Consumer Internet Access to Drive Broadband Satellite Market Growth
WildBlue-1 provides broadband connectivity via satellite. (Arianespace photo)
CAMBRIDGE, MA, June 21, 2007 - Satnews Daily - International market research and consulting firm NSR said service revenues for broadband satellites will increase at an average annual rate of over 11 percent over the coming five years with the fastest growth coming from consumer-class satellite broadband Internet access services such as North America’s WildBlue and HughesNet.
These two services are seeing rapid subscriber growth, which in turn translates into greater service revenue. NSR also said single site satellite broadband services have had success in markets outside of North America, like Thailand and Australia. New service launches in Europe and elsewhere will all help to generate service revenue growth in excess of 22 percent per year through 2011.
Service revenue from the IP trunking segment will actually diminish on a global basis as demand for trunking continues to shift from satellite to undersea cable and fiber, though some regional markets like Africa will see positive gains in the coming years as demand continues to grow in specific countries.
Solid, steady growth in classic enterprise and SME broadband VSAT services and continued growth in shared-hub and managed services in most regions of the world will enable service revenue to increase at a steady rate through 2011. "In addition, increasingly fat bandwidth pipes for existing broadband VSAT networks will increase service revenues as companies take advantage of standardization to carry on adding additional IP-based applications to their enterprise networks," commented Patrick French, senior analyst.
Turning to customer premise equipment (CPE) sales, total CPE revenue for the entire market is forecast to remain in the US$400-US$500 million range per year through 2011. "At first glance, flat CPE revenues may appear to be a poor indicator," noted French, "but the reality is this is positive because it illustrates that declining CPE cost will be one of the key factors in driving up subscriber uptake for single site satellite broadband Internet access services and will push growth in the enterprise & SME broadband VSAT networking segment as well."
Another trend in the enterprise and SME segment is that better performance is being obtained in CPEs of lower or the same price. This is especially true as bandwidth saving technologies like DVB-S2 and ACM (Adaptive Coding & Modulation) are adopted and ever-smaller broadband VSAT networks become financially viable.
The majority of CPE revenues are generated in the enterprise and SME broadband VSAT networking segment. "Interestingly, NSR even forecasts CPE revenues to decline substantially in a number of regional markets,” said French. "Again, this is a positive sign that does not point to slowing demand for services but a lowering of one of the important cost barriers to broadband satellite services uptake."
