— The principal satellite fleet operators continue to scan their markets for signs of a downturn. So far, they say, there are no indications of one.
Not all operators are alike – some have much more civil government and military revenue than others, and some have a few customers, such as television broadcasters, that account for a disproportionate share of their revenue.
Owners of satellite fleets nonetheless appear to paint a consistent picture of the overall market for C- and Ku-band transponders. The conclusion: The midterm forecast for a market growing at an annual rate of about 3.5 percent has not changed.
Ku-band is growing faster than C-band – 4.5 percent per year compared to 2.4 percent per year, according to one market analysis produced by SES of Luxembourg that forecasts market growth through 2016.
With overall growth viewed as rising only moderately, it may be no surprise that even the larger satellite operators are seeking joint ventures as a way to share capital costs.
Intelsat has been doing this for years with Sky Perfect JSat of Japan for the Horizons satellites and with Telenor of Norway for a satellite over
. In recent months Intelsat demonstrated a different kind of joint venture with
investors for a satellite called New Dawn.
SES joined forces with its European rival, Eutelsat, to debut S-band mobile services in
to reduce the risks to each company. More recently, SES and start-up satellite operator YahSat of Abu Dhabi agreed to a joint venture, called YahLive, to market direct-to-home television service in the
using a portion of the Yahsat-1 satellite, to be launched in 2010.
has recently deepened its collaboration with
‘s Nilesat over development of Nilesat’s 7 degrees west orbital slot in a deal that permits Nilesat to grow its business while waiting for its next satellite, and permits Eutelsat to further establish itself in the
using available satellite capacity.
, and Chunghwa of Taiwan are furthering their long-standing collaboration to build the ST-2 telecommunications satellite.
In the same region, Asia Broadcast Satellite (ABS) of
entered into a deal with SingTel under which SingTel will purchase C-band capacity aboard the ABS-2 satellite, now under construction. ABS is a one-satellite operator that reported about $30 million in revenue in 2008. The SingTel investment provides ABS with cash to finance its ABS-2 satellite. SingTel gets needed additional capacity without having to finance the full construction and launch costs of a satellite.
As has been the case for several years, the overall fixed satellite services business looks highly concentrated when viewed from a distance. SES of Luxembourg and Intelsat of Bermuda and Washington each has about a 25 percent share of the annual revenue in the sector, which in 2008 totaled around $9.5 billion. Eutelsat’s 14 percent and Telesat’s 7 percent mean that the top four companies together account for 70 percent of the annual business.
Still, the industry sees more new entrants than departures, despite the well-publicized difficulties of operators with fleets of just one or two satellites.
Companies viewed as facing challenges as recently as a year ago – ABS in Asia, Nilesat in the Middle East, Rascom in Africa, Satmex in Latin America – have found ways to survive, and in some cases even expand.
Meanwhile, few of the start-up operators, some started for purely political motivations – Venesat in Venezuela, Nigcomsat in Nigeria, KazSat in Kazakhstan and VinaSat in Vietnam, among others – have shown any willingness to withdraw from the business.