The World Teleport Association (WTA) has published its annual Inside the Top Operators research report.
The eagerly awaited report draws from data submitted to WTA by teleport operating companies around the world for the association’s 2009 Top Operator rankings, which were announced in November of that year. All posted impressive gains – all the more impressive for a period that included a global financial crisis and a stubborn recession in the major industrialized nations. Over the three preceding years that were reported in 2009, the Top Operators racked up a compound annual growth rate of 9.3 percent.
For the teleport sector, 2009 was a year to go back to basics. The top applications as a percentage of revenue were television program origination and backhaul, not networking for enterprises or government customers. The top services were basic uplinking, transponder capacity sales and systems integration — the bread-and-butter of teleport services. Despite the excitement of new applications in content distribution, mobile backhaul, mobility and digital signage, none generated more than 10 percent of revenues on average. It appears that, under recessionary pressures, when new customers and projects are hard to find, teleport operators had a bit less success than in prior years in moving up the value chain and providing the complete end-to-end solutions that provide the greatest return.
Europe and the Middle East have become the world's high-growth markets, while North America and the Caribbean have declined in their geographic share of teleport operator revenues. According to the report, Europe and the Middle East generated nearly twice the revenue of the next biggest market — North America and the Caribbean. West Asia and Latin America also saw strong gains from 2007 to 2009. In addition, examining same-company responses from both 2007 and 2009, we see that the major trends seen in the whole group hold up for individual companies. The primary difference being that existing operators experienced less growth in Europe and the Middle East over the period. In West Asia the growth trend was even more pronounced in the same-company data, which suggests that existing operators have been making the most of the running in that complex market.
Despite the overall 9 percent CAGR for the 2007-2009 period, teleport operators saw pricing soften somewhat from the peak year of 2008 into 2009, with lower percentages of operators raising prices and higher percentages being forced to reduce them. Satellite operators that manage their own network of teleports seem to like their ground-based businesses. Asked how they expected their sources of revenue to change over the next three years, they forecast big increases in teleport and terrestrial transmission revenues but only small increases in revenues from space segment. More competition for independent operators appears to be in the pipeline. “In the wake of the recession teleport operators have shown a shift to the more basic services,” said WTA Executive Director Robert Bell. “There were fewer opportunities to sell value-added services, which caused basic transmission to nudge upward as a share of revenues. However, as the economy gradually improves we should start to see an increase in teleport and value-added services as a percentage of total revenues.”
Inside the Top Operators of 2009 is available free to WTA members from the World Teleport Association Web site at www.worldteleport.org. Non-members may purchase a copy of the report from the site, as well.