Commercial Operators Foresee U.S. Demand Holding Steady in Mideast

by

PARIS — U.S. Defense Department demand for commercial satellite bandwidth will remain strong in the Middle East despite planned troop withdrawals as unmanned aerial vehicles (UAVs) replace military personnel as the users of capacity, the world’s three largest commercial satellite fleet operators are forecasting.

Even a sharp reduction in U.S and other allied troops in Iraq and elsewhere in the Middle East will have no material effect on military demand for satellite capacity in the region, officials from Intelsat, SES and Eutelsat said here Sept. 6-7.

“Demand will remain strong even after the troops leave,” said Christophe De Hauwer, vice president for strategic marketing at Luxembourg-based SES. “UAVs coming into service now require seven times more bandwidth than UAVs today.”

SES is predicting that government demand for C- and Ku-band satellite bandwidth will grow by 9.8 percent per year, on average, between 2009 and 2017. It will be by far the fastest-growing market segment, according to the company’s forecasts.

George Giagtzoglou, vice president for strategy at Luxembourg- and Washington-based Intelsat, said Intelsat is also forecasting continued substantial growth in government demand, including from the Middle East. The company’s current fleet does not have many satellites with good look angles over the region, but Giagtzoglou said Intelsat has seen no evidence that military traffic there will abate with the troop withdrawal.

“We are seeing continued strong demand, with the drivers being aerial and UAV applications,” Giagtzoglou said. “We think this will continue with Ka-band in general. Rain fade is no problem for UAVs. A Global Hawk needs 45 megabits per second for video, and you can run out of carriage capacity in a given region,” ensuring that military customers will maintain their satellite leases.

Paris-based Eutelsat has been one of the commercial operators that have most benefited from the military demand in the region because it has more satellites better positioned there than its competitors.

Matteo Altobelli, Eutelsat’s marketing director, agreed that military demand that leaves the region with the troops will be replaced by surveillance.

“The conflict’s ending in Iraq doesn’t mean the end of military activity there,” Altobelli said. “UAVs will be there to stay, and in fact this could be the dawn of new applications.”

Altobelli said demand may sag for a brief period, although there is not much sign of that yet.

Because many satellite lease contracts on behalf of the military are short-duration commitments, a shift in strategy that called for less satellite use would show up quickly in leases not being renewed, he said. This has not been the case as American forces have begun leaving Iraq.

“There are some who say that the U.S. Joint Strike Fighter, the F-35, could be the last generation of fighters physically piloted by humans,” Altobelli said. “Think of applications like border patrol. There will probably need to be more monitoring in the region, not less, after the troops leave. This market is here to stay.”