High-Throughput Satellites Causing Industry Capacity Oversupply, S&P Warns

Satellite operators embracing high-throughput satellites (HTS) also are potentially jeopardizing the steady revenue and profit growth they enjoy from traditional fixed satellite services, S&P Global Ratings said in a news release Tuesday. S&P said satellite operators need to pursue HTS to remain competitive with fiber alternatives, but HTS will lead to a capacity oversupply that will depress pricing and that growth in the nautical and aviation markets likely isn't enough to offset. The ratings firm said growing capacity supply is leading to dropping revenue backlogs and transponder utilization rates. It said ratings on satellite companies with particular business concentrations in traditional voice and data services could be pressured for three to five years.