is the developing ecosystems that will emerge between private launch companies like SpaceX (News - Alert) and others and the makers of the satellites that would pay the freight.
It was long felt that satellite communications had a problematic future. The laws of physics make them less than desirable for voice communications except for hard to reach places, and there have been questions about business models in terms of their competitiveness with terrestrial systems for things like video. However, as the study correctly identifies, the need for speed and everything becoming data has been a game-changer, and this is without factoring in the expected explosion of growth coming from M2M applications and more intense use of location-based applications. It all adds up to the reasons why so many new satellites are in the offing. The demand is there and growing and the economics of satellite for a whole host of applications make the use of their services price competitive.
If the study is correct, COMSAT is more than just competitive. It is on a path toward significant growth. The winners are not just the vendors but all of us as broadband connectivity expand to become truly universal and affordable.
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Edited by Rachel Ramsey