Strong Growth Ahead for Latin American Market
April 29, 2015
According to
Euroconsult's latest report, Satellite
Communications & Broadcasting in Latin America,
total satellite capacity usage increased at an
8% CAGR over 2009-2014, driven by growing
requirements for satellite pay-TV (+1,600
channels), VSAT services (+50,000 VSATs),
trunking and backhaul. Euroconsult projects
total capacity leased to grow at a 10% CAGR over
the next decade, translating to a total of over
330 Gbps of traffic flowing over satellite by
2024.
Following strong
growth in demand, operators have invested
heavily in expansion satellites causing total
regular capacity supply in Latin America to
double by 2017 (from 2010 levels), while HTS
capacity will increase eight-fold to over 370
Gbps by 2017.
"As supply additions
are projected to outpace growth in demand, the
average regular capacity fill rate should
decrease from 80% in 2014 to 70% in 2017," said
Nathan de Ruiter, Senior Consultant at
Euroconsult and editor of the report. "The trend
of falling fill rates is most profound in
Ku-band, where utilization levels are dropping
from 86% in 2010 to an expected 64% by 2017,
causing serious concerns for oversupply." The
risk of a temporary situation of oversupply is
anticipated to place strong downward pressure on
Ku-band capacity prices in the next three
years.
Several fundamentals
are supporting a strong increase in the future
use of satellite communication services:
-
The rising number of TV channels distributed
over satellite with leading satellite pay-TV
operators in the region diversifying into
new geographic markets and the emergence of
new platforms
- Latin America
should maintain its leading role in USO
programs that include satellite connectivity
solutions for rural regions
- The availability of
HTS capacity and roll-out of cost-effective
services should drive consumer broadband in
populated countries such as Brazil
- The increasing use
of high bandwidth applications such as video
streaming and cloud services should drive
the capacity requirements in energy (oil &
gas, mining) and corporate networks segments
- Mobile penetration
keeps increasing along with the expansion of
3G and potentially 4G/LTE networks, which
will create new market opportunities for
cellular backhaul over satellite
Although demand is relatively equally
distributed across the three sub-regions
(Central America, Mexico, Caribbean; Brazil;
Rest of South America), the two largest
countries, Mexico and Brazil, are projected to
represent more than half of total capacity
demand by 2024. In the short to medium term,
market growth will be hampered by the economic
slowdown that should limit the progress of the
middle class and may potentially cause
instability or delays to government programs and
funding. Furthermore, the analog switch-off
process will somewhat temper the capacity
additions from 2018 until 2022.
