September 8, 2016
According to the 23rd
edition of Euroconsult's report,
Satellite Communications &
Broadcasting Markets Survey,
due to be published later in
September, Euroconsult forecasts
that traffic carried over
satellite will reach close to
3.5 Tbps by 2025, with a 16%
CAGR over the ten-year period.
This corresponds to an upward
revision of our previous
forecasts, which also takes into
account the anticipated massive
increase in capacity supply over
the period. The leasing of
larger capacity volumes will
however be at the expense of
lower pricing, also in a context
of heightened competition and
falling fill rates. While
regional situations will remain
diverse, we estimate that the
global average capacity ARPU
could be halved when expressed
in MHz by 2025. This combination
of higher volumes and lower
pricing leads us to a capacity
market value that would stand at
around $14 billion by 2025
compared to $11 billion in 2015.
The last
year has confirmed the
transformational nature of the
satellite communication sector's
current development phase, with
the confirmed appeal of HTS for
several user segments through
the signing of capacity
contracts and the announcement
of broadband LEO constellation
projects, even if most are still
under development. Euroconsult
projects total HTS capacity
leased to more than triple in
the next five years, supported
by recently announced contracts
for entire HTS payloads or
beams.
In
addition, challenges from the
current macroeconomic
environment combine lower and
uncertain economic growth,
depressed pricing of oil and raw
materials, volatility in
exchange rates and political
instability in a number of
countries. Given these
circumstances, organizations
must react dynamically to
business opportunities as they
materialize.
"Current
business patterns correspond to
those of a breakthrough
innovation period," said Pacome
Revillon, CEO of Euroconsult and
editor of the report. "New and
more cost-effective solutions
open new opportunities, but also
result in oversupply and
challenge legacy satellite
services. To be sure, we must
realize that all announced
projects are not likely to come
to fruition, as this would
likely create a volume higher
than what the market will
support. However, this period
can change the competitive
standing of all organizations,
and each project shall be
considered according to its own
merits. Finally, strategies
pursued by organizations to
adapt their business offering
are quite diverse with an
increasing trend towards managed
services."
In that
context, capacity usage on the
FSS communications fleet
increased by 6% to around 380
GHz (or traffic by 10% to around
770 Gbps) in 2015. This included
1.7% growth in regular capacity
usage and significantly higher
growth in HTS capacity leased. A
recent market outperformer has
been mobility, now a separate
segment in our report, which
should represent over 10% of
total traffic by 2025.
Operators are likely to face a
period of low revenue growth due
to increasing price erosion and
possible temporary recession in
the case of adverse exchange
rates or macroeconomic
environment issues. This trend
will bring challenges on the
return on investment, especially
for new infrastructure projects.
