Fueled in large part by the growing popularity of direct-to-consumer television and satellite radio services, the satellite industry grew 7.4 percent in 2005, according to the Satellite Industry Association (SIA).
Overall the industry generated $88.8 billion in revenue globally in 2005, according to SIA’s 10th annual “State of the Satellite Industry Report.” S ervices accounted for 60 percent of the 2005 total, compared to just 45 percent in 2000, according to the report, which was done for SIA by the Washington-based consulting firm Futron Corp.
By far the fastest-growing satellite-services segments were direct-to-home television and radio, which outpaced mobile satellite data and telephone services as well as traditional private networks known as very small aperture terminal systems, or VSATs.
The 7.4-percent industry growth rate in 2005 was slightly above the average 6.7-percent growth rate so far in this decade, but substantially lower than the 11.3-percent growth posted from 2003 to 2004. Revenue during that period increased from $74.3 billion to $82.7 billion.
David Cavossa, executive director of the Washington-based SIA, attributed the slower 2005 growth to the fact that 2004 saw a big spike in military purchases of commercial satellite capacity.
“While that is still one of the strongest markets we have it did not grow as fast in 2005,” said Cavossa, who unveiled the report June 14 during the 5th annual International Satellite and Communications exhibition in San Diego .
During a luncheon keynote speech the same day, Lt. Gen. Michael Hamel, commander of the U.S. Air Force’s Space and Missile Systems Center in Los Angeles, noted that the commercial satellite industry helped the military achieve an 800-percent increase in available bandwidth during Operation Iraqi Freedom.
Growth occurred in every category during 2005 save one: satellite manufacturing. In that market, revenue dropped 24 percent in 2005, to $7.8 billion, largely because of a decline in government contracts. Government business accounted for 71 percent of satellite manufacturing revenue last year, compared to 82 percent in 2004.
There was more bad news for the U.S. satellite manufacturing industry. In addition to experiencing a revenue decline from $3.9 billion to $3.2 billion, the U.S. industry saw its market share erode, from 46 percent in 2004 to 41 percent in 2005. That continues a decline that began in 2000 when U.S. market share was 61 percent.
Cavossa said the drop-off globally in 2005 reflects the fact that satellite manufacturing revenue is not counted until the satellite is launched. Cavossa noted that launch activity in 2005 was affected by the steep decline in satellite orders that occurred in 2002.