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FSS Satellite Capacity Flatlines
While HTS Growth is in Full Swing
July 11, 2016
NSR’s Global
Satellite Capacity Supply & Demand, 13th Edition,
released today, finds a satellite industry in the midst of a
sea of change, with choppy waters threatening to overturn
operators sticking to the status quo. However, blue oceans
do offer billion-dollar opportunities for those able to
successfully change with the times. The widebeam capacity
and dozens of transponder-satellites of yesteryear face
enormous pricing pressures across a number of verticals,
with NSR forecasting widebeam revenues to drop by over $1.25
billion from 2015 to 2025. Alternatively, HTS capacity
creates a renaissance of sorts for the satellite industry,
with over $7 billion in new revenues paving a growth path
for operators able to pivot towards new business models and
new ways of selling capacity.
As macro factors, such as TV viewing habits, data
consumption, and Internet penetration in the developing
world change rapidly over the coming decade, the satellite
supply picture will change markedly. Satellite operators
will need to look to volume for growth, with
over 12 Terabits per second of
HTS capacity (GEO, MEO, and LEO)
to launch by 2025. While much of
this will be the proposed LEO-HTS constellations of next
decade, there will be
over 3 Tbps of GEO-HTS capacity
globally by 2025.
At a minimum, this
equates to triple the amount of traditional FSS capacity in
orbit today, and
depending on bits per hertz efficiencies, it could be even
more than that.
“The telecom industry as a whole has seen Moore’s Law
applied to the cost of data over the past 15 years.
Satellite, today, is not competitive in 99% of the telecom
market, but with HTS there is hope to address a much bigger
piece of the pie and, ultimately, operators must deploy HTS
or die,” notes Blaine Curcio, Senior Analyst and report lead
author. “With this in mind, our study forecasts price drops
in data verticals upwards of 60% by 2025, with this leading
to significant elasticity of demand across these
applications,” adds Curcio.
On the demand side,
nearly 4 Tbps of data/broadband
demand will be sold over satellite by 2025,
up from just over 250 Gbps today,
for a CAGR of over 30%.
Revenue growth will be more modest, but with
only a 17% CAGR boosting top-line
revenues from $1.9B to $9B to 2025.
“While revenues are expected to increase at a dramatic pace,
this is not the same industry as 10, or even just 5 years
ago. These new verticals offer big revenue potential,
relatively speaking, but the days of 80% EBITDA margins are
most likely gone, with operators seeing lower CAPEX through
launch/manufacturing advancements traded for higher OPEX, as
operators have much more capacity to sell, and need to get
much closer to the end customer to sell it,” notes Curcio.
“This will be a very complex balancing act—driving down
price points, pivoting towards new customers, launching
radically different types of capacity. There will
unquestionably be winners and losers, and likely less
operators playing the game as the industry sees
consolidation,” concludes Curcio.
The Global Satellite Capacity Supply & Demand, 13th
Edition study provides not only a wealth of data in the form
of tens of thousands of data points, but also the
qualitative, analytical discussion that adds comprehension
to the forecasts. NSR remains at the forefront of the
industry by providing the most thorough analysis of a market
that the company itself coined—HTS—and provides not just the
data, but also the business acumen and on-the-ground
knowledge that is the signature of NSR’s work.
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