Nearly 200 new satellites expected to be launched in the next decade, almost double the number launched over the previous ten years. Growth will be fuelled primarily by the private sector and emerging government space programmes.
“The satellite-based Earth observation [EO] sector is in a period of transformation,” said Adam Keith, Senior Analyst at Euroconsult, “Previously, established government programmes were the dominant actors in the industry. Now we see many new projects from the private sector and emerging government space programmes. As new actors and business models emerge we are also seeing a re-shaping of the value chain.”
Euroconsult’s new report, “Satellite-Based Earth Observation, Market Prospects to 2017”, says the world manufacturing market for EO satellites will grow from $14.8 billion to $16.9 billion, a 14 per cent increase. Historically dominant government programmes including NASA, the European Space Agency and France and India's space agencies will remain in the lead actors in terms of number of satellites to be launched. They are expected to launch 54 satellites between 2007 and 2016, relatively flat compared with the past decade, when 53 satellites were launched.
And their share of total satellites to be launched will drop from 77 per cent to 36 per cent in the next ten years.
A number of countries have recently established national space agencies or dedicated entities to manage their programmes, or are planning to do so. They are developing small EO platforms to rapidly acquire space technology, primarily to meet specific local and regional needs such as disaster management, natural resource monitoring and infrastructure planning.
The emergence of such programmes is one factor pushing the industry toward smaller, lighter, and less expensive satellites. Emerging countries are also looking to develop technology-transfer partnerships with larger counterparts, for example the EADS Astrium agreement with Algeria.
From 2007 to 2016, 29 Earth observation satellites will be ordered by private satellite operators, representing 19 per cent of launches during the period. This compares with a 7 per cent share, or five satellites, during the previous decade.
Strong direct or indirect government backing has been a key success factor in the business model of these private ventures. For example, DigitalGlobe and GeoEye, both US companies, benefited from the US Department of Defense contracts that enabled them to get an early start and establish leadership positions as data providers. Both companies have gone on to fund their growth through more traditional private sector financing methods. GeoEye is now quoted on NASDAQ, while DigitalGlobe is supported by private investors including an investment bank, and companies inside and outside the sector.
A third private EO satellite operator, ImageSat, is a Netherlands Antilles company owned 46 per cent by Israel Aircraft Industries Ltd, a quasi-governmental entity, 14 per cent by a subsidiary of Elbit Systems and the remainder by minority shareholders.
In Europe, Public Private Partnership is the preferred model for developing commercial ventures, with both RapidEye and TerraSAR-X funded by a mix of government funding and private financing.
Euroconsult says the development of the private sector will fuel the growth of the data sales market. From a base of $735 million in revenues in 2007, data sales are expected to grow around 15 per cent a year over the next ten years, reaching about $3 billion in 2017.
Satellite systems are increasingly able to deliver tailored data products to public and private customers. Simultaneously, consumer products such as GoogleEarth and Microsoft Virtual Earth are raising awareness of Earth observation capabilities, creating demand for services and driving innovation. They are also providing a new model for data distribution via the internet.