Just days after technological sensations at SpaceX, Northern Sky Research (NSR) claimed it will actually be Chinese firms which will dominate emerging satellite markets – meaning fewer growth opportunities for the already troubled fleet operators.
Chinese companies will take a larger share of the global satellite communications market and disrupt Europe and Asia, according to the report. Specifically, for GEO-HTS (geostationary high throughput satellites), Chinese state-owned companies will manufacture and launch over 800 Gbps of capacity by 2026, primarily covering Southeast Asia, according to the forecast.
“Attractive one-stop offerings, aggressive growth plans and enhanced exports” is the consensus from NSR as to why Chinese satellite companies will cause disruption in the market, adding that Chinese firms are targeting turnkey projects including “key financing mechanisms”.
Export of Chinese-made satellites to developing regions will provide between 10% to 15% more capacity over much of Eurasia, and in some cases Latin America, with at least three orders placed so far in 2018, states the report.
“Since the end of the cold war, the satellite and space industry has been a duopoly between the US and EU, with other players such as Russia, Japan, and now India playing a secondary role. At some point soon, however, it appears likely China will assume a position as a top tier space nation globally, with significant ramifications for existing players in the satellite telecoms industry,” states NSR’s China Satcom Markets report.
While satellite TV in North America and Western Europe is struggling and forcing satellite firms to diversify, they can sleep safe in the knowledge that up and coming Chinese disruptors aren’t poised to steal away market share in these regions; over-the-top video has this job covered.
On the topic of diversification, two satellite fleet operators, SES and Intelsat, teamed up at the end of last week, submitting a joint proposal to open up access to C-band satellite spectrum for 5G network usage. This is a significant change of stance by SES, considering Intelsat was the only satellite firm in favor of the proposal a few months ago, resulting in being branded a traitor.
Critically, the majority of the full 500 MHz of C-band spectrum is currently allocated to DTH TV services and if the proposal is waved through, one-fifth of the spectrum will be reallocated to mobile networks to accelerate 5G.
The 5G hype will certainly provide some revenue relief for SES and Intelsat, which own 90% of C-band spectrum in the US between them. That has somewhat cushioned the blow to Intelsat’s stock price compared to its rivals, but the technique is a long way from fruition and relies solely on the FCC approving the sale or lease of this spectrum.
Intelsat actually raised the idea for the first time in early October when the FCC caused commotion among the satellite community with its plans to get better use out of a portion of C-band spectrum from 3.7 GHz to 4.2 GHz. Backing from Luxembourg’s SES will provide the proposal with a major boost.
Intelsat CEO Stephen Spengler defended the company’s plans at the time by saying it is a US-specific issue, but whatever the FCC concludes, the rest of the world will likely follow suit, and this is a key concern for pay TV operators and broadcasters.
Google also weighed in with an opinion last year, claiming that a third of all FCC-registered C-band satellite dishes are abandoned, suggesting the reliance of the satellite industry on C-band spectrum is not as great as the challengers to Intelsat, and now SES, want us to believe. Outside of the US, however, the critical nature of C-band frequency to operators in delivering broadcast TV is higher, particularly in Latin America and MENA.
SES’s outgoing CEO, Karim Michel Sabbagh, had previously said: “The C-band is and remains a critical component of the US network architecture. Space and ground segment operators have invested billions of dollars in US C-band networks and connectivity and generate important value out of it. It is therefore our duty and mission to protect the C-band in the US from any form of disruption and preserve its use.”