Mobile Satellite Communications Markets Survey, Prospects to 2020 (2011 Edition)
Euroconsult, June 2011, Pages: 272
An expert analysis of the mobile satellite industry, assessing key trends and drivers in this market characterized by both a number of growth opportunities and challenges for key players. Satellite operators, service providers, investors, manufacturers & launchers, telecoms companies, space agencies and other actors use the exclusive ten-year forecasts in their business and investment planning and strategic decision-making.
Mobile Satellite Communications Markets Survey, Prospects to 2020 is an expert analysis of the mobile satellite industry, assessing key trends and drivers in this market characterized by both a number of growth opportunities and challenges for key players. Satellite operators, service providers, investors, manufacturers & launchers, telecoms companies, space agencies and other actors use the exclusive ten-year forecasts in their business and investment planning and strategic decision-making.
The report provides a complete analysis of trends and prospects by segment, application and region:
Strategic Issues & Forecasts
- Current demand for MSS communications
- Key trends & major applications
- Ten-year forecasts (wholesale revenues & terminals)
Operators & Value Chain
- MSS operators: Financials, strategies & positioning
- Value chain & distribution
Applications
- MSS broadband, M2M, handheld
- Military & civilian government
- Mobile VSAT
Market Segments: Maritime, Land, Aeronautical, Government
- Supply (including key players)
- Business models, major trends, competition
- Applications & devices, regulation
- Key assumptions & forecasts to 2020
Regional Profiles (Five Regions)
- Current situation & trends
- Key regional players (operators & service providers)
- Regulation
- Trends & drivers by segment & application
- Forecasts to 2020
Part 1: Strategic Issues & Forecasts
MSS, a $1.4 billion market at MSS operator level in 2010
- Three operators accounting for 90% of the market
- More than two million MSS terminals in service in 2010
- Six MSS operators currently providing service
- Four MSS operators with positive EBITDA in 2010
The MSS value chain currently most dynamic on the service provider level
A broadening range of MSS product to serve a growing number of markets
- Four major types of MSS terminals with very distinct features
- Usage in a growing number of specialized vertical markets
Key trends and drivers in the MSS industry
- MSS growth primarily driven by data applications
- New products allow for new end-user applications and broader usage
- The sector should benefit from the launch of new generation MSS systems
- Strong growth in emerging regions
- Increasing regulatory requirements a potential growth opportunity for MSS
- Emerging market segments about to take off
- Government and military markets remain key MSS users
- Increasing competition from VSAT
- Impact on MSS business expected from Inmarsat's investment in Ka-band
- Competitive pressure should lead to a decrease in prices over time
- Integration of MSS with other technologies a possible growth strategy
MSS industry forecasts to 2020
- MSS industry to grow at a CAGR of 7% over 2010-2020
- North America to remain leading region for MSS industry
- Land to remain largest MSS market with over $1.2 billion wholesale service revenue in 2020
- MSS broadband to account for close to 50% of MSS wholesale service revenue in 2020
Part 2: MSS Industry Value Chain
$1.4 billion of consolidated revenues for MSS operators in 2010
- Three operators account for nearly to 90% of the market today
- New market entrants still having limited business
MSS Operators' Financials
Most MSS operators reported revenue growth in 2010
Large varieties in profit margins among MSS operators
- Four operators with positive EBITDA in 2010
- Mixed performance in net results among the operators
- MSS operators have significantly different cost structures
Export Credit agencies (ECAs) key to finance
MSS capex requirements Stock performance of MSS operators
Operators' Strategies & Positioning
Product portfolios and market positioning of MSS operators rapidly evolving
Product portfolios of MSS operators more diversified today
Vertical integration enabling higher level control in distribution
Hosted payloads as a new revenue opportunity for MSS operators Technology Trends
- Increasing capabilities with new-generation MSS satellites
- Other major technology trends
- Spectrum still a scarce resource in the MSS world
- Ka-band potentially blurring the borders between MSS and FSS operators
MSS Service Distributors
Service distributors connect the MSS industry with the user group
- Service distributors as key element in the MSS value chain
- Expanding service distribution networks for all MSS operators
- Concentrated first-tier MSS service distribution market
- Fragmented downstream distribution market
- Service providers playing a significant role in the regional markets
Key trends and drivers for MSS service distributors
- Vertical integration impacting the industry's future
- Specialized service providers playing important role in niche markets
- More diversified distribution channel for mass market products
Increasing product portfolios of service providers with a combination of technologies & services
Outlook for MSS service distribution
MSS Equipment Manufacturers
- The market counts around 20 major MSS equipment manufacturers today
- MSS product portfolios varying among equipment manufacturers
- The number of players increasing with new MSS products
- Direct and indirect equipment sales models applied by MSS operators
- Key equipment manufacturers active in both MSS and VSAT markets
- Price decrease to affect MSS wholesale equipment revenue over time
Part 3: MSS Applications & Markets
MSS Broadband
Crucial growth driver for the MSS industry
- MSS data terminal evolution moves towards broadband
- BGAN currently 70% of the MSS broadband market
Key addressable markets for MSS broadband
- Traditional MSS markets migrating to broadband
- Land market
- Maritime market
- Aeronautical market
MENA as the largest usage area Growth prospects for MSS broadband
- Escalating demand for MSS broadband data
- Increase in broadband penetration in maritime and aero markets
- Heavy usage in emergency response and quick deployment situations
- Augmented service offering in key addressable regions
VSAT as chief competition to MSS broadband
- Fast progression for mobile VSAT
- Capacity limitations and constraints for L-band service
- High airtime pricing compared to VSAT solutions
- Move to Ka-band, even for MSS operators
Forecast for MSS broadband to 2020
- Total MSS broadband terminals to grow to over 270,000 by 2020
- Wholesale MSS broadband service revenues to exceed $1 billion in 2020
- More balanced regional distribution in 2020
Vast potential for the MSS industry
- More than 1.3 million M2M terminals in 2010
MSS Low Data Rate – M2M Market
Primary vertical markets driving the growth
- The land market presenting the largest opportunity
- Emerging market segments bring more opportunities
- North America as the largest MSS M2M market
Business models & market structure of MSS M2M industry
- Two different models for MSS operators
- Value-added resellers as a key in the value chain
- A low ARPU business relying on terminal growth
Key trends in the MSS LDR market
- North America still dominating, but other regions catching up
- Strong competition from other technologies
- Dual-mode terminals as gap fillers for cellular networks
- Hardware costs keep decreasing
- Introduction of new maritime regulations stimulating rollout
- M&A consolidating the MSS LDR market
- New distribution channels further pushing growth
Forecast for M2M & asset tracking applications to 2020
- More than six million MSS M2M terminals in service by 2020
- Wholesale service revenue to more than triple by 2020
- Land market to remain dominant in the MSS M2M industry
- Regional distribution to become more balanced
MSS Handheld Market
A core MSS market
- Professional users as key satellite phone users
- Close to $300 million in handheld service revenue for MSS operators in 2010
- North America & MEA the leading global handheld markets
Chief characteristics and current trends
- Industrial design for professional users
- High price for products from established players
- Satellite-only handsets dominating the market
- Diversified distribution channels
- An event-driven market
- New entrants trying to grab a part of the market
- Competition from other technologies continues to be a major hurdle
Forecast for MSS handhelds to 2020
- More than one million active MSS handsets by 2020
- Wholesale service revenue to grow at a CAGR of ~4% over 2010-2020
- Strong growth in emerging markets
Increasing market overlap between MSS & mobile VSAT
- MSS limitations as opportunities for mobile VSAT development
- Technology progress making mobile VSAT a threat for MSS
- Mobile VSAT still facing multiple challenges
Mobile VSAT Competition
Mobile VSAT business model differs from MSS approach Increasing overlap between mobile VSAT & MSS in target markets
- Mobile VSAT gaining momentum in all major market segments
- Land
- Maritime
- Aeronautical
Critical drivers & barriers for mobile VSAT
- High data rates and fixed monthly pricing as major growth driver
- ...however, high equipment cost and strict regulation still a barrier
Ka-band to reshape the mobile VSAT market
- Inmarsat's move towards Ka-band to increasingly blur the border between MSS and FSS
- More Ka-band systems expected in the future
- Hybrid Ku/Ka-band solutions
Varied level of maturity across VSAT segments, but all growing
- Maritime VSAT to further increase its share in the maritime market
- Aeronautical VSAT, a nascent market with good growth opportunities
Part 4: Market Dynamics for the MSS User Segments
Maritime MSS Markets
Maritime market continues to grow
- Close to 300,000 maritime MSS terminals active at year-end 2010
- Inmarsat still the leading MSS operator in the maritime segment
Commercial shipping still the chief maritime market
Strongest traffic in the Northern Atlantic & Asia Pacific region
Change in usage patterns with more diversified MSS products driving growth
- Major applications for MSS in maritime markets
- Increasing variety of MSS products for maritime markets
Service provider landscape for maritime markets getting more specialized
- Strong position of legacy service providers
Regulation still plays critical role in maritime communications
- Jurisdiction of the states depends on the distance from the shore
- International regulatory authorities in charge of safety of life at sea
- Main regulatory barriers related to former monopoly of Inmarsat
- Regulation acting both as a market driver and a market inhibitor
- New regulatory applications foster a competitive market environment
Key trends & drivers for MSS in the maritime market
- Broadband solution as a revenue driver
- MSS to support operational application for fishing vessels
- Emerging commercial and welfare communications driving the demand
- Automatic operations for a more cost-effective business model
- Larger ships deploy more than just one satcom system onboard
- Low-data-rate applications present an increasing opportunity for MSS
MSS increasingly threatened by maritime VSAT
- Increasing convergence of target markets between MSS and VSAT
- Emerging manufacturers entering the market with low-end MSS products
- MSS equipment competitive pricing as major purchase decision
- More competitive pricing to attract more diversified customer sets
Forecast for the maritime MSS market to 2020
- Addressable market remains limited but will continue to grow
- Maritime MSS terminals expected to grow at a CAGR of over 7% by 2020
- MSS wholesale maritime service revenues at $700 million by 2020
- Europe expected to remain the leading region for maritime revenues
Land Market
Land mobile, a highly competitive and heterogeneous market
- A diverse application mix for a large market
- Strong competition between all MSS operators
Three key applications for different vertical segments
- MSS service usage level by vertical market
- Voice still the dominant land mobile application
- Broadband data application on the rise
- M2M has high share in terminals but low share in revenues
North America & the Middle East: The largest regional markets Major trends & drivers
- MSS broadband creating new types of users
- MSS M2M solutions expanding into more vertical segments
- Competition from terrestrial technologies still a major issue
- Opportunities appear in the combination of satellite and terrestrial
Forecast for land MSS markets to 2020
- M2M the main growth driver in terms of MSS terminal numbers
- Global wholesale service revenues to be more than $1.2 billion by 2020
- North America expected to remain the leading region for land revenues
A nascent market with significant growth potential
- MSS aero wholesale service revenues stand at $126 million in 2010
- Two MSS operators dominating the market
Aeronautical MSS Markets
Despite the global nature of the aero market, a regional focus is observed
Different dynamics in the various addressable aero markets
- Business aviation and commercial airlines as key civil markets for MSS
- Business aviation as first addressable civil market
- Commercial airlines in-flight entertainment as new satcom opportunities
- Government market as a significant user
- Helicopters as emerging growth point
- General aviation requiring basic satcom applications
Key aero applications pushing satcom market forward
- A variety of new MSS aero products have come to the market
- Cockpit communications still main application with growth for cabin connectivity
Market consolidation & partnerships in the value chain Regulation a key issue in a highly controlled market environment
- International organization developing applicable regulatory standard
- Aeronautical regulation principles
- Division between safety communications and non-safety communications
- Regulations driving the market through future regulatory programs
- …However, regulation can also slow down the market dynamic
Other major trends & drivers for MSS in the aeronautical markets
- The launch of MSS broadband as a main growth driver
- Uptaking market demand for in-flight entertainment services
- Relatively low cost and small equipment a advantage for MSS
- Demand in low data rate basic voice communication still sustainable
- Increasing competition between MSS and other technologies
- Increasing convergence and overlap of MSS and VSAT
Forecast for the aeronautical MSS market to 2020
- Terminals more than double by 2020, driven by more diversified applications
- MSS aeronautical wholesale service revenues to grow at a CAGR of over 11%
- North America to remain the leading region
Government Market
Government estimated to count for almost a third of the MSS market today
- Impact of military operations on the MSS industry
- Military accounting for the bulk of government demand
- Emergency communications dominant for civilian government operations
The US DoD as the single largest customer
- US government accounting for significant part of MSS revenue
Key requirements & applications for government users
- Complex military needs shape requirements related to MSS services
- Government users are the most important land mobile customers
- Maritime market to face a transition phase
- Aero a fast growing government segment
- BFT and BFT-2 as important elements for LDR services
- New generation Push-to-Talk service for the DoD
Geographically concentrated government MSS usage
- The Middle East and Africa as the current main market
Service distribution for government/military users
- US DoD contract vehicles for acquiring commercial satellite capacity
- Multiple opportunities existing for US DoD procurements
Strong competition from other satellite systems
- Proprietary military satellite system as the key competitor
Good prospects for future MSS milsatcom needs
Part 5: Five Regional Profiles
North America – Central & South America – Europe – Middle East & Africa – Asia
Pacific Each regional chapter includes:
Market overview
- Current market situation and outlook
- MSS operators' activities and market shares
- Distribution and service provision in the region
Regulatory aspects
- Overview
- Frequency allocation
- Market access and licensing
- Foreign ownership rules
- Main regulatory issues and future outlook
Overview and forecast of the main market segments
- Maritime
- Land
- Aeronautical
Overview and forecast of main MSS applications
- MSS Broadband
- M2M
- Handheld
Mobile Satellite Communications Markets Survey, Prospects to 2020 Comprehensive expert analysis & forecasts for the MSS sector MSS wholesale revenue is expected to grow roughly 7% per year over the coming decade, due to increased demand for broadband and other MSS services in a number of vertical segments and emerging regions.
Annual growth in terminals is estimated to reach nearly 13% over the decade. A large part of this market growth to the continued shift from legacy voice services to data applications, in both high-speed broadband and low-speed messaging and asset tracking. Strong demand from commercial markets will boost the industry and more than offset a potential slowdown from government users for current military operations. Growth should also be supported by new products with enhanced capabilities, enabled in part by the launch of new MSS systems -- including Iridium NEXT and second-generation constellations from Globalstar and Orbcomm.
Nevertheless, competition from terrestrial technologies and VSAT services – which offer higher data rates and more attractive service pricing -- will remain a threat to MSS growth. Yet MSS operators are responding, such as leading MSS operator Inmarsat which announced plans to launch global Ka-band satellite service by 2014 (Global Xpress). This technology shift in the VSAT market should also have an impact on the MSS industry.
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