Digital TV, emerging markets fuel satellite growth: analyst

10 Sep 2008

Growth in the fixed satellite market has maintained a healthy pace, driven significantly by digital entertainment and emerging markets, according to research and analyst firm Euroconsult.

In its latest satellite industry report and ten-year forecast, released Monday at a satellite conference in Paris, Euroconsult said that the fixed satellite sector grew in both transponder demand (+8%) and overall revenues of $8.9 billion (+9.5%) last year, with emerging satellite markets continuing to play an important role in this development.

Accelerated deployments of corporate networks, considerable needs for military communications and broadband access uptake have also contributed to growth, the report said.

Euroconsult managing director Pacôme Revillon said demand for satellite capacity for digital TV broadcasting accelerated swiftly last year, due to the addition of both standard and high definition TV channels.

"Capacity usage for TV services increased by 13%, with over 21,000 channels now broadcast by satellite," Revillon said in a statement. "Another important trend is new growth for telecom services, with sustained demand for corporate networks, government communications and cellular backhaul pushing the market."

The report also found that regional satellite operators were starting to give global players like SES, Intelsat, Eutelsat and Telesat a run for their money, particularly in emerging markets. Regional operators represented 31% of total market revenues in 2007, but generated 37% of net revenue growth for the industry, the report said.

Regional markets reporting double digit growth in 2007 include Russia & Central Asia (+20%), South Asia (+20%),Central Europe (+20%) and Sub Saharan Africa (+19%), Euroconsult said.

As for future trends, Euroconsult is projecting growth in all world regions in the next ten years, except possibly in Northeast Asia due to lower demand for telecom services.

Average growth of approximately 5% is expected in the next five years, after which may follow a progressive slowdown in several regions as analog transmissions are shut down. Increasing terrestrial competition and a potential new consolidation phase in the burgeoning digital TV market could also be factors in a slowdown.

In any case, Euroconsult says the market value of capacity used for the traditional FSS market will reach almost $12 billion in 2017, while wholesale revenues from emerging systems dedicated to satellite consumer broadband access could bring that figure to $14.4 billion.

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