Satellite Industry Indicators Survey

“State Of The Satellite Industry” Report
June 2005
Sponsored by the
Prepared by Futron Corporation
1
Satellite Industry Overview
Satellite Manufacturing
•Satellite Manufacturing
•Component and Subsystem
Manufacturing
Satellite Services
•DBS/DARS
•Fixed Satellite Services
•Voice, Video, Data
•VSATs
•Remote Sensing
•Transponder Leasing
•Mobile Satellite Services
•Mobile Telephony
•Data/Messaging
Ground Equipment
• Mobile Terminals
• Gateways
• Control Stations
• VSATs & USATs
• DBS Dishes
• Handheld Phones
• DARS Equipment
Launch Industry
•Launch Services
•Vehicle Manufacturing
•Component and
Subsystem Manufacturing
2
World Satellite Industry Revenues
$97.2
$78.6
$86.1
$91.1
$73.1
$60.4
$49.1
$55.0
$38.0
Rate of change
29.3%
12.1%
9.7%
21.1%
7.5%
9.6%
5.8%
6.7%
3
World Satellite Services Revenue
$60.9
$56.0
$49.1
$46.5
$38.6
$29.7
$21.1
$ 24.4
$15.8
FSS $
MSS $
DBS $
6.1
0.7
9.0
$ 6.8
$ 0.8
$ 13.5
$ 7.3
$ 1.0
$ 16.1
$ 8.6
$ 1.3
$ 19.8
$ 9.2
$ 1.5
$ 27.9
$ 8.9
$ 1.4
$ 36.2
$
$
$
8.7
1.3
39.1
$ 9.7
$ 1.7
$ 44.7
$ 9.4
$ 2.0
$ 49.5
FSS=VSAT services, remote sensing, and transponder leasing
MSS=Mobile telephone and mobile data
DBS/DARS=DTH TV, DARS, and Broadband
4
Satellite Manufacturing Revenues
N.B. – Satellite Manufacturing revenues are recorded in the year the satellite is delivered/launched,
not when contract is awarded
5
Launch Industry Revenues
N.B. - Launch Industry revenues are recorded in the year the launch occurs,
not when contract is awarded.
6
Global Supply vs. Demand
GEO Communications Satellites and Launches
70
Number of Satellites/Launches
60
50
40
35
31
28
30
20
24 25
17 18
20
21 22
20
22
21
20
19
13
12
10
15
13
7
0
1995
1996
1997
1998
1999
Launches
Satellite Capacity
2000
2001
2002
2003
2004
Satellites Ordered
Launch Capacity
7
World Ground Equipment Revenues
$19.6
$21.2
$22.1
$23.3
$17.7
$13.9
$16.0
$12.5
$9.7
Includes: Gateways, NOCs, Satellite News Gathering equipment, flyaways,
VSATs, DBS Dishes, DARS equipment, satellite phone booths, satellite phones
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Industry Analysis
• In 2004, the global satellite industry continued to grow, due to
the strength of the Satellite Services sector.
• Government communications spending and strong consumer
demand for video services were the key drivers of this growth,
with deployment of new user applications and equipment in both
markets.
• Despite falling prices and profit margins in most sectors, several
trends indicate growth for the satellite industry over the next few
years:
– HDTV and the opening of new and competitive consumer video markets
around the world
– Continued strength in Government/Military spending
– Revival of satellite manufacturing orders
9
Satellite Technology Trends
• Satellites are becoming more sophisticated, more
efficient, higher power -- creating highly capable
“super- computers-in-the-sky”
• Today satellite systems are more efficient than ever
before:
• Smaller dishes allow for more users;
• Higher power allows for more applications;
• Higher order modulation schemes allow for more
data throughput (i.e. reduced costs);
• Spot beams allow for frequency reuse;
10
Emerging Services/Applications
Broadband Connectivity to Homes/Offices
• Hughes Network Systems – Direcway / Spaceway
• Americom-to-Home
• WildBlue
Mobile Broadband Services “Comms on the Move”
• In-motion: Transmit and Receive on-the-go
– Multi-Mb inbound to vehicle, up to 500kbs+ out
– Valuable for Network Centric Operations
Consumer Focused Satellite Services
• Ancillary Terrestrial Component (ATC)
• Satellite Radio
Broadband Connectivity to Aircraft
• Forward link: 10 Mbps
• Return link: 128 - 512 Kbps
• E-mail/Internet access
11
Satellites Are Critical Infrastructure
Early 2003 – GAO Report re: Commercial Satellite Infrastructure
“Commercial Satellite Security Should Be More Fully Addressed”
January 2003 – Homeland Security Act
“Satellite Communications Infrastructure Is Critical National
Infrastructure”
May 2004 – NSTAC Satellite Task Force Report to President
“Commercial Satellite Industry Is Critical To Our National, Economic,
and Homeland Security”
December 2004 – Satcom Policy Memo and Action Plan from OSD/NII
“DoD Must Build Commercial SATCOM Into The Wideband Milsatcom
Architecture”
Early 2005 – National Security Space Policy TBD
12
DoD Use Of Satcom
• Since 9/11/01 the DoD has become our single largest
customer
• FY 2004 FSS Airtime ~ $350M
• FY 2004 MSS Airtime ~ $175M
• FY 2004 Commercial SATCOM Equipment ~ $200M
• Forecasts predict that by 2010 Demand could exceed
Supply by ~ 12 Gbps
• Commercial satellite industry has gone from
“augmentation resources” to “strategic partners” for
USG Agencies and the DoD
13
Current DoD Commercial Satcom Procurement
Global
Satellite
Operators
DSTS-G
Contractors
Global DoD
Satellite Communications
Requirements
D
I
S
A
Requirements
Turn Key
Requirements
Space Segment
14
Multi-Year Support From Hill
• Language in HASC Reported H.R. 1815 - National Defense Authorization
Act of 2006
Commercial communications bandwidth
The committee recognizes the important contribution commercial
satellite communications systems provide to military operations. The
need for commercial bandwidth to supplement military systems will
remain a requirement into the future. As a result, the committee
believes a long-term commitment to the appropriate use of commercial
satellite communications capacity is in the U.S. government's best
interest. The committee believes a multi-year procurement strategy with
the use of annual contract options would provide sufficient commitment
to industry and provide the government ample flexibility to terminate
work as necessary. The committee recommends use of this alternative to
procure commercial bandwidth to support military operations for those
cases where it is the most efficient and effective procurement method.
15
Problems With U.S. Export Controls
• Lack of Transparency and Predictability
– Increase costs and delays
• Widely Available Technologies
– Deny high-tech industries in the U.S. a level playing field
• Lack of Tiered System
– Allies are examined under the same scrutiny as rogue states
• Extra-Territorial Reach On Components
– Foreign manufacturers wary of U.S. components
• Lack of Understanding
– Commercial Communications Satellites Differ from Military/ Scientific/
Civil Satellites and Launch Vehicles
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Satellite Business Factors
Satellite Services
Lower Transponder Rates
Higher Insurance Costs
Industry Consolidation
Export Controls
DBS/DARS
Access To Adequate Spectrum
Competition With Terrestrial “Giants”
Satellite Manufacturing/Launch
Overcapacity
Export Controls
Ground Equipment
Interference with Terrestrial/Unlicensed Devices
Foreign Licensing/Market Access
17