Legacy Systems and Next-Generation Programs Drive Growth in MSS Industry

Northern Sky: MSS Market to Generate $8.6 Billion in Revenue by 2010. . From an estimated $1.05 billion in revenues for 2003, the market is expected to reach $8.6 billion by 2010. Revenue growth will be driven by both legacy platforms and new services, including traditional narrowband services, next-generation broadband platforms, satellite digital multimedia broadcasting (S-DMB) services, and the hybrid MSS ancillary terrestrial component (MSS/ATC) service.

The government/military segment will continue to be a vital end user group for the MSS industry. Recent years have shown the MSS industry to be invaluable in supporting disaster preparedness & recovery activities, military applications, and other critical civil requirements that require rapidly deployable, reliable and ubiquitous communications services. The government/military sector in particular has boosted demand for MSS services and equipment that support the most challenging logistical activities around the globe. The government/military is using the most basic satellite solutions to carry voice and narrowband data, as well as highly refined and sophisticated mobile broadband and video units for applications that require very high and secure bandwidth connections.

However the commercial market, which includes enterprise verticals and consumer segments, is expected to account for greater demand during the second half of the decade. The commercial airline industry will increasingly target high-paying international business travelers on long-haul trips for Internet usage and video services, and S-DMB will thrive for select country markets such as South Korea,. These are only two of the most high profile services leading to long term revenue generation at robust levels in the commercial MSS space.

Also on the horizon is the new and highly promising MSS/ATC service, which is expected to drive customer uptake in the United States starting in 2009. The FCC has licensed MSV and globalstar and is likely to issue ATC licenses to other players such as Terrestar and ICO in the very near term. ATC enables satellite companies to provide terrestrial services much like existing cellular services and should lead to a large installed base of users within a relatively short period of time.

Many mobile carriers anticipate an increase of cellular penetration levels in the United States from 68% in end-2005 to over 90% by end-2010. Achieving such high penetration inevitably requires aggressive rural implementations. Since most carriers will struggle to identify near term ROI for new rural and underserved cellular coverage, an MSS/ATC offering either as a standalone service or partnership with large cellular carriers becomes highly compelling.

Mobile Satellite Services, 2nd Edition Publ 20060131