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North American VSAT Market Insight : Vertical Markets Continue to Drive New Growth

  • February 2015
  • 31 pages
  • Frost & Sullivan
Report ID: 2750957

Summary

Table of Contents

Key Findings

•Despite a decreased military budget and spending, North America is anticipated to continue experiencing strong growth with a CAGR of x % over the forecast period.
•Most of this new growth can be attributed to increased demand from civilian applications that benefit from satellite’s unique strengths coupled with very small aperture terminal’s (VSAT) continually increasing performance and value.
•Certain market verticals (including oil and gas, financial institutions, and point of sale), are all experiencing growth rates beyond the average for satellite VSAT adoption and revenue generation.
•Hughes and ViaSat continue to dominate this market due to their combination of high-bandwidth satellite ownership and coverage and best-in-class VSAT equipment and services. This trend is not expected to change throughout the forecast period, although growing and upcoming market verticals will provide new potential for smaller VSAT operators with a more specialized sales approach.

Definitions

•VSAT refers to the physical size of the reflector antenna and is also loosely used to describe any fixed satellite terminal that provides one-way or two-way communication. The actual size of the antenna is dependent upon factors such as the frequency of operation, strength of the satellites’ transmissions, and its use as either a one-way or two-way terminal.
•VSAT networks typically operate at one of three frequencies, C-Band, Ku-Band, or Ka-Band. C-Band operation requires a larger satellite dish due to its lower frequency; however, it suffers less from rain attenuation. Generally, the dish size for a VSAT in the C-Band is between x and x meters, and is used mainly in Asia, Africa, and Latin America. Ku-Band-based networks can use smaller dish sizes, usually ranging from x x to x meters, but they suffer from rain attenuation in downpour situations. They are used mainly in Europe and North America. Last, Ka-Band-based networks are able to use even smaller dish sizes, but the problem of rain attenuation is magnified further at the higher frequency. VSAT networks in the Ka-Band are still in their early stages.
•This research study covers the global VSAT market for all communication services except for video distribution to enterprise users.

North America

North America is the most mature market for satellite VSAT technology. Ka-Band satellites have been utilized for over a decade in this region and two of the top VSAT providers, Hughes and ViaSat, are headquartered here. In spite of advanced wire-line and wireless networks the VSAT market in this region remains robust due to above average market awareness and acceptance, end-user/adopting organizations’ demand for total regional communications coverage and consistent network performance, and willingness to adopt satellite technology for new use-cases and market verticals.

Key Market Drivers

•Emergency communications and downed wire-line/cellular preparedness is a significant driver for satellite VSAT and for cellular or land-line operators and for corporations.
•VSAT for maritime use continues to grow as new vessels adopt satellite technology and existing satellite equipped vessels upgrade to higher performance Ku-Band or Ka-Band technology.
•Aviation/in-flight communications a relatively new, rapidly growing new market for VSAT in North America.
•Oil and gas drilling and exploration (both off-shore and on-shore) continues to be a strong, growing market for satellite communications in this region.
•The US government is still the largest adopter of satellite technology in the world. However, the US state and local governments are growing as satellite adopters/potential adopters as well.
•High-bandwidth Ka-Band technology is rapidly expanding overall satellite capabilities, and thus benefiting demanding markets, such as satellite broadband and video services.
•Decreasing service costs also continue to attract new customers to satellite technology.

Key Market Restraints

•The United States lacks a significant number of difficult to reach locations as population centers are generally far from geographically problematic locations.
•Satellite is considered high-cost when compared to other network technologies. Because most people and businesses are easily covered by cellular or landline technology, satellite is less of a necessity here.
•The United States has robust cellular and landline communications, which are rapidly expanding in both reach and performance.
•End-user bandwidth consumption habits in this region are extremely high, making many existing satellites inadequate for some applications.
•Although higher than other regions, awareness of technology/market acceptance is still low when compared to other communications technologies. This can adversely effect potential client decision making.

Global VSAT Market Comparison with North America

•North America accounts for a more significant portion of the VSAT market than any other region, despite also having more robust existing wire-line and cellular coverage than any other region.
•New satellite VSAT applications and use-cases will see adoption in North America before most other regions.

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