Satellite industry and economics

From INVESaTWIKI

Satellite industry and economics

State of the satellite industry

World satellite industry revenues

• The world satellite industry revenues have grown every year since observers began tracking the industry. Average annual growth during this time period is almost 13%.

• In 2004, the world satellite industry growth was about 7%, slightly higher than the 6% growth achieved in 2003 (see Figure 1).

• Revenues from Satellite Manufacturing, Satellite Services, and Ground Equipment segments increased in 2004, while the Launch segment continued to shrink.

• The Satellite Services segment share of total revenues has grown over the study period, increasing from 42% of the total in 1996 to over 60% in 2004 (see Figure 2).

Fig.1 World satellite industry revenues

Fig.2 World revenues by sector

Satellite services findings

• Subscription and Retail Services had the greatest growth of all industry segments in 2004, with an 11% growth rate.
  • Direct-to-Home TV services grew 10% and continued to drive overall growth.
  • Satellite Radio Services experienced over 200% revenue growth in 2004, although revenues continue to account for less than 1% of overall satellite service revenues.
    • By end-2004, XM and Sirius together had 4.4 million subscribers compared to 1.6 million the previous year. XM and Sirius revenues reached over $300 million collectively in 2004 compared to roughly $100 million in 2003.
  • DigitalGlobe and Orbimage each won contracts for up to $500 million over the next 4 years from NGA as part of the NextView program.
  • Transponder Leasing revenues dropped 4% in 2004, primarily due to continued declines in capacity pricing.

Fig.3 World satellite services revenues

Satellite manufacturing findings

• Global Satellite Manufacturing Revenues grew by 4% in 2004, while U.S. Satellite Manufacturing revenues dropped more than 15%. The decline was due to:
  • Reduced government spending
  • Lower number of overall orders in 2002

• In 2004, government payloads accounted for 72% of total payloads launched and 82% of total manufacturing revenues.

This is about the same as 2003, when government payloads accounted for 75% of total payloads and nearly 84% of total revenues.

• This trend is expected to continue for 2005, with government payloads contributing to the majority of launches and manufacturing revenues (see Figure 4).

Fig.4 Satellite manufacturing revenues

Launch industry findings

• In 2004, global Launch Industry revenues fell by almost 13% over 2003 and declined 24% over 2002 as a result of an overall drop in the number of launches.

• Of the total global launches in 2004, 53% were government and 47% were commercial. In 2000, 66% of total global launches were government and 34% were commercial.

• In 2004 the U.S. captured half of total launch revenues compared to 66% in 2003, due to fewer high-revenue (Titan IV) launches.

• In 2004 there were 17 new commercial GEO launch orders (7 for Ariane, 7 for ILS, 2 for Sea Launch, and 1 for Starsem) (see Figure 5 and 6).

Fig.5 Launch industry revenues

Fig.6 Global Supply vs. Demand. GEO Communications Satellites and Launches

Ground equipment findings

• Growth in the Ground Equipment sector was steady, growing by about 5% in 2004.

• Ground Equipment prices continue to decline and major infrastructure investments have been virtually flat.

• Despite declining prices for hardware, the number of units sold for end-user applications has been growing. Greatest revenue growth is in end-user equipment for DTH TV, high-speed Internet, satellite radio services, and mobile satellite services (see Figure 7). [1]

Fig.7 World ground equipment revenues

References

[1] Futron Corporation
"State Of The Satellite Industry Report", 2005