CALIFORNIA: Amidst unfavourable economic conditions and the melt down in the telecommunications industry, the satellite transponder capacity leasing market in Europe, the Middle East and Africa represents a ray of hope, as it continues to experience consistent growth and significant profits.
New analysis from Frost & Sullivan Commercial Geostationary Satellite Transponder Markets for Europe, the Middle East and Africa - 'Opportunities for growth in an uncertain world', reveals that revenues in this industry totaled $3.79 billion in 2002 and are projected to reach $4.88 billion by 2009.
However, satellite operators face numerous challenges that threaten to obstruct their path to greater profitability. Optimistic demand growth projections that led many operators to launch new transponders failed to materialise, leaving them with excess capacity and compelling them to reduce lease rates.
Further compounding this problem is the migration of video broadcasting from analog to digital signals. Increased efficiency allows for more content to be broadcast per transponder.
This cuts into the demand for new capacity. Moreover, the merger of major capacity lessors such as in the direct-to-home television sector is negatively affecting the demand for transponder capacity to relay programming.
Operators must squarely address these issues or face the risk of significant price competition as market participants stoop to any means to get their transponders sold.
While operators must compete with terrestrial networks to increase the use of satellites in fast growing networking applications, they must not lose sight of their biggest revenue generator, namely, video applications. Locking in the key video market is more important for long-term success than overemphasising the networking market.
Frost & Sullivan claims to be a global leader in strategic growth consulting. This ongoing growth opportunity analysis is part of the Satellite Communications Subscription, which also includes market insights on Latin American DTH Satellite Television Services and World Ka-band Satellite Broadband Services.
