NSR’s Satellite Operator Financial Analysis (SOFA) 4th Edition finds that operational efficiency is more important than ever for satellite operators, with many taking a multi-pronged approach to increasing productivity. This trend is not limited to acquisitions, but also extends to HTS payloads being launched.
“We are seeing a fundamental transformation within the satellite telecommunications industry. Economies of scale the likes of which we have never seen, powered by not only M&A but also HTS payloads delivering previously unimagined throughput, will have an immense impact upon the financial dynamics of the industry moving forward,” states Blaine Curcio, Senior Analyst and report author. “The impetus is now on the Big Four to capitalise on their increased efficiencies—and on the regional players to further diversify their value propositions—without this combination, we will see a divergence between the haves and have-nots of the sector, and long-term, extensive consolidation,” adds Curcio.
An example of this phenomenon of huge potential for HTS payloads would be Avanti Communications, which is covered extensively in the report. Avanti currently has a fleet of 3 satellites plus 1 on order, and the company has publicly stated these satellites are capable of generating revenues of up to $700 million—this would make them the 5th largest operator in the world by revenue despite having only 3 dedicated satellites and ARTEMIS, an ESA-purposed satellite. Big revenues? Yes. Big fleet? Absolutely not.
Beyond this phenomenon, 2013 was an inflection point in terms of satellite operators. In recent years, NSR’s past SOFA analyses noted regional players seeing faster growth rates than the Big Four. 2013 changed that in a big way, with Eutelsat’s acquisition of Satmex leading the way for the Big Four to seeing nearly 5 per cent revenue growth, compared to nearly 4 per cent revenue decline for “everyone else”. The fastest growth was again seen by the top regional operators, with companies such as Arabsat, APT Satellite, and Avanti setting the pace. However, unlike 2012, two of the Big Four saw nearly 10 per cent growth rates, with SES and Eutelsat benefitting from currency fluctuations and Eutelsat’s acquisition of Satmex, and as such seeing their collective revenues increase by nearly $400 million in 2013.