August 10, 2005

World Space Market Seen at $158 Billion by 2010

WASHINGTON (Reuters) -- The slump in the global space and satellite market is over, and government and commercial sales should reach $158 billion by 2010, up from $103 billion in 2004, according to a report released on Tuesday.

"Now is a good time to be involved in the space and satellite industry," concluded the annual report compiled by the International Space Business Council, an independent consulting group based in Bethesda, Maryland.

"Government funding for space is on the rise, commercial orders for satellites and launches have rebounded and stabilized, new exploration initiatives are being pursued and entrepreneurial efforts related to radio, broadband and space tourism are generating excitement," it said.

The report, compiled each year since 1997, said governments and businesses around the world spent more than $18 billion a year on development of space systems, and India and China had joined the United States, Europe, Russia and Japan with fully independent capabilities.

U.S. defense spending on space alone grew to $22 billion in 2004 from $15 billion in 2000, and was forecast to reach $28 billion by 2010, it said.

Other factors behind the market's reemerging strength were the $40 billion satellite-to-consumer television market, strong and growing demand for satellite radio and Global Positioning Satellite and tracking capabilities, it said.

Marco Caceres, a satellite analyst for the Virginia-based Teal Group, cautioned that the ISBC study encompassed a very broad array of services associated with satellites and space, including government research and development and ground equipment.

He said the narrower market for satellite manufacturing and launch services reached a low point last year, with just 55 launches, the lowest level recorded since the early 1960s.

"If you ask me if that was rock bottom, I'd say 'probably,"' Caceres said. "It's hard for me to imagine that it's going to go down anymore."

But he cautioned that the market had been waiting vainly for an upturn for several years.

In terms of the larger market noted by the ISBC, including direct TV, Caceres said it was clear China and India would dramatically increase spending over the coming years.

He said President Bush's stated goal of resuming U.S. space flight to the moon, and onward to Mars, would also boost spending on space-related equipment and services.

"There was a tremendous overcapacity in the market a few years ago, but that's not the case anymore," he said.