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Euroconsult: FSS operators explore new strategies in evolving market

November 20, 2019

In its latest research, Euroconsult shows that 11 new FSS (fixed-satellite service) providers have emerged over the last five years including two in 2018. Many of these companies are state-owned national operators, which will mostly serve national interests.

Twelve new satellite operators are planning to enter the FSS geostationary (GEO) market by the early to mid 2020s, including companies targeting national market such as NepalSat, and Royal Group of Cambodia. Included in these twelve operators, are three with plans for small GEO satellites, which may indicate a new trend in the FSS industry facilitated in part by digital payloads, electric propulsion, and lower launch costs.

The research, enitled FSS Operators: Benchmarks & Performance Review, demonstrates that the market structure of the FSS industry remains concentrated at the top with growing fragmentation at the bottom. The top four operators (SES, Intelsat, Eutelsat and Telesat) today represent approximately 60 per cent of the industry’s revenue, a share that has decreased in recent years. Five years ago, they combined for 64 per cent of total revenue. The landscape behind the top five is rapidly evolving with three new companies joining the top ten in the past five years. These include YahSat, China Satcom, and ISRO.

“Our analysis shows that FSS operators are exploring new strategies to address the evolving market,” said Dimitri Buchs, Senior Consultant at Euroconsult and editor of the report. “We noted that several satellite operators are transitioning from sole wholesale bandwidth suppliers to managed services providers. This helps them increase the value they bring to their customers and minimise commodity pricing. Some satellite operators, such as SES, are even pushing towards end-to-end network solutions for selected markets and/or customers.”

To meet data-driven market demand, the survey reports that many FSS operators are shifting their investments from traditional satellites to High Throughput Satellites (HTS).  The number of FSS operators with an HTS payload doubled between 2014 and 2019, growing from 12 to 24 with the total HTS supply expected to reach more than two terabits per second by the end of 2019.

Market forces continue to impact the FSS industry in 2019. In 2014 at the market peak, the overall size of the industry reached $12.3 billion. In 2018, the industry had an overall size of $11.5 billion, with revenues down 0.4 percent year-over-year.

“Our forecast is for FSS revenues to continue their downward trend in 2019,” said Buchs. “However, despite the overall environment, the market structure of the FSS industry has remained relatively stable, with the four top operators dominating the market. New growth segments, led by in-flight connectivity, maritime connectivity, and general broadband access, continue to drive demand for HTS capacity, and global interest in universal broadband access offers significant upside potential.”

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