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Broadband Satellite Market to Escape Economic Malaise Largely Unscathed If Recovery Starts Prior to End of 2009

4/7/09 - NSR LLC released findings from its latest report, "Broadband Satellite Markets, 8th Edition" that indicate the broadband satellite sector may remain relatively unaffected by the global economic crisis if a turnaround begins in the next 6-12 months. The report is a comprehensive analysis of the global market for broadband VSAT networking, single site satellite broadband Internet access, and satellite broadband trunking & backhaul services in all regional markets.

Companies selling broadband satellite services as a whole had a very successful 2008 with solid revenue growth and sustained increases in installed bases of broadband VSAT sites and satellite broadband subscribers. Moving into 2009, many players report business activity as strong, if not stronger, as a year ago, and there is a definite optimism in the industry that most players will successfully navigate the treacherous waters of the global economic downturn. Yet, there is an undeniable undercurrent of concern and uncertainty with most companies couching their positive outlooks based on the premise that general economic recovery at least commences by late 2009. Should the opposite prove true, then all bets are off.

In assessing the overall broadband satellite markets segment, it is assumed that economic recovery does occur late in 2009 and 2010. Further, it is likely that there will be a generalized spike in demand in the 2011-2013 time period should this assessment prove correct as slowed or delayed projects are restarted and new satellite capacity is launched in the next two years unlocking a number of regional markets that are suffering from limited capacity and high capacity pricing. Beyond 2014, NSR assumes that growth in the above mentioned individual markets will at least return to historical levels and that overall service and customer premises equipment (CPE) revenues for the industry will climb from US$3.3 billion in 2008 to over US$7.6 billion in 2018.

Broadband VSAT networking services for classic verticals such as corporate VPN, retail, hospitality, oil & gas, financial & banking, digital media and other applications have long been the foundation of the overall broadband satellite market. This segment, on a global basis, still generates the most in terms of revenues, required bandwidth, and leased commercial satellite capacity. However, in 2008 the single site satellite broadband Internet access market became the market leader in terms of installed base with over 1.1 million subscribers. By the middle of its ten-year forecast period, NSR projects that single site satellite broadband Internet access services will take the lead in all industry measures including revenues and leased commercial satellite capacity. This trend clearly illustrates why many players in the market are focused on building their base within single site satellite broadband Internet access services.

Finally, NSR continues its long standing projection for slowly declining trunking services, but growth in various backhaul services will more than offset this drop. The single most important aspect of the trunking & backhaul market is that despite the relatively small installed base compared to the two other market segments, trunking & backhaul generates by far the highest revenue per site.

"Broadband Satellite Markets, 8th Edition" is a multi-client report now available from NSR. This study drills down into the broadband satellite market in order to provide an in-depth analysis of key trends in seven different regional markets. The report provides the satellite industry with timely and pertinent data regarding growth in one-way and two-way broadband VSAT sites, subscribers to single site satellite broadband Internet access services, trends in the broadband trunking & backhaul markets, projected service revenues, revenues from sales of customer premises equipment, bandwidth demand, and leased commercial satellite capacity.

Further, the study is completely integrated with NSR's "Global Assessment of Satellite Demand, 6th Edition" and "Wireless Backhaul via Satellite, 2nd Edition" studies such that they offer a library of detailed analysis of demand for commercial satellite services for the industry.

By Robert Hoskins

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