A study from Northern Sky Research (NSR) states that annual revenues per leased FSS transponder among the 22 operators tracked in NSR’s latest report declined from $2.05 million to $1.94 million during the past year, with pricing pressures coming to fruition through a combination of currency exchange rate fluctuations (for example, JSAT’s typical rental fell from $4.8 million to $3.4 million, partially due to Yen depreciation) and lower pricing in general. “That said, the question of ‘will GEO-HTS grow the pie as much as it shrinks the cost per slice?’ has thus far yielded an answer of yes, with the industry again having seen more or less flat revenue growth in a year that saw shorter-term macroeconomic headwinds, such as reduced government spending,” suggests NSR.

NSR’s study looks at the health and revenue prospects of 22 operators, and says the past 18 months saw some degree of shake-up among operators, with currency exchange rates and varying degrees of exposure to contracting markets such as Gov/Mil causing some movement among top operators.

“Notable, SES overtook Intelsat in terms of top-line revenues in 2014, with the former’s revenues of $2.562 billion besting the latter’s $2.472 billion. The two operators traded places again in H1 2015, with Euro depreciation negatively impacting SES’s dollar-denominated revenues, which fell to just under $1.1 billion, well behind Intelsat’s $1.2 billion. The two operators have in recent years been on different trajectories, with Intelsat hurting from exposure to US Government clients, and SES weathering this storm more effectively due to a somewhat less US-centric customer base,” says NSR.

“Other operators reporting swings in revenues included Sky Perfect JSAT, which saw a 15 per cent drop in Yen-denominated revenues correspond to a 26.7 per cent drop in dollar-denominated revenues, due to a weakening Yen, which has more likely than not bottomed out vis-à-vis the USD. YahSat, Thaicom, and Avanti—all of whom rely on GEO-HTS payloads for a significant per centage of revenues—saw healthy revenue growth across the board. This lends further credence to the idea that GEO-HTS will propel future industry growth. Overall, the industry saw flat revenues in 2014, with total revenues from the top 25 FSS operators remaining around $11.6 billion.”

“Overall,” says NSR, “it is expected that moving forward, operators will need to make up for a fall in prices by leasing significantly more capacity, which will become feasible through a continued preference for GEO-HTS systems. Traditional FSS will remain relevant for point-to-multipoint communications (i.e. DTH), but overall there remains limited reason for a new data-type customer to choose FSS over GEO-HTS in many, but not all, instances.”

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