Interesting article from Merrill Lynch, sees satellite industry growing at 17% a year for the next decade from $38B to $171B in 2007.
NEW YORK, NEW YORK, U.S.A., 1998 APR 28 (NB) -- By Bill Pietrucha,
Newsbytes. Satellite television, mobile telephony, and multimedia
applications will help satellite industry revenues grow at an annual
rate of some 17 percent over the next decade, according to a report
recently released by Merrill Lynch US Fundamental Equity Research.
That 17 percent annual revenue increase will be enough to push
total satellite industry revenues more than four and a half times the
$38 billion the industry received in 1997, to $171 billion by 2007,
the report predicts.
"Over the last 12 months, the global satellite industry has shown
strong growth and produced outstanding returns," Merrill Lynch US
Fundamental Equity Research vice president Thomas Watts said. "The
challenge for 1998/99 will be to continue to meet investors' current
expectations while fulfilling the industry's dreams of meeting mass
market demands."
According to the report, at least four new satellite services will
begin operating over the next year, including global satellite
telephony, or Big Low Earth Orbit (LEO); global satellite data
(Little LEOs); satellite radio; and one meter satellite imaging.
Existing companies also should either reach their cash flow break-
even points, or start the transition from non-profit agencies into
profit-motivated public companies, the report states.
Watts said that, along with continued steady growth, the market will
be driven by "the dramatic expansion" of satellite television (DTH),
mobile satellite telephony (MSS) and multimedia. The Merrill Lynch
report suggests that ten key satellite developments that are expected
to take place in the next year.
These developments, he said, "will be sign posts to the industry's
near-term prosperity."
Among the upcoming sign posts are: an increased usage of direct
satellite television, after three years of disappointing linear growth;
the emergence of other mass market services such as Internet access
and broadcast radio; finding the right product formulas for multimedia
usage; the economic downturn in Asia weakening many local partners and
creating opportunities for consolidation; and the awarding of major
contracts that could re-align the satellite manufacturing industry.
Watts said other sign posts include: the launch of new mass market
satellite telephony services, such as Iridium and Globalstar; the
development of many smaller niche opportunities, such as satellite
mobile data, and satellite imaging; the transformation of at least
parts of Intelsat, Inmarsat, and Eutelsat from treaty-based non-
governmental organizations to for-profit companies; and a decrease
in space access costs due to new low cost launch vehicles.
The Merrill Lynch report also noted that the industry soon should
see the consolidation of satellites into an investment sector. This
sector, currently holding 21 companies with a total worth of around
$80 billion, should expand beyond 30 companies within the next
three years, the report said.
The report, available from Merrill Lynch, also contains a detailed
industry outlook, which evaluates the prospects of eleven industry
segments, and complete investment summaries of many of the
satellite companies that Merrill Lynch follows.
Reported by Newsbytes News Network: newsbytes.com |
