SAN FRANCISCO
— Global satellite industry revenues jumped 19 percent to $144.4 billion in 2008 led by a 34 percent surge in ground equipment sales, according to a new report released by the Satellite Industry Association (SIA), a Washington-based trade group.

One industry analyst cautions, however, that the satellite industry will eventually feel the effects of the economic downturn.

“I’m hard pressed to think of a single industry that isn’t impacted by the economy,” said Jimmy Schaeffler, chairman of the Carmel Group, a research and analysis firm based in Carmel-by-the-Sea, Calif. “The satellite business will turn down later.”

During the last six years, worldwide sales for satellites, satellite services, launch vehicles and ground equipment grew at an average annual rate of 14.2 percent, according to the “2009 State of the Satellite Industry Report” released June 3 at the International Satellite and Communications Conference and Exposition in
San Diego
,
Calif.

“The satellite industry continued to post growth in 2008, led by satellite services and group equipment sales,” SIA President Patricia Cooper, said in a June 3 statement. “The results for the past year are encouraging, and frame the need for policy decisions that can affect the industry’s future growth such as export controls, broadband stimulus and
U.S.
government communications requirements.”

Worldwide satellite manufacturing revenues fell to $10.5 billion in 2008 compared with $11.6 billion in 2007 due largely to a drop in the number of spacecraft launched. Ninety-four satellites were launched in 2008, compared with 102 launched in 2007. The SIA study includes spacecraft and launch vehicle revenues in its statistics for the year a satellite is launched.

U.S.
satellite manufacturers continue to lose market share. The SIA report notes that U.S. companies claimed 41 percent of the world satellite manufacturing market in 2007 compared with 29 percent in 2008. During the same period, U.S. satellite sales declined from $4.8 billion to $3.1 billion. Only 21 satellites built by
U.S.
companies were launched in 2008, compared with 48 satellites a year earlier.

In the years ahead,
U.S.
and European satellite builders face growing competition from new competitors, according to the SIA report. Of the 21 new commercial geosynchronous satellite orders announced in 2008,
U.S.
firms received 11 orders or 52 percent of the business, European companies claimed 7 orders or 33 percent, and Russian, Chinese and Japanese manufacturers captured one order each for a combined total of 14 percent of the business.

Between 2007 and 2008, the satellite manufacturing business experienced a marked shift as commercial customers accounted for nearly 50 percent of satellite sales in 2008 compared with 33 percent in 2007 when government and military customers accounted for 67 percent of sales, according to the report.

While satellite manufacturing sales fell, global launch industry revenues grew 20 percent to $3.9 billion in 2008 compared with $3.2 billion a year earlier due largely to an increase in launch prices. “One factor influencing launch price increases was fluctuating exchange rates,” according to the SIA report. Last year, government agencies paid to launch 37 commercial satellites while commercial customers contracted for 41 launches.

The strongest segment of the industry, the satellite services sector, garnered revenues of $84 billion in
2008, a
16 percent increase from the $72.6 billion in 2007 sales. The sector experienced the strongest growth in satellite radio and television broadcasting where revenues grew from $57.5 billion in 2007 to $67.3 billion in 2008. Satellite television alone, with 130 million subscribers worldwide, took in $64.9 billion last year, according to the SIA report.

While satellite radio sales remained strong with revenues of $2.45 billion and 20.5 million subscribers, growth in this sector has slowed considerably. From 2006 to 2007, satellite radio revenues jumped 29 percent. From 2007 to 2008, the growth rate was 18 percent, according to the SIA report.

The SIA report attributes the health of another strong segment of the market, the ground equipment sector, which includes network equipment and consumer equipment, to widespread use of satellite television, broadband, mobile satellite and GPS devices. The overall ground equipment market was valued at $46 billion in 2008. Sales of GPS devices accounted for slightly more than half of those revenues, according to the SIA report.

In spite of the economic crisis, the consumer segment of the satellite business is likely to remain strong. “To cut expenses, people are staying home. It’s less expensive than going out so people can justify spending money on in-home video and entertainment,” Schaeffler said. “In general, companies that provide bandwidth to consumers, businesses and government are in a pretty good position to weather the recession relative to banking or real estate companies.”