Mass Market Access, Continued HD Needs will Drive Satellite Market, Say Executives

COLORADO SPRINGS, Colo. -- Satellite executives see broadband, access to the mass market, and the blurring of civil, military, and commercial services as the source of future growth in the industry, they said at the National Space Symposium. The executives, from different parts of the satellite industry, spoke on a panel about emerging applications.

Space Station/Loral President John Celli expects direct-to-user growth to drive broader expansion. Getting HD into places in the world where it isn’t available is still worthwhile, he said. 3D technology is another possible source of new revenue because it could push the need for new capacity, though not nearly as much as HD has, he said. Earth imaging remains extremely important and the company will keep a close eye on the Cisco router aboard the Loral-built Intelsat 14, he said. Celli also extolled the national credit agencies that have helped companies borrow in a tough market. It has been good for the industry, and newcomers in particular, he said. But he’s concerned that companies could become too reliant on the agencies, and the U.S. Import-Export Bank and Coface of France should be careful to add their support only “where absolutely needed,” he said.

A much more systems-based approach that values the whole rather than individual pieces of a communications network looks to be the next revenue builder for satellite companies, said Astrium CEO Colin Paynter. Future service providers won’t be as focused on the satellite or ground components and will be moving “from just providing satellites to providing solutions in their domain,” he said. The difference between commercial, military and civil service will become less clear as assets are used for different offerings, he said. A squeeze on research and development resources in the U.K. may still hurt sales for satellite companies as they still largely rely on space agencies and the military for their steady investment, he said. Paynter said he expects governments to increasingly use hosted payloads as way to put their payloads into orbit, but the right financial balance will have to be struck before governments and companies feel comfortable with the process. Once the balance is set, “we will see more reasonable deals for hosted payloads,” he said. “To me, it’s a way of moving new applications with limited risks.”

The huge amount of prebooking aboard O3b’s initial eight-satellite constellation, scheduled to begin service in 2012, shows the appetite for broadband capacity around the world, said Brian Holz, O3b’s chief technology officer. A broad range of product capability without huge capital investment will be needed for future success as O3b customers develop new networks, he said.

Fixed and mobile broadband services that enable access to mass markets will be the largest source of growth, said Dara Panahy, a partner at Milbank, Tweed in Washington. Continued government demand for bandwidth throughout the chain will also help drive the industry, he said. Spectrum scarcity in the U.S. and abroad will pose major legal challenges. Variations in regulation and transparency make international coordination difficult, he said.