The satellite industry as a whole is rebounding, driven by new technologies and applications in the mobile satellite services space, plus consumer applications such as high definition television and satellite radio, according to the Satellite Industry Association, which recently reported revenue figures for 2005.
The global, commercial satellite industry generated $88.8 billion in revenues in 2005, a 7.4-percent increase over 2004. The satellite services slice of the pie, which includes mobile satellite services, has shown steady growth over the past five years-$52 billion in 2005, up 13 percent over 2004-while ground equipment, including satellite phones, has remained steady. The dead weight includes the satellite manufacturing and launch industry, which have shrunk.
The MSS sector-of greatest interest to those in the wireless industry-held steady at about $1.7 billion in revenues for the year, roughly in line with the $1.8 billion reported for 2004. According to Futron Corp., which compiled the report, the apparent decline is due more to rounding of the numbers to a single decimal point than to a substantive decline.
Behind the steady numbers for MSS, satellite-based voice revenue decreased, primarily due to United States government cutbacks on voice service in Iraq and Afghanistan as the U.S. implemented long-term data solutions for its communications needs, while satellite-based data revenue increased-the result was a wash for overall MSS revenue.
According to Andrea Maleter, technical director at Futron Corp., London-based Inmarsat plc and United Arab Emirates-based Thuraya Satellite Communications-both providing voice services in Iraq-reported declines in voice usage over the past two years. As Inmarsat’s BGAN service launched last year and it ended its lease agreement with Thuraya, essentially riding on Thuraya’s satellite coverage of Southwest Asia, the Middle East, North and Central Africa and Europe, Thuraya reported a decline in voice revenue.
Missing from the numbers, due to difficulty in compiling accurate data, is the revenue generated from the sale of satellite phones. Because of the large number of handset resellers in the market, that revenue is widely dispersed and difficult to accurately quantify, according to Maleter.
Growth in the MSS sector is expected to be driven by continued U.S. government demand for continuity of communications in war zones and in natural disaster areas. Also, partnerships, bundled offerings with terrestrial telecommunication companies, new spectrum allocations that enable ancillary terrestrial component, and satellite backhaul capabilities for mobile networks in developing countries where it’s less expensive than traditional, terrestrial backhaul technologies will also drive growth.
Demand for new MSS is also driving new, more innovative satellite designs that enable higher-bandwidth mobile services, particularly by the U.S. Department of Defense-which seeks data capabilities of greater than one megabit per second at greater than 50 miles per hour-and for enterprise applications such as mobile broadband services for shipping and trucking companies with fleets that need to communicate while in motion.
New spectrum allocations that enable ATC may push companies such as Mobile Satellite Ventures to partner with tower companies or with wireless service providers to build out the terrestrial component of an ATC satellite and land-based system.
“There’ve been rumors floating around for months that MSV, once it got its ATC spectrum, might partner up with Cingular [Wireless L.L.C.] or Verizon [Wireless],” Maleter said. “But I haven’t heard anything in a while. Interestingly, what I have heard is that MSV and ICO [Communications] have been hiring Nextel [Communications Inc.] people who didn’t end up at Sprint [Nextel Corp.] after the [Sprint/Nextel] merger. So they have been hiring some high-level people from the terrestrial wireless world. That’s a very strong message when the satellite people have left and the terrestrial wireless people have come in.”
