2013: Final State of the Satellite Industry Report

State of the Satellite Industry Report June 2013

Sponsored by the

Prepared by

The Satellite Industry Association: 18 Years as the Voice of the U.S. Satellite Industry

2

SIA MEMBER COMPANIES

Study Overview

•  This is SIA’s 16th annual comprehensive study of satellite industry data

•  Performed by The Tauri Group •  Over 80 key companies were surveyed worldwide, including all

SIA members, augmented by market analysis and financial reporting

•  Based on year-end 2012 data from major players, representing four satellite industry segments

•  All data reflect global revenues, unless otherwise noted •  Based on unclassified sources •  Revenue is expressed as then-year U.S. dollars (not adjusted for

inflation)

3

Satellite Services

4

Ground Equipment

Satellite Industry Segments Surveyed

Launch Industry

Satellite Manufacturing

Global Satellite Industry Revenues

•  Global satellite industry grew 7% in 2012, outpacing both worldwide economic growth rate (2.3%) and U.S. growth (2.2%)

5

7%

2011 – 2012 Global Growth

$121.7 $144.4

$160.8 $168.0 $177.4 $189.5

$0

$50

$100

$150

$200

2007 2008 2009 2010 2011 2012

Billio

ns o

f U.S

. dol

lars

Global Satellite Industry Revenue ($ Billions)

Growth rate 15% 19% 11% 5% 6% 7%

The Satellite Industry in Context

•  The global satellite industry is a subset of both the global telecommunications and space industries »  Satellite industry = 62% of space

revenues (remainder primarily governmental space budgets)

»  Satellite industry = 4% of telecommunications revenues

•  Satellite industry growth tracks with both the telecommunications and space industries in 2012 »  Telecommunications revenue growth

= 14% »  Space revenue = 5% »  Satellite industry = 7%

6 Sources: SIA “State of the Satellite Industry Report 2013”; Telecommunications Industry Association “2013 Playbook”; Space Foundation “The Space Report 2012.” All industry revenue figures are for 2012.

Telecommunications Industry

$4.9 Trillion

R&D 9%

Space Science

9%

Navigation 7%

Meteorology 3%

Military Surveillance

8% Remote Sensing

10%

Commercial Communications

38%

Government Communications

16%

The Satellite Network in Context

Operational Satellites by Function (as of 2012)

7

•  Over 1,000 operating satellites as of year-end 2012

»  More than half are communications satellites

»  More than one third are commercial communications satellites

•  More than 50 countries operate at least one satellite (some as part of regional consortia)

Source: Tauri Group database of spacecraft and launch activities.

Top-Level Global Satellite Industry Findings

•  Satellite industry revenue was $189.5 billion in 2012 »  Growth of 7% worldwide in 2012, surpassing 6% in 2011

•  All four satellite industry segments surveyed posted growth in 2012

»  Satellite services, the largest segment, grew by 5%

»  Satellite manufacturing revenues grew by 23%

»  Launch industry revenues rose by 35% in 2012

»  Ground equipment revenues increased by 4% in 2012

8


8% Launch Industry

3%

Satellite Services 60%

Ground Equipment

29%

World Satellite Industry Revenues By Segment: Long-Term Review

9


15% Launch Industry

5%

Satellite Services

50%

Ground Equipment

30% 2001

$64.4B

Global satellite industry revenues have nearly tripled since 2001, with an average 10% growth per year

3X

2001 – 2012 Global Industry

Growth

2012 $189.5B

10

Satellite Industry Segments

Satellite Services •  Consumer Services

»  Satellite Television »  Satellite Radio »  Satellite Broadband

•  Fixed Satellite Services »  Transponder

Agreements »  Managed Network Services

(including spaceflight management services)

•  Mobile Satellite Services »  Mobile Data »  Mobile Voice

•  Remote Sensing/Imaging Services

Global Satellite Services Revenue

11 Notes: Numbers may not sum exactly due to rounding. 1. Includes capacity for DTH satellite TV platforms. 2. Includes VSAT networks; Space Flight Management services included in Managed Services beginning in 2010

5%


2007 2008 2009 2010 2011 2012

TOTAL $72.6 $84.0 $92.9 $101.3 $107.8 $113.5 Consumer $57.9 $68.1 $75.3 $83.1 $88.6 $93.3

Satellite TV (DBS/DTH) $55.4 $64.9 $71.8 $79.1 $84.4 $88.4 Satellite Radio (DARS) $2.1 $2.5 $2.5 $2.8 $3.0 $3.4 Satellite Broadband $0.4 $0.8 $1.1 $1.2 $1.2 $1.5

Fixed $12.2 $13.0 $14.5 $15.0 $15.7 $16.4 Transponder Agreements (1) $9.6 $10.2 $11.1 $11.1 $11.4 $11.8 Managed Services (2) $2.6 $2.8 $3.4 $3.9 $4.3 $4.6

Mobile $2.1 $2.2 $2.2 $2.3 $2.4 $2.4 Voice $0.9 $0.9 $0.7 $0.7 $0.7 $0.7 Data $1.2 $1.3 $1.5 $1.6 $1.7 $1.8

Remote Sensing $0.4 $0.7 $1.0 $1.0 $1.1 $1.3

$0

$20

$40

$60

$80

$100

$120

$ billi

ons

Remote Sensing Mobile Fixed Consumer

Satellite Services Findings: Consumer Services Highlights

•  Satellite services revenues grew 5% worldwide in 2012 (slightly lower than the 6% growth in 2011) to $93.3 billion U.S. dollars

•  The consumer services segment was the largest contributor to overall satellite services revenues and consists of satellite television, radio, and broadband

12

»  Satellite television services (DBS/DTH) account for more than 80% of all satellite services revenues, and 95% of consumer revenues

»  Satellite pay TV subscribers up 4%, driven by growth in emerging markets

»  Over 160 million subscribers worldwide

»  40% of global revenues attributed to the U.S.

Satellite TV $88.4

Satellite Radio $3.4

Broadband $1.5

»  Satellite radio (DARS) revenues grew by 13% in 2012

»  Satellite radio subscribers grew 9% in 2012 to nearly 24 million

»  Primarily U.S. customer base

»  Satellite broadband service revenues increased from $1.2 billion in 2011 to $1.5 billion in 2012

»  Subscribers grew 10% in 2012, with over 1 million subscribers (mostly in the U.S.)

»  Subscriptions grew for established services, and several new services entered operations in 2012

Satellite Services Findings

•  Fixed satellite services grew 4% »  Transponder agreements revenues grew 3%, continuing the steady trend of recent

years »  Managed services revenues grew 7%, slightly slower than last year’s 10% growth

•  Mobile satellite services grew 3% »  Mobile satellite voice revenues were flat »  Mobile satellite data revenues grew 5%

•  Remote sensing revenues grew 20% »  U.S. government spending drove growth, along with better-than-expected performance

from industry leaders

13

Case Study: Impact of HDTV on the Satellite Industry

•  Increasing numbers of High Definition Television (HDTV) and cable distribution channels continued to drive revenues for satellite pay TV

•  HDTV contributes to retail and wholesale services revenue by increasing transponder agreement revenues and consumer satellite TV revenues

•  HDTV also drives ground equipment purchases •  Nearly 60% of HDTV channels serve the Americas, with emerging growth in

Europe and Asia

14 0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

May 2008 May 2009 May 2010 May 2011 May 2012 May 2013

Num

ber of HDTV

Cha

nnels

31%

2011 – 2012 Growth

Source: LyngSat database.

15



$4.8 $3.1

$7.6 $5.6 $6.3

$8.2

$6.8

$7.4

$5.8

$5.1 $5.6

$6.4

$0

$2

$4

$6

$8

$10

$12

$14

$16

2007 2008 2009 2010 2011 2012

$ billion

s

Non-United States

United States

Satellite Manufacturing Revenues

16 Note: Satellite manufacturing revenues are recorded by this study in the year the satellite is launched.

23%


•  Worldwide 2012 revenues totaled $14.6 billion •  U.S. market share neared 60% of global revenues

Commercial Communications

30%

Civil/Military Communications

20% R&D 7% Military

Surveillance 6%

Meteorological 4%

Navigation 11%

Remote Sensing 15%

Scientific 7%

Spacecraft Launched by Mission Type (2012)*

Europe, 22%

Russia, 16%

China, 23% Japan, 2%

USA, 32%

All other, 4%

Spacecraft Launched by Country/Region of Manufacturer (2012)

* Does not include government-built, university-built, and/or research satellites

Satellite Manufacturing Findings

•  While revenue grew, fewer satellites were launched in 2012 (81) than in 2011 (90)

•  Revenue growth was driven by a greater number of higher value satellites

17

•  U.S. satellite manufacturing revenues increased 31%

•  U.S. firms built one third of the spacecraft launched in 2012, and earned nearly 60% of global satellite manufacturing revenues

•  61% of U.S. satellite manufacturing revenues from U.S. government

Based on unclassified sources

Future Indicator: Commercial Satellite Manufacturing Orders

18

U.S., 12 (67%)

Europe, 3 (17%)

China, 2 (11%)

Israel, 1 (5%)

2012 GEO orders:

18

•  Orders for 18 commercial GEO satellites were placed in 2012

•  12 orders were won by U.S. manufacturers

•  This represents the largest share of announced orders won by U.S. manufacturers in over a decade

15 10 7

21

12 12 6

11

11 12

18

16 9

12

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

5

10

15

20

25

30

35

40

45

2006 2007 2008 2009 2010 2011 2012

Num

ber of satellites ordered

U.S. GEO orders

All other GEO orders

U.S. share announced (%)

Case Study: Manufacturing Trends - Innovation in Spacecraft

•  High throughput satellites (HTS) combine the use of several technologies for far greater efficiency, including frequency re-use, spot beams, and on-board processing to maximize available spectrum »  22 HTS ordered and/or being manufactured »  18 currently on orbit

•  All-electric propulsion provides a significant reduction in satellite weight, but requires more transit time to reach final orbit »  For the first time, orders were placed for all-electric propulsion

commercial GEO communications satellites in 2012

19

20


Launch Industry •  Launch Services •  Launch Vehicles

$1.0 $1.1 $2.0

$1.2 $1.4 $2.2

$2.2 $2.8

$2.7 $3.2

$3.4

$4.3

$0

$1

$2

$3

$4

$5

$6

$7

2007 2008 2009 2010 2011 2012

Billio

ns of

U.S

. doll

ars

All Other

United States

Satellite Launch Industry Revenues

•  $6.5 billion global revenues in 2012 from commercially-procured launches •  U.S. market share was 35% of global revenues; derived almost entirely

from government launches

21 Note: Launch Industry revenues are recorded by this study in the year the launch is conducted.

35%


GEO 58%

LEO 34%

MEO 8%

Satellite Launch Industry Findings

•  Satellite launch industry revenues increased by 35% globally in 2012, compared with 10% in 2011 »  Despite fewer satellite launches in 2012, revenues grew due to more launches of larger

and more expensive vehicles »  Government customers remained the major satellite launch revenue driver in 2012,

accounting for 64% of commercially-procured satellite launch revenues »  This marked a slight increase from the 59% government share in 2011

•  The U.S. had the largest share of all commercially-procured launches, nearly all from launching U.S. government satellites

•  The number of commercially-procured launches remained relatively stable. 52 launches occurred in 2012, compared to 56 launches in 2011

22

2012 commercially-procured launches by

orbit

Future Indicator: Commercial Launch Orders

23

U.S. 8

Europe 11

Russia 2

China 2

Multi 1

India 1

2012 orders:

25

•  Orders to launch 25 commercial payloads were placed in 2012

•  8 payload launch orders were won by U.S. companies, up from 3 ordered in 2011

•  Europe retained the largest share of commercial launch orders

26

42

26 26 29 27

17

9

6 31

15

20

3

8

0%

10%

20%

30%

40%

50%

60%

0

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011 2012

Num

ber of laun

ches ordered

U.S. commercial launch orders

All other commercial launch orders

U.S. announced share (%)

24

Ground Equipment •  Network Equipment

»  Gateways »  Control stations »  Very small aperture

terminals (VSATs) •  Consumer Equipment

»  Satellite TV dishes »  Satellite radio equipment »  Satellite broadband dishes »  Satellite phones and mobile satellite

terminals »  Satellite navigation stand-alone

hardware


World Ground Equipment Revenues

25

Includes: Network Equipment — Gateways, Network Operations Centers (NOCs), Satellite News Gathering (SNG) equipment, flyaway antennas, and Very Small Aperture Terminals (VSATs) Consumer Equipment — Satellite TV, radio, and broadband equipment, mobile satellite terminals, and stand-alone satellite navigation devices, not including chipsets used in devices (such as smartphones) whose primary use is not satellite navigation

4%


$7.6 $9.9 $11.9 $12.2 $12.2 $12.8

$20.8

$29.4 $31.1 $31.9 $32.2 $32.2

$5.9

$6.7 $6.9 $7.5 $8.4 $9.8

$0

$10

$20

$30

$40

$50

$60

2007 2008 2009 2010 2011 2012

Billio

ns o

f U.S

. dol

lars

Network Equipment

Satellite navigation equipment

Satellite TV, radio, broadband, and mobile equipment

Ground Equipment Findings

•  Ground equipment revenues increased 4% overall in 2012 •  Network equipment revenues grew 17%, driven by VSAT sales •  Satellite TV, broadband, radio, and mobile voice and data equipment

revenues grew 5%, and the number of terminals in service grew across all segments in 2012

•  Satellite navigation equipment represents nearly 60% of overall ground equipment revenue, with a migration away from stand-alone to embedded chipsets

26

Satellite TV 160.2

Broadband 1.4

Satellite Radio 23.9

Mobile Voice and Data 2.6

Term

inal

s in

Ser

vice

(m

illio

ns)

U.S. Employment Estimates (Private Employment Only) •  Satellite industry employment in the U.S. decreased by 1% in 2012, compared to a 2% loss

in 2011 •  U.S. satellite companies shed a little over 20,000 jobs between 2007 and 2012, an 8% loss •  Three of the four satellite industry segments experienced job losses in 2012

»  Satellite Services added 5,035 jobs, or +7% (2011: -2.4%) »  Satellite Manufacturing employment declined by 1,549 jobs, or -6% (2011: -3%) »  Launch Industry employment declined by 1,246 jobs, or -2.2% (2011: -2.2%) »  Ground Equipment employment decreased by 3,647 jobs, or -4% (2011: -0.7%)

27

0

50,000

100,000

150,000

200,000

250,000

300,000

2007 2008 2009 2010 2011 2012

Num

ber o

f job

s

Satellite Services Satellite Manufacturing Launch Industry Ground Equipment

Source: U.S. Bureau of Labor Statistics (BLS). All figures are preliminary estimates for 2012 based on figures through Q3 2012. Data will be updated for full-year 2012 in Fall 2013.

Consumer $93.3

Fixed $16.4

Mobile $2.4

Remote Sensing, $1.3

2012 Satellite Industry Indicators Summary

28

$189.5B 2012 Global Revenues

7%

Growth 2011 – 2012


$14.6B

Launch $6.5B

Ground Equipment

$54.9B

Satellite Services $113.5B

5%

23%

4%

35%

Satellite Services $113.5

Ground Equipment

$54.9


$14.6

Launch Industry

$6.5 Consumer

(GNSS) $32.2

Consumer (Non-GNSS)

$12.8

Network $9.8

U.S. $8.2

U.S. $2.2

Non-U.S. $4.3

Non-U.S. $6.4

•  Satellite industry revenue was $189.5 billion in 2012 »  Growth of 7% worldwide in 2012 »  Surpassed 6% growth rate in 2011 »  The satellite industry fares well with tracking

industries

•  All four satellite industry segments surveyed posted growth in 2012 »  Satellite services, the largest segment,

grew by 5% - consumer services continues to be a key driver for the overall satellite industry

»  Satellite manufacturing revenues grew by 23%, due to proportionally more expensive commercial GEO and government satellites in 2012

»  Launch industry revenues rose by 35% in 2012, even with fewer overall launches, but with more commercial launches and more expensive heavy government launches than 2011

»  Ground equipment revenues increased by 4% in 2012, with slowing growth in consumer equipment and increasing growth in network equipment

$121.7 $144.4

$160.8 $168.0 $177.4

$189.5

$0

$50

$100

$150

$200

2007 2008 2009 2010 2011 2012

$ billi

ons

Global Satellite Industry Revenue ($ Billions)

Top-Level Global Satellite Industry Findings

29 2011 – 2012 Global Growth

7%

Contact

Previous reports are available at www.sia.org

For more information on the satellite industry,

please contact [email protected]

Satellite Industry Association 1200 18th Street, NW

Suite 1001 Washington, DC 20036

202-503-1560

The Tauri Group space.taurigroup.com

30

2013: Final State of the Satellite Industry Report

Science

Transcript of 2013: Final State of the Satellite Industry Report