The business of leasing satellite capacity
�will grow faster in the Middle East, North Africa, Latin America and China than anywhere else in the next decade when measured by revenue
, according to a new market study by Euroconsult of Paris.
While continued expansion of satellite television, especially high-definition broadcasts, will keep Western Europe and North America in their current positions as the two top revenue-generating regions for fixed satellite services (FSS),
�the rate of growth in
�developing nations will be faster, the study concludes.
In the 14th edition of its “World Satellite Communications and Broadcasting Markets Survey � 10-Year Outlook,” Euroconsult says only one region – Northeast
�Asia, meaning Japan and South Korea – will show a decline in satellite communications revenue
�during the period.
Competition from terrestrial communications technologies in these nations will erode the position of satellite-service providers
in both nations in a decline that
already has begun, according to Euroconsult.
The study, using financial data from
companies’ 2006 results, finds a global
industry that has returned to relative health but can no longer count on double-digit demand growth, except in certain emerging markets.
On the revenue-generating side, Western Europe remains the most profitable place to do business when measured by the average transponder lease prices
The contrast with North America remains sharp, and
only partly is explained by the decline of the U.S. dollar relative to the euro. “Protected by a quasi-duopoly for satellite TV broadcasting,” Western European satellite operators can continue to charge an average $3.15 million per year for a 36-megahertz transponder, Euroconsult says.
The duopoly in question, SES of Luxembourg and Eutelsat
of Paris, has helped solidify these two companies’ places as the second- and third-largest fleet operators by revenue
, after Intelsat of Bermuda and Washington.
In North America, meaning Canada and the United States –
�Euroconsult counts Mexico as part of
Latin America –
�the average transponder leased
for $1.56 million in 2006.
Elsewhere, prices vary greatly. In South Asia, for example, a transponder generates an average $1 million per year, in part because the Indian government produces its own satellites and obliges domestic broadcasters to use this capacity.
In the Middle East, depending on the orbital slot, transponders are leased for $2.5 million to $3 million per year, a situation that could change with the arrival of new satellite capacity in the next several years and the evolution of the U.S. military presence there.
Globally, the average transponder in 2006 leased
for $1.64 million, Euroconsult says, forecasting that in the next five years, transponder revenue
will grow by an annual average rate of 4.5 percent
The relative health of the global commercial satellite industry has been helped by the fact that many fleet operators have reduced
�capital spending in recent years, helping to increase the fill rates on existing
satellites and to keep transponder price levels firm.
Among satellite operators, spending
�capacity as a percentage of
, which had
been as high as 50-70 percent in the 1990s, in the past five years has dropped sharply, reaching 29 percent in 2006, according to Euroconsult.
The biggest players – SES, Intelsat, Eutelsat and Telesat Canada – continued to make capital investments, but many of the smaller, regional operators did not.
Measured by 2006 revenue
, Intelsat and SES account for about 50 percent of the total fixed satellite services market, not including the two large U.S. satellite-television broadcasters, DirecTV and EchoStar, which use their own fleets to beam their
Adding third-ranked Eutelsat and fourth-ranked Telesat Canada, the top four fleet operators have about two-thirds of the global market in terms of revenue
Average net profit in 2006 for the entire group of satellite operators – Euroconsult counts 33 of them – was 11 percent. This figure is distorted by the high debt level at Intelsat following ownership changes. When Intelsat is removed, the average net profit among satellite operators is 17 percent, according to Euroconsult.