As Commercial Markets Falter, Government and Military Sectors Once Again Drive Demand for Satellites, According to Northern Sky Research

Business Wire,  Sept 23, 2003  

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ORLANDO, Fla.--(BUSINESS WIRE)--Sept. 23, 2003

Market to Generate $52.3 Billion in Revenue Through 2007

Northern Sky Research today released its newest market survey and forecast report: "Global Demand for Satellite Systems in the Commercial, Military and Science Satellite Sectors". The report provides an in-depth overview of satellite manufacturing in the globe by tracking demand trends, satellites on order, as well as economic and technological factors that affect program development across multiple segments and sub-regions over a five-year period.

The report concludes that, from an average of 90 satellites launched annually during the period 1995-2000, the period 2002-2007 is expected to yield an average of 60 satellite launches annually. The military sector is also expected to boost the industry's revenue base in terms of military-specific satellite orders. In addition, the military as a customer base will likewise drive commercial satellite deployment as it relies increasingly on commercial-based systems to supplement its communications and remote sensing data needs.

"It has become widely expected for the commercial satellite sector to falter due to the world's overcapacity in terms of transponder and bandwidth capacity. The military and government sectors are now regarded as the engine of growth for the satellite manufacturing industry. Indeed, the United States Government is looking to continue its dominance in space in military and economic terms, and will likely continue to exert efforts in order to retain its dominant position by deploying more satellites," states Jose del Rosario, senior analyst of Northern Sky Research and author of the report.

However despite the industry's recent difficulties, the commercial satellite sector is still an attractive market to tap in terms of the number of satellites being ordered. In revenue terms, the military sector is indeed expected to account for the largest share due to the high price military systems fetch. However, military systems are largely national programs in that contractors almost in all cases belong to the country or nation that is deploying a military satellite system. In the global marketplace, it is difficult to bet one's fortunes on military payloads, except of course in the United States, which is the largest purchaser and user of satellite systems for defense purposes.

Nevertheless, commercial programs benefit from the increasing role of the military, specifically the U.S. Department of Defense. Ties between the military and civilian sectors continue to be inextricably linked due to dual-use technologies and dual-use customers satellites inherently serve. During the Iraq War for instance, the commercial sector experienced a boon in occasional use traffic and revenues due to the number of news items uploaded and downloaded via commercial satellites. More directly, the Pentagon itself was a big source of commercial traffic and revenues due to its growing reliance on videoconferencing to keep distant war planners in close contact with front-line leaders.

The science satellite sector likewise benefits from increased usage by government and military entities. The U.S. government sector, in particular, will rely more on commercial remote-sensing imagery and will bolster the satellite industry under a new White House policy released in May 2003. The new policy is meant "to advance and protect U.S. national security and foreign policy interests by maintaining the nation's leadership in remote-sensing space activities and by sustaining and enhancing the U.S. remote sensing industry." According to del Rosario, "this renewed industrial policy thrust will lead to increased deployments of commercially-based remote sensing satellites, estimated to yield 14 out of 75 total deployments through 2007. Although governments will still carry the bulk of launching science programs, the 14 commercial satellites can be considered substantial given that no commercial units were launched in 2002."

Regionally, North America is expected to lead the globe in satellite deployments and accompanying revenues for the 2002-2007 timeframe. Europe is expected to be a close second in terms of satellite deployments, and these two regions combined are expected to account for over 70 percent of all satellites deployed. However, the North American region led mainly by the United States is expected to account for 58 percent of the industry's revenue streams. This trend is largely due to the deployment of highly expensive military satellites.

"Global Demand for Satellite Systems in the Commercial, Military and Science Satellite Sectors" is a multi-client report now available from Northern Sky Research. For additional information on this report, including a full table of contents, list of figures and executive summary, please visit www.northernskyresearch.com or call Northern Sky Research at 407-352-5295.

Northern Sky Research is an international market research and consulting firm specializing in satellite technology and applications. Northern Sky Research primary areas of expertise include satellite technology, IP applications, and broadcast services. With extensive expertise in all regions and a number of satellite industry sectors, Northern Sky Research is a leading provider of in-depth market insight and analyses.

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