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Evolving Competitive Environment for FSSOperators Forces Adaptation
February 6, 2018
According to
Euroconsult's newly-published report, FSS
Operators: Benchmarks & Performance Review,
the size of the FSS market has been
relatively stable over the last five years
($11.3B), but behind this total significant
changes have played out. The market share of
the top four operators has gradually eroded
to 60%, while three new companies (YahSat,
Thaicom and Insat) have joined the top ten.
Twelve new players have emerged in the past
five years including three in 2017 (BRI,
BulgariaSat and Telebras) for a total of 46
revenue-generating operators at year-end
2017. "The arrival of new players associated with the rapid expansion of supply and lower growth in demand has contributed to put pressure on FSS operators' business, with margins, fill rates and revenue per transponder all lower today than they were five years ago," said Dimitri Buchs, Senior Consultant at Euroconsult. "Transformation is expected to continue in the coming years, with new market dynamics (e.g. non-linear video services, managed services, connectivity anywhere and anytime) and evolutions in technology (e.g. NGSO constellations, terrestrial network expansion) significantly impacting the industry and the positioning of FSS operators, who will be forced to adapt their strategies in order to remain relevant in the future. The competitive environment is expected to become even more challenging in the coming years, as 11 new players are planning to enter the FSS GEO market by the early 2020s."
The current market environment combined with
expected competition is pushing industry
players to make strategic changes, not only
with regards to the types of satellites they
launch but also in terms of market
positioning and investments into new types
of projects. Foreseen changes will include
an increase in HTS payloads; the launch of
satellite assets with enhanced flexibility
in terms of coverage, power and bandwidth
allocation; the accelerated development of
new NGSO constellation projects; exploration
of new growth segments, such as mobility;
and a transition for operators from
wholesale bandwidth suppliers to managed
service providers to get closer to the
end-user and avoid depending only on
capacity wholesales revenues.
In other key findings from the report, 22 operators had revenues of more than $100 million, while 50% of all FSS operators increased the number of regular transponders leased through 2016. Thirteen operators had fill rates greater than 80%; fill rates decreased for two-thirds of operators. Finally, 19 operators distributed UHD channels in January 2018; SES and Eutelsat account for 60% of the total.
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