Mobile Satellite Communications Markets Survey, Prospects to 2020 (2011 Edition)

  • ID: 2372812
  • June 2011
  • Region: Global
  • 272 Pages
  • Euroconsult
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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 READ MORE >

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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

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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.

Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown


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