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NSR Analysis: The FSS Market Leader Board
by Patrick French, Senior Analyst, NSR, Singapore

Market share in the FSS segment can be measured in any number of ways including total revenues or fleet size. One additional metric, used in NSR’s Global Assessment of Satellite Supply & Demand 9th Edition study, is market share based on total leased commercial capacity either in terms of C-, Ku- and widebeam Ka-band transponders for the classic FSS segment or by Gbps of capacity in the emerging High Throughput Satellite (HTS) segment.

FrenchFig1 For the end of year 2011, NSR once again conducted a leased capacity market share assessment for the world’s FSS operators, and the results were both expected and unexpected.

For the leasing of classic C-, Ku- and widebeam Ka-band transponders, NSR’s assessment was based on 36MHz transponder equivalents (TPEs) of capacity on both station-kept and inclined orbit capacity. In order to avoid double counting and ensure a favorable treatment for all operators, leased capacity was attributed only to the actual owner of each satellite assessed.

For the HTS market share, leasing was base on NSR’s estimate of actually capacity used in the case of satellites dedicated to specific services (e.g., Spaceway-3 for HughesNet).

Global satellite operators remain on top of the FSS market share rankings

NSR’s 2011 market share analysis of all leased C-, Ku- and Ka-band transponders saw once again the same four global operators in the top market share positions. Given that these operators have the largest satellite fleets, their combined position with 62 percent of worldwide leased transponders is understandable.

Yet, this is down two points from 2010 indicating that regional players continue to be strong in many specific market segments around the world and that, in reality, the “global” satellite market remains a very “localized” market in many aspects.

This can be illustrated by assessing, as is done in the GASSD 9th Edition, market share within specific regional markets. Such an assessment often shows that regional players are in fact at the top, or quite close to it, in the individual regional market share assessment as well as a number of important regional markets, for example Southeast Asia, being highly fragmented.

NSR has begun to see a reduction in the fragmentation of the HTS market share leadership board with just four operators accounting for 66 percent of all leased HTS capacity in 2011, but the top players are in flux. In 2010, Telesat was one of the HTS market share leaders due to use of capacity on Anik-F2 and -F3 for broadband access services in North America. But Telesat dropped out of a leadership position in 2011 as ViaSat increased usage of its WildBlue-1 and EchoStar-XVII satellites in terms of provisioning its broadband access subscriber base.

NSR expects that the same will soon happen to Ciel Satellite, where NSR defines the spot-beam payload on Ciel-2, currently fully leased for DTH services, as HTS capacity.

Conversely, Eutelsat had yet to emerge on the list of market share leaders in 2011 as demand ramp-up on KaSat has been slow. Further, other players such as YahSat or even Arabsat could make an appearance on the leader board in the coming years as demand on their respective HTS payloads increases.

FrencgFig2 The Bottom Line
The C-, Ku-band and widebeam Ka-band market share assessment of leased commercial TPEs is of no surprise to the industry. However it is interesting to note that Intelsat has a far greater lead over its nearest peers than would be the case in a market share based on revenues. This is because SES and Eutelsat benefit from much higher average revenues per leased transponder than Intelsat, mainly due to their positions in the lucrative European market.

Conversely, a number of surprise entities appear in the HTS market share assessment, such as Ciel Satellite whose role in the market is rather unique. Conversely, other entities like Eutelsat do not yet appear.

NSR expects that ViaSat, Hughes and Eutelsat will come to dominate the HTS market share based on leased capacity within the next one to two years as they begin to drive up usage of their respective large high throughput satellites.

NSR’s view is that these same companies will not be quite as dominant in the HTS segment in the future from a revenue perspective as their core markets, consumer-class broadband access services, depend on cheap capacity. The advantage for these companies is not, per se, in capacity leasing, but in building up large broadband access subscriber bases where the main revenues come from monthly service fees and not the capacity leasing itself.

FrenchHead About the author
Mr. French joined NSR in September 2003 and is the lead author for NSR’s annual studies Global Assessment of Satellite Demand and Broadband Satellite Markets. He has sought to expand NSR’s coverage of the satellite industry into areas such as commercial satellite supply and demand modeling, video distribution and contribution, DTH, telephony and narrowband VSAT networks. In addition, he has undertaken client specific projects in diverse satellite applications and intends to broaden NSR coverage of the European satellite industry. From 1990 to 1999, Mr. French was a staff member of the International Space University (ISU), first in Cambridge, Massachusetts and then 6-½ years at ISU’s Central Campus located in Strasbourg, France. Mr. French held numerous positions within ISU organizing conferences, short courses, and workshops. In parallel, he was responsible for managing the development of the new ISU Central Campus facilities that were completed in mid-2003. Following his work at ISU, Mr. French joined Frost & Sullivan where he rapidly advanced to the position of Strategic Analyst for the Satellite Communications group. While at Frost & Sullivan, Mr. French authored eight studies, led numerous consulting projects, and tracked other diverse markets such as satellite television, launch services, emerging satellite applications and content delivery networks. Mr. French holds a Bachelors of Science in Aerospace Engineering from Boston University and attended the 1999 ISU Summer Session in Nakhon Ratchasima, Thailand. He is fluent in French.