The worldwide demand for C- and Ku-band Satellite Transponders is projected to reach 7,840 36-MHz TPEs (Transponder Equivalents) by the year 2017, driven by rapidly expanding DTH, digital TV, UAV communications, consumer broadband and 3D markets and increased governmental expenditure on military satellite navigation, positioning systems, and space exploration, according to market research firm Global Industry Analysts (GIA).
The firm suggests in its report – Satellite Transponders: A Global Strategic Business Report – that despite being volatile in nature to an extent, the satellite industry, with its solid base, is slated to have strong growth potential, considering the fact that it forms an essential element in meeting major telecommunications service requirements. Technological advancements during the last few years greatly enhanced the compression technology. Enhanced compression technologies and digitalization have resulted in transmission of more content on each transponder, thereby restraining transponder demand. However, the boom in demand for digital satellite television and HDTV transmission has more than offset the restraining effect of digitalisation. Consumer services, including last-mile broadband and DTH are expecteed to expand at a higher growth rate than infrastructure services, including ISP-to-backbone and trunk telephony services.
According to GIA, the global satellite transponder demand has remained buoyant despite the economic woes engulfing the world. Growing popularity of satellite TV, particularly in the developing countries, is the primary growth driver, and is supported by the introduction of high definition (HD) and other such bandwidth demanding applications. Emergence of higher bandwidth consuming 3D channels, with an average 40 per cent to 50 per cent higher capacity requirement is likely to provide a new thrust to the satellite transponder market. Market would also be driven by increasing demand for transponders from communications services sector, especially cellular backhaul, government communications and corporate communications. Apart from the aforementioned factors, other catalysts for demand growth include direct radio, consumer broadband Internet services, data services and mobile telephony.
The Asia Pacific region continues to remain the largest regional market. Despite the gloomy economic conditions prevalent across the world, the Asia-Pacific satellite industry remains buoyant with transponder leasing revenues exhibiting an upward trend. Transponder utilisation continues to rise, maintaining the momentum from the last five years. Intercontinental video transmissions and DTH TV, the primary growth drivers for the commercial communications satellite market, continue to record impressive growth rates owing to low penetration of pay TV across most of the region and the emergence of TV as a low-cost entertainment provider.
GIA notes that DTH services in the region vary from country to country, mainly down to widespread cultural diversity. The scenario necessitates domestic satellite operators to present customers with more regional TV channels. Investors and media companies from the developed world such as Western Europe and North America are thronging to the Asian market due to stagnant domestic demand.
GIA suggests that in addition to television broadcasting, mobile telephony is also stimulating growth in the satellite market, with satellites being the most important link in transmission of voice as well as data across regions. Middle East and Africa are expected to grow at a CAGR of 6.35 per cent over the analysis period. The market for Broadcast Applications is the largest end-use segment. Trunking and enterprise networks markets have been resilient to the global financial meltdown. Trunking Applications represents the fastest growing end-use segment with a CAGR of five per cent over the analysis period, driven by introduction of new dedicated capacity.