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September 30,
2014
NSR's Satellite Operator Financial
Analysis (SOFA), 4th Edition, published
today, finds that operational efficiency is
more important than ever for satellite
operators, with many taking a multi-pronged
approach to increasing productivity. This
trend is not limited to acquisitions, but
also extends to HTS payloads being launched.
"We are seeing a fundamental
transformation within the satellite
telecommunications industry. Economies of
scale the likes of which we have never seen,
powered by not only M&A but also HTS
payloads delivering previously unimagined
throughput, will have an immense impact upon
the financial dynamics of the industry
moving forward," states Blaine Curcio,
Senior Analyst and report author. "The
impetus is now on the Big Four to capitalize
on their increased efficiencies, and on the
regional players to further diversify their
value propositions without this combination,
we will see a divergence between the haves
and have-nots of the sector, and long-term,
extensive consolidation," adds Curcio.
An example of this phenomenon of huge
potential for HTS payloads would be Avanti
Communications, which is covered extensively
in the report. Avanti currently has a fleet
of 3 satellites plus 1 on order, and the
company has publicly stated these satellites
are capable of generating revenues of up to
$700M�this would make them the 5th largest
operator in the world by revenue despite
having only 3 dedicated satellites and
ARTEMIS, an ESA-purposed satellite. Big
revenues? Yes. Big fleet? Absolutely not.
Beyond this phenomenon, 2013 was an
inflection point in terms of satellite
operators. In recent years, NSR's past SOFA
analyses noted regional players seeing
faster growth rates than the Big Four. 2013
changed that in a big way, with Eutelsat's
acquisition of Satmex leading the way for
the Big Four to seeing nearly 5% revenue
growth, compared to nearly 4% revenue
decline for everyone else. The fastest
growth was again seen by the top regional
operators, with companies such as Arabsat,
APT Satellite, and Avanti setting the pace.
However, unlike 2012, two of the Big Four
saw nearly 10% growth rates, with SES and
Eutelsat benefitting from currency
fluctuations and Eutelsat's acquisition of
Satmex, and as such seeing their collective
revenues increase by nearly $400M in 2013.
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