SIA: State of Satellite Industry is “Positive”

The Satellite Industry Association (SIA) released its annual report on the “State of the Satellite Industry” today with data on how the industry fared in 2016 compared with prior years.  SIA President Tom Stroup said 2016 “was once again a positive year,” though results for the four industry market segments varied widely.  Global satellite manufacturing revenue dropped 13 percent, for example, while satellite ground equipment revenue grew 7 percent.

SIA released the 2017 report, the 20th in the series, at a press conference this morning in Washington, D.C.  The report was prepared for SIA by Bryce Space and Technology.

Overall, worldwide satellite industry revenue grew by two percent in 2016 to a new high of $261 billion, up from $255 billion in 2015.  The 2 percent growth rate is less than the 3 percent in 2015, however, and not all segments fared as well as others.  Satellite services revenue was flat, satellite manufacturing revenue decreased 13 percent, launch industry revenue increased 2 percent, and ground equipment revenue increased 7 percent.

Satellite services encompass consumer services (satellite TV, radio and broadband), fixed satellite services (transponder agreements and managed network services including in-flight services), mobile satellite services, and earth observation services.  Globally, that segment grew just 0.2 percent (hence the characterization as “flat”), from $127.4 billion in 2015 to $127.7 billion in 2016.   The U.S. share of the revenue was 40 percent, down 2 percent from 2015.

Earth observation services were singled out as one of the report’s case studies.  Charity Weeden, SIA’s Senior Director of Policy, noted that revenue increased 11 percent amid a growing number of companies and partnerships getting into the business.  The report lists six companies in the “large satellite” and 16 in the “small satellite” earth observation categories.

SIA Senior Director of Policy Charity Weeden (at podium) discusses findings from 2017 State of Satellite Industry Report, July 11, 2017.  Photo credit:  tweet from Bryce Space and Technology (@BryceSpaceTech).

In 2016, of the four market segments, commercial satellite manufacturing suffered the greatest revenue loss globally — 13 percent, from $16 billion in 2015 to $13.9 billion in 2016.  Although U.S. satellite manufacturing revenue dropped from $6.6 billion to $5 billion, its share of global revenues nonetheless grew from 59 percent to 64 percent.  SIA’s report found that excluding cubesats, U.S. companies built 27 percent of the satellites launched in 2016.  If cubesats are included, U.S. companies built about 63 percent of the satellites launched.  A total of 126 satellites were launched in 2016, a significant drop from the 202 launched in 2015 due largely to delays in launches of very small satellites.

Launch industry revenues were up 2 percent, from $5.4 billion in 2015 to $5.5 billion in 2016.  The U.S. share of those global revenues was 40 percent ($2.2 billion), an increase from 34 percent in 2015. The report signals troubled times ahead for the launch industry, however.  Only 14 commercial satellite launch orders were placed in 2016, down from 33 in 2015.  Just four were won by U.S. companies, down from 15 in 2015. That count does not include 11 orders for government satellites.

Ground equipment includes network equipment (gateways, control stations, Very Small Aperture Terminals) and consumer equipment (satellite TV dishes, satellite radio equipment, satellite broadband dishes, satellite phones and mobile satellite terminals, and satellite navigation stand-alone hardware). For this segment, global revenues were up 7 percent, from $106 billion to $113.4 billion.

The report also includes data on U.S. employment in the satellite industry:  211,185 jobs in September 2016, a decrease of 1 percent from 2015.

Stroup said in a press release that the growing number of operational satellites in orbit — 1,459 at the end of 2016 compared with 1,381 a year earlier — illustrates the “need for regulators to fully understand the critical importance of satellites.  Investment and innovation rely on lawmakers maintaining a spectrum policy regime that ensures the continued reliable delivery of vital satellite services to customers now, through the next decade and beyond.”

Insatiable consumer demand for terrestrial mobile services like smartphones has created spectrum wars between companies offering terrestrial versus satellite services.  Congress and the Federal Communications Commission (FCC) are enmeshed in the debate over how to allocate spectrum effectively.

SIA is a trade association that represents the commercial satellite industry.  The report is posted on SIA’s website.

Correction:  An earlier version of this article stated revenues for satellite services and ground equipment in $millions.  The figures are in $billions and have been corrected.