LATIN AMERICA

The promise held by the Latin American region for commercial satellite transponder capacity has drawn to it a large number of participants that hope to garner a significant share of a growing market. Numerous new satellites were planned and construction contracts signed just before several Latin American nations' economies saw a downturn. With significant investments already made toward adding capacity, many operators in the region are hanging tough waiting for the economy to bounce back.

This Frost & Sullivan research examines the Latin American Commercial Geostationary Satellite Transponder Markets. It offers transponder and revenue forecasts by market segments and covers key drivers and restraints affecting market growth. It provides an in-depth analysis of the commercial, geostationary telecommunications satellite market in Latin America. It seeks to present an accurate profile of satellite transponder capacity available in the region, coupled with a detailed demand analysis for video broadcast, telephony, networking, and Internet trunking applications.

"With 15 operators serving the region and one of the lowest satellite fill rates of any region, Latin America has become a highly competitive market for satellite operators," note the analysts. This has caused the prices of transponders to decline and depressed total revenues despite some gains in the number of transponders sold. Networking applications are also becoming a key demand driver as satellite operators and terrestrial telecom providers collaborate to integrate networks and leverage each other's resources. This integration is ideal, as Latin America's topography can inherently limit penetration of terrestrial networks and submarine cables.

"Strategic alliances enable operators, manufacturers, and telecom service providers to initiate satellite services and provide a solid foundation for growth that will continue to drive the market," state the analysts. Telecom deregulation in the region has also created several market opportunities between countries since they have become more flexible in granting orbital slots and agreeing to landing rights. For instance, Brazil and Argentina are currently negotiating an agreement that will allow them to offer certain satellite services to each other.

Despite the uncertainties surrounding the satellite market in the short term, there is little doubt that Latin America holds long-term potential for the lease of satellite capacity. Latin America remains amenable to satellite-based networking applications and this growing market will benefit operators that position themselves to benefit optimally from these segments. Video broadcasting remains the cornerstone of the satellite market and no competing technology is likely to displace it.

The introduction of high-definition television is anticipated to be a strong growth driver for satellite video services, although not immediately. Its clearer picture requires more bandwidth, and therefore, more satellite capacity will be needed. "There will be challenges for all satellite operators in Latin America but those that remain alert and focus on their inherent strengths will eventually succeed," remark the analysts. Although inconsistent market behavior should be expected, overall progress within this segment is almost certain.

Identify the demand for current and future satellite applications in Latin America and the reasons for the same. The study examines and forecasts the growth potential based on the individual factors that affect the demand for the following applications: video, telephony, networking, and Internet trunking. This will enable satellite operators to monitor the demand for various products, invest marketing resources in appropriate services, and thereby, optimize their service offerings in a volatile market.

Use Frost & Sullivan's fleet tables, which give detailed, satellite-by-satellite presentation of fleets operated by satellite operators competing in Latin America. By having clear, consolidated list of active market participants in the region, satellites' capacity and their expiry periods, and other metrics, operators can plan their fleets against the competition. The market share analysis also allows operators to gauge the competition in a better manner.

Competing in Latin America has been particularly challenging since the economy took a severe downturn. The struggling economy, brought on by currency fluctuations and political volatility, presents new challenges to satellite companies that compete in the region. By understanding how the economic downturn specifically influences the satellite communications market, operators can develop strategies to grow even during difficult market conditions.

Overcapacity is one of the major reasons for the waning of satellite communications industry in Latin America, and this threatens to cripple the market over the next decade. This report provides an insight into the causes of overcapacity and market conditions that give the operator incentives to launch more capacity than required, which leads to inefficiency and lower prices.

Deregulations in the region have been one of the most important drivers of market growth in the last six years. By understanding the political trends in Latin America, companies can forecast demand in a better manner, assess the competitive environment, and find additional market opportunities.

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

Geostationary Communications Satellites: A communications satellite is a man-made object placed in orbit around the Earth to provide communication links and broadcasting services by receiving and retransmitting signals uplinked to it from the ground (or "earth") station. In a satellite network, the signals that travel up to the satellite are retransmitted by it are often referred to as the space segment of the network. The ground segment consists of the earth station that broadcasts to or receives from the satellite and also provides the interconnection between the satellite and a terrestrial network as needed.
Fixed Satellite Service (FSS): Geostationary orbit allows the satellite to stay directly above the same spot over the equator. Therefore, the satellite does not move across the sky and antennae that point at the satellite do not need to move and can be left in a fixed position. This is the origin of the term "fixed satellite services" or FSS.
Transponder: Transponder is the key element aboard the communications satellite that will receive a signal, amplify it, change the frequency, and retransmit it back towards the Earth. A satellite is composed of many transponders, each of which is set to receive a specified incoming band of frequencies. A transponder can be set to cover mostly any bandwidth, however the most typical transponder will provide 36 MHz of capacity. This is the capacity needed to broadcast one analog video channel at a predefined quality of service. Other typical bandwidths for transponders are 27 MHz, 54 MHz, and 72 MHz. In order to compare the total capacity available on a satellite, a "transponder equivalent" or TPE is defined to consist of 36MHz of capacity. Hence, a 72MHz transponder would be equal to 2 TPEs (72 MHz = 2 x 36 MHz).