Analyst Roger Rusch, CEO at TelAstra, says in a report that the commercial satellite industry is facing 6 different and worrying crises.
Rusch suggests that terrestrial growth from fibre and wireless is threatening future growth of the satellite sector, and this is his Crises Number 1. “The wireless and fibre providers are more agile at introducing new technology and expanding throughput into more remote regions. They provide service for much lower cost when available in urban regions.”
Worry Number 2 is the growth in satellite capacity. While this might be considered praiseworthy, Rusch says that in most cases the growth in capacity has been faster than the growth in demand. “Market forces set the stage for lower transmission prices. Satellites are more competitive, but total revenues have dropped for some.”
Crises Number 3 is that customer preferences have changed. Rusch says: “Cellular devices are infrequently used for voice telephone calls. Millions of people are abandoning broadcast television and prefer to extract programmes directly from the Internet.”
Number 4 says that diverse views on these “exciting developments” and related pricing shocks have caused some established [satellite] players to pause and reduce capital expenditure. “Fewer satellites are being procured for operation in Geostationary Earth Orbit (GEO). An astonishing array of Low Earth Orbit (LEO) constellations has been proposed with thousands of relatively smaller satellites. The merits and costs of these alternatives are being weighed. Established satellite operators are developing plans that attempt to select or straddle the best alternatives.”
Crises Number 5 states there are several new launch service providers. “Current providers are developing next generation launch vehicles to reduce launch costs. The enthusiasm for nanosatellites and LEO Constellations has produced the development of a number of new launch vehicles matched to the needs of small satellites. Users are weighing the risks and rewards of new launch services.”
Number 6 talks about the high cost of user terminals for new satellite solutions. “In the case of LEO constellations, there is a desire for inexpensive electronic satellite-tracking user terminals. Tracking antennas are also needed for terminals on ships and aircraft even when connecting to GEO satellites.”