Recapitalization Programs Drive Communications Satellite Production

Recapitalization Programs Drive Communications Satellite Production
May 24, 2010

NEWTOWN, Conn. — Forecast International projects that the worldwide commercial communications satellite market will be worth $45.6 billion from 2010-2019. In terms of unit production, FI projects that 428 individual communications satellites will be produced during that timeframe. These projections are based on a review of 66 satellite production programs in FI’s recent analysis, "The Market for Commercial Communications Satellites."

“Demand for satellite services is causing satellite operators to expand their fleets,” said William Ostrove, Forecast International Space Systems Analyst and author of the report. “Satellite services are growing particularly fast in developing markets, such as in Eastern Europe, North Africa, and the Middle East." Because these areas tend to lack cable and fiber-optic networks and thus the competition such networks would provide, barriers of entry to satellite operators are lower.

The study identifies broadband Internet as an important area of growth for the communications satellite industry. "Governments around the world have begun major pushes to introduce broadband to ever-increasing populations," said Ostrove.

While terrestrial land-line service providers have received a large share of the funding under these efforts, satellites are ideally suited to extend broadband Internet services to remote regions of the world. The small populations of these regions do not justify the expense of extending terrestrial land-line services.

Another important area of growth for satellite services is direct-to-home digital television broadcasting. According to Ostrove, "This is especially true in areas of the world where cable and fiber-optic line penetration is low." In addition, as consumers have reduced their spending budgets, they have looked for ways to find entertainment at home. This has created a desire for premium television services. Satellite operators have benefited from this trend.

Top manufacturers in the commercial communications satellite industry include Space Systems/Loral, Thales Alenia Space, EADS Astrium, China Aerospace Science and Technology Corp, and Lockheed Martin.

Boeing and Lockheed Martin traditionally focused on U.S. government contracts; however, as several large satellite programs come to an end, and budget constraints limit future programs, the two industry giants may begin to re-enter commercial competitions. In fact, Boeing has already introduced a modified satellite bus – the 702MP – that it expects will compete well in the commercial market.

Forecast International, Inc. (www.forecastinternational.com) is a leading provider of Market Intelligence and Analysis in the areas of aerospace, defense, power systems and military electronics.