November 4, 2008

Mobile Satellite Services Sector Enters Heavy Launch Phase Amidst Financial and Economic Uncertainty

NSR today released its newest market survey and forecast report: "Mobile Satellite Services, 4th Edition," which provides the industry's most in-depth analysis of supply and demand trends for the mobile satellite services (MSS) market today. The report covers eight global regions for MSS equipment and services, as well as transponder demand for satellite handhelds, narrowband and broadband solutions, mobile satellite TV, and MSS-ATC/CGC for the period 2006-2017.

"The next ten years will rival the heydays of the late 1990s for the MSS industry with the launch of up to 160 MSS satellites," stated Claude Rousseau, Senior Analyst for NSR and author of the report. "That total does not count the number of FSS transponders in C-, Ku- and X-band that will also be available to the mobile satellite market. However, despite positive launch and supply trends, the stakes have never been so high given the turbulence in global financial and economic markets, which may affect demand."

After a difficult year, which saw the handheld market shaken by the woes of one operator, and delays in satellite launches of another two operators, the competition has increased greatly in satellite data services, which will face-off against many terrestrial wireless products. But through the introduction of new broadband satellite services, improved voice and data products and dual-mode 3G and 4G satellite-terrestrial handheld devices, NSR forecasts the MSS market will reach more than 18 million in-service units and generate retail revenue of $17.1 billion for the period 2006-2017.

As construction of new MSS satellites concludes a heavy manufacturing cycle over the next six years, operators will be busy figuring out how to best distribute and sell new equipment and services in the traditional as well as new volume-oriented and consumer-driven mobile communications markets. The current base of users primarily uses narrowband products, such as handhelds and data modems. The data via mobile satellite market is showing spectacular growth in many aeronautical, land-mobile and maritime applications.

In the coming years, the MSS business will be driven by better global coverage, convergence of media, IP-based communications and lower cost per bit as it reaches a wider set of end-user markets. The new, more powerful and capable next-generation constellations, MSS-ATC satellites and European CGC spacecraft to be launched in the next five years confirm that the demand for broadband mobile solutions is powering the market. It will drive new products and services such as Internet connectivity to airplanes, satellite SmartPhones, integration with wireless access networks, and mobile video/data applications.

However, the current credit crisis compounds the overhang on finances which, for many MSS operators, is reaching critical levels as they seek to fund the ground and space infrastructure for new services launch. As a partial answer, operators are moving down the value-chain by acquiring pieces of their distribution network to reap higher retail margins. But in the end, the long-overdue horizontal consolidation of operators is likely to provide more durable solutions to solve the economics of a promising MSS business. The hope is that MSS operators should come out of this process healthier with lower debt ratios, expanded product suites and leaner capital requirements in time for lift-off.

About the Report

"Mobile Satellite Services, 4th Edition" is a multi-client report now available from NSR. For additional information on this report, including a full table of contents, list of figures and executive summary, please visit or call NSR at 617-576-5771.

About NSR

Northern Sky Research (NSR) is an international market research and consulting firm specializing in satellite and wireless technology and applications. NSR primary areas of expertise include satellite technology, IP applications, wireless convergence and broadcast services. With extensive expertise in all regions and a number of broadband sectors, NSR is a leading provider of in-depth market insight and analyses.