Satellite industry battles on to unexpected growth
 Honolulu - special to the IIC. “It’s been an interesting and challenging year for the satellite industry,” says Susan Irwin,” but the recession has not had the same effect as in many other industries.” Ms Irwin, a Washington DC based consultant in the satellite sector, says that whilst the sector has not escaped entirely unscathed, there has been general growth in aggregate demand globally.
Meanwhile, she says, new technological developments from high throughput satellite systems to router architectures in space are now looming and will create new applications and new business models, whilst there is now confirmed takeup of High Definition TV services that continue to absorb bandwidth. Spectrum – or its lack of availability – may be one constraint in the future as the assigned bands are exhausted pushing the industry into further migration. Occasionally, too, the sector has had to contend with interfering terrestrial systems that can affect its ability to deploy services.
But it is the current lack of recessionary impact has clearly caught the sector by surprise. “Everyone thought there was going to be a downturn at the end of 2008 and the market would collapse,” says Peter Jackson, CEO of AsiaSat, based in Hong Kong.”What we did see in the first couple of months was exactly that scenario play out, and we saw the dramatic reduction in the TV sector business from TV advertising, but the sector was supported by subscription TV. Eventually, we in the industry realized that the recovery was sustainable. The lesson to learn, says Mr Jackson, is to recognize that the industry could build the best satellite systems possible, but it is “the fundamental economics of the customers of the satellite industry” that really counts.
The satellite industry is clearly also keen to demonstrate that it can support many applications and executives freely make comparisons between business performance in broadcasting and telecom areas given that many providers operate in both segments. Broadcasting itself includes both DTH and broadcast to cable network head-ends for onward terrestrial programme distribution, whilst telecom applications may support specialist mobile services as well as cellular backhaul amongst many others.
The right mix
The mix is generally seen as a stabilizing one. And new territories as well as applications are coming on stream. “We have seen strong growth in Africa where there is a substantial amount of cellular backhaul and mobility requirement now appearing says Philip Spector, EVP and General Counsel of Intelsat, the world’s largest fixed satellite services provider.
The pattern is repeated across the developing world, says Mr Spector, where there is demand for cellular backhaul to meet the needs of burgeoning terrestrial mobile services, as well as Internet connectivity that can be deployed to remote villages typically lacking even basic telephony services; the network is completed with coverage through WiFi or WiMAX type networks. The industry of course supports direct-to-ground mobile services too. Telecom accounts for more than 50% of Intelsat’s revenues but in broadcasting too, new demand is appearing, says Mr Spector. “We are seeing demand for HD services and even starting to see demand for 3D services.”
Asia in general represents the world’s fastest growing market in pay-TV and this growth has rippled through the industry. “[Asia] has the advantage of a large number of potential consumers [across which costs can be spread, but it is not a homogeneous area…there will be a requirement for DTH systems more or less on a country by country basis,” says Alan Young, CTO of SES World Skies,, a satellite services provider.”There will be lots of demand for transponder capacity [going forward]. There is a large amount of HD content that is available and TV sets are now HD-enabled.
Government business, a catch-all category that covers anything from formal development programmes, disaster relief, and military support in conflict zones, has been another good sector for many players too. So, too has the specialist requirement for civilian aeronautic telecommunications and maritime communications. Executives muse on other possibilities, including the mass distribution of digital cinema to commercial movie theatres that could be both cost effective and prospectively provide substantial protection against piracy.
- Stephen McClelland
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