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Satellite provision: A market in transition

NSR’s Global Satellite Capacity Supply & Demand, 12th Edition report, observes a European satellite telecommunications market entering a period of dramatic transition.  As European satellite operators see opportunities for traditional FSS capacity expansion run out due to lack of spectrum, hundreds of millions of dollars of CAPEX are being invested into GEO-HTS payloads targeting hybrid and emerging applications that simply did not exist several years ago in Europe.

On the demand side, despite spectrum constraints, traditional FSS is seeing some growth, albeit in largely captive markets. “The video markets in Europe have actually been fairly resilient”, stated Blaine Curcio, Senior Analyst and report co-author. “We’ve seen interesting anecdotes – for instance, Sky Deutschland saw its best subscriber growth ever, in raw subscriber terms, in 2014 – that may go against some of the conventional wisdom about the state of the linear TV markets in developed countries”. Overall, traditional FSS transponder revenues for Europe will peak around 2019, but growth from TV markets will continue thereafter, with Distribution and DTH combining for nearly $3.5 billion in revenues by 2024.

The GEO-HTS market will offer more substantial growth opportunities, with GEO-HTS revenues across all frequency bands growing at a CAGR of over 23 per cent to reach $635 million in leasing revenues by 2024. Demand and subsequent revenues will be very diverse, with over 100 Gbps of demand for broadband, and over 10 Gbps of demand for Enterprise Data, Government/Military, and Commercial Mobility by 2024.

On the supply side, FSS widebeam in Europe is witnessing an East-West dichotomy. While most of the spectrum over Western Europe is utilized, Eastern Europe still has room for growth, although the bulk of supply is through operators either of Russian origin or targeting Russian demand. Ku-band continues to be a safe bet in this respect, while other frequency bands are almost non-existent among new missions. “We expect that about 500 transponders of widebeam supply will be added over the next decade”, stated Prashant Butani, Senior Analyst and report co-author. “Almost 60 per cent of this figure should come from Ku-band largely over Russian markets.”

GEO-HTS supply growth is far more dynamic, for the simple reason that both Enterprise Data and Broadband Access markets in the region still have untapped potential. Coupled with coverage from global HTS systems like EpicNG, the region will see about 450 Gbps of supply added over the next decade. The business model for the new GEO-HTS systems will be the key differentiator. “Purchasing power differs drastically, and demand may indeed be more Enterprise in the East as opposed to consumer in the West”, noted Butani.

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