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Satellite Transponders Overview
An Insight Partners Executive Summary


Satellite transponders are the space-based sophisticated cluster of radio repeaters, integrated into telecommunication satellite.

Being a critical fragment of antenna system and microwave repeater, these transponders amplify single or multiple carriers received from the uplink (terrestrial transmitters to satellite receivers) on the downlink (satellite transmitter to terrestrial receiver) of a geostationary communication satellite.

These, satellites along with their cohorts in the same orbit, embrace bent-pipe repeaters or conventional type transponders that use Ku- and C-bands. These repeaters receive and transmit carrier waves frequencies as well as distribute them into separate transponders of a fixed bandwidth.

The market for satellite transponders is anticipated to grow in terms of coverage and capability as Ka- and Ku-band frequencies pertain to fuel the market growth; moreover, the rising number of subscriber updates and new subscribers are also expected to drive the global satellite transponders market. Furthermore, owing to the present technological advancements in satellite communications (SATCOM), several new applications of satellite transponders are expected to emerge. These satellites are accounted to be potent enough to compete against their rival — Digital Subscriber Line (DSL) broadband  — in terms their performance.

The market for satellite transponders is highly influenced by the rising demand for high throughput satellites (HTS) and Fixed Satellite Services (FSS).
Satellite transponders are the critical constituent of fixed satellite services (FSS). These services coherently offer transponder leasing agreement, which is also the key service offered in terms of satellite transponders.

Going forward, FSS is predicted to remain relevant in the coming years and the expectation is they will remain a prime enabler for upcoming, advanced television services. As the market for FSS increases, the demand for satellite transponders is also anticipated to rise. As FSS operates primarily on the Ku- and Ka-bands, expansion in the bandwidth of these particular frequency bands would result in a significant rise in payload capacity of the satellites, which is further expected to generate more demand for communication satellite transponders.

Furthermore, escalating need for data communication and numerous launches of the latest HTS systems are anticipated to drive the satellite transponders market and to also escalate the consolidations in the value chain. HTS have signified growth over the past two years — approximately 20 new systems were ordered that included eight satellite expansions that were ordered by O3b. This is subsequently leading to a remarkable rise in the volume of leased HTS capacity, which is anticipated to cause a the growth surge within the satellite transponders market, thereby generating growth pockets for ecosystem vendors.

Expansion in the Ku-band applications to generate new opportunities for the communication satellite transponders market.
Live broadcasting and video distribution are seen as some of the major applications of Ku-band satellites, as they are also used for several data services that include: VSAT services, broadband connectivity, mobile backhaul, aeronautical, and maritime services. In this highly connected world, all of these applications are considered crucial for the success of a business concern.

In fact, Ku-band is the main spectrum used by mobility networks to deliver broadband connectivity in areas where terrestrial networks cannot reach, such as over the ocean and in the troposphere. The Ku-band currently captures approximately 40 percent of the market in terms of bandwidth. The demand for Ku-band transponders is anticipated to rise, owing to the increasing demand for satellite TV, especially in developing economies. That is further supported by High Definition TV (HDTV) and demand for other, similar, bandwidth applications.

The evolution of 3DTV channels that consume higher bandwidth and require 50 percent more capacity is expected to offer additional thrust to the Ku-band satellite transponders market. Followed by Ku-band are the C-band transponders that presently hold the largest market share — the expectation is that a steady decrease in demand will occur for C-band during the forecast period as prominence is lost to the Ku- and other bandwidths.

North America will lead the global market by capturing more than 60 percent of the share of the market.
The US has experienced several developments over the past few years in terms of satellite launches. The US government is a major contributor to the growth of satellite transponders leasing revenue. Due to country’s reducing dependency upon internally operated and owned satellites along with the nation’s requirement to maintain network for information gathering and communication worldwide, the US is expected to continue to dominate the market.

The US military had purchased commercial satellite communication services for their own purposes; however, military officials are now in talks with the commercial industry as well as lawmakers to design and develop more new and more flexible agreements that would permit the military to purchase satellite services based on their situational demand.

These moves will also save the military money, all the while offering extended bandwidth whenever such is needed. These acquisitions may not continue to remain the noteworthy source of growth, because of the decline in SATCOM activities as related to the government & military over the past few years. Furthermore, one of the leading companies in the satellite industry is expected to launch a service that will provide redundancy to US Air Force Global Positioning System (GPS) satellites along with a private organization that will deliver location and timing signals via the Iridium 66 satellite rather than through the use of terrestrial terminals. This would make transfer of information far more secure.

Owing to the near approach of saturation in the North American market, South America and Middle East are expected to be the fastest growing markets for satellite transponders in the not-too-distant future.

Transponder leasing services to dominate the global service market
Over the past one to two years, the global satellite transponders market has witnessed approximately a 4.3 to 4.5 percent of rise in the demand for leased transponders. The project is that this will increase further due to the snowballing cost of transponders throughout the globe. Examining the leased transponders market, Europe is noted to be the costliest region in the world, followed by Australia and New Zealand. South Asia offers the lowest leasing rates, which is why Asia Pacific (APAC) is considered to be the most promising market for satellite transponders in the coming years.

The rise in the leasing of communication satellite transponders is highly dependent upon the adoption of HD video broadcasting as well as the widespread use of High Dynamic Range (HDR) Applications. Leasing services are expected to dynamically increase their market share; however, the fluctuations in transponder leasing costs will be highly dependent upon the future capital costs of satellite launches and maintenance.