Government and Military Market for Commercial Satellite Services will Remain Sustainable, According to Northern Sky Research
Market to Generate $7.8 Billion in Satellite Communications Revenue Through 2010
Northern Sky Research today released its newest market survey and forecast report: “Government and Military Demand on Commercial Satellites, 2nd Edition.” The report provides an in-depth overview of demand trends for commercial satellite communications services in each region over an eight-year period by tracking government and military needs, as well as trends in governmental program development, to address the apparent shortfall in internal bandwidth capabilities.
The report concludes that, from an estimated $580.2 million in satellite communications revenues for 2003, the market is expected to reach over $1.4 billion by 2010 yielding total revenues of close to $7.8 billion over an eight-year period. Satellite communications revenue growth continues to be driven largely by U.S. Military demand as the Pentagon’s bandwidth needs have increased substantially and will not be satisfied internally before 2020. Reliance on commercial bandwidth will therefore become an increasing component of military planning to include non-critical and mission-critical needs over time. In addition, continued presence in the Middle East region, as well as homeland security initiatives, should drive demand and sustain the market within the report’s forecast period.
“Although the War in Iraq, which provided a large surge in bandwidth demand has been completed, the U.S. decision to support democracy in the region, in addition to continuing the fight against terrorism, will ensure the continued generation of increasing revenue growth,” states Jose del Rosario, senior analyst of Northern Sky Research and author of the report.
In terms of procurement, U.S. government entities, specifically the U.S. Military, will continue to dominate contracting of satellite communications services, accounting for 89% of overall revenue streams. Non-U.S. and non-military procurement is expected to be a relatively small percentage of the overall market through 2010, led by VSAT services in Digital Divide program implementations. “The mainstay of the government market lies in military needs. Over the past 15 years, bandwidth surges have been benchmarked by the two wars in Iraq and operations in Afghanistan. Compared to other civil government applications, military usage and military readiness to address crisis situations will continue to remain the core of the government demand over time,” said del Rosario.
From a regional comparison in terms of actual usage of satellite services, the report forecasts that the Africa/Middle East will continue to dominate the market until 2010. War and peacekeeping efforts in this region should generate nearly half of cumulative revenues. U.S. Government homeland security programs and initiatives should propel North America to become the second largest regional market, accounting for 15% of overall revenues. Border patrols, the coordination of inter-agency operations, particularly in areas where terrestrial infrastructure is non-existent, should increase over time. Once again, readiness in addressing potential flashpoints within the United States should drive procurement of bandwidth capacity and satellite services from commercial entities over the long term.
“Government and Military Demand on Commercial Satellites, 2nd Edition” is a multi-client report now available from Northern Sky Research. For additional information on this report, including a full table of contents, list of figures and executive summary, please visit www.northernskyresearch.com or call Northern Sky Research at 407-352-5295.
Northern Sky Research is an international market research and consulting firm specializing in satellite technology and applications. Northern Sky Research primary areas of expertise include satellite technology, IP applications, and broadcast services. With extensive expertise in all regions and a number of broadband sectors, Northern Sky Research is a leading provider of in-depth market insight and analyses.
Contact:
Northern Sky Research
Ken Marini, 781-826-9484
kmarini@northernskyresearch.com
