8.3 Satellite market
The highest growth in satellite industry has been in telecommunication area as a result of much needed services, which started with telephone and fax and expanded to provide television distribution, Internet access, wireless and other services. Now hundreds of satellites are in various orbits for the sole purpose of providing these services. These services have contributed to significant social and economic changes nationally and internationally. The advancement in technology and hence satellites capabilities will continue to impact us in ways that never seen before.
Every year the Satellite Industry Association (SIA) and the Futron Corporation compile and report the satellite industry's annual revenues. The report is based on an extensive survey of the commercial satellite industry supplemented by research and analysis of industry trends and publicly available data. The report covers satellite manufacturing, launch services, satellite services, and ground equipment manufacturing. According to the SIA latest report in June 2006, the global commercial satellite industry generated some $88.8 billion in revenue in 2005, an increase of 7.4 percent over 2004 industry-wide revenues, higher than the average growth from 2000 to 2005.
The following graph also demonstrates the changes in percentage for different sectors of satellite industry from 2000 to 2005. As it shows in 2005, launch revenues grew, an improvement from 2003-2004 when revenues decreased almost 13%. Satellite manufacturing was the only sector that experienced a decline over 2004. Satellite services segment share of total revenues has grown to comprise over half of total revenues, increasing from 45% of the total in 2000 to 53.6% in 2003 to nearly 60% in 2005.
At the 2006 ISCE Conference, SIA Executive Director, David Cavossa, noted that: “After a few difficult years, the satellite industry has begun its rebound fueled by new technologies and applications in the mobile satellite sector and consumer applications such as HD television and satellite radio.” Cavossa also commented that: “This growth is expected to continue, driven as well by growing government demand for continuity of communications and the renewed interest by financial markets to invest in satellite companies.” Satellite industry revenues were led again in 2005 by the satellite services sector, which has grown to over $52 billion, and now accounts for nearly 60% of total industry revenues, increasing from 45% of the total in 2000 and 53.6% in 2003. Once again satellite services were dominated by Direct-To-Home (DTH) television services, which accounted for $41.3 billion, more than half the entire industry’s revenues.
According to the survey, global satellite manufacturing revenues, at $7.8 billion in 2005, declined overall some 24% from 2004, largely as the result of lower government contract revenues. In 2005, government payloads accounted for 71% of total manufacturing revenues, vs. 82% in 2004. U.S. satellite manufacturing revenues were $3.2 billion, or 41% of the total, which is a dramatic reduction from 2000 when U.S. revenues were $6 billion and 51% of the global total. Revenues for satellite manufacturing and launch services are booked upon launch, not at the awarding of a contract.
Overall launch industry revenues increased 7% in 2005, up to $3 billion, of which 50% was attributed to U.S. launch companies. The proportion of government versus commercial contracts for launches continues to shift as well, although not in sync with satellite manufacturing. Commercial customers represented 46% of the 2005 commercial launches, while government customers represented 54%; in 2004 these numbers were 37% and 63%, respectively.
Driven largely by new technologies and capabilities in key consumer services such as DTH and satellite radio, the satellite ground equipment sector grew 11% in 2005, accounting for $25.2 billion in revenue. This sector is expected to continue to grow with the increased demand for new equipment to meet demand for innovative services such as mobile defense and emergency management applications.
For more information on the overall satellite market, go to the Satellite Industry Association website (http://www.sia.org) and click on "SIA State of Satellite Industry Report".