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Analysis of the global satellite backhaul market april 2015

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Boaz Rein
Boaz Rein

The document analyzes the global satellite backhaul market. It finds that economic growth in China and India is driving new demand for satellite services to connect remote locations that traditional backhaul technologies cannot reach. The satellite backhaul market is expected to grow to $420.56 million by 2020, with the Asia Pacific region experiencing the highest growth due to connecting more people than any other region. Major satellite companies like Hughes, Gilat, and Intelsat dominate the market globally.

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Analysis of the Global Satellite Backhaul Market Economic Growth in China and India Drives New Demand for Satellite Services April 2015 9ABF-66
9ABF-66 2 Contents Section ºÝºÝߣ Number Executive Summary 3 Definitions 8 Satellite Backhaul Analysis 10 Regional Analysis 14 The Last Word 25 The Frost & Sullivan Story 28
9ABF-66 3 Return to contents Executive Summary
9ABF-66 4 • 2G and 3G cellular services continue to drive global cellular expansion due to the high quality of services for voice capabilities (2G) and high-bandwidth data capabilities (3G). However, many remote or difficult to cover locations around the world remain unconnected. This is due to the expense associated with expanding traditional backhaul technologies (fiber and microwave) over vast distances and adverse geological conditions. • Mountainous regions, vast landscapes without infrastructure, water bodies, and densely forested barriers contribute to the difficulty of expanding fiber technology or achieving line of sight (LOS) with minimal hops for microwave technology. As a result, satellite technology (primarily Ku- and Ka-band) is currently favored by cellular operators as the technology of choice for quickly and efficiently connecting remote locations. • Other vertical markets and use-cases also have a significant impact on the growing need for satellite backhaul to enable cellular connectivity. The growing mobile workforce and the need to always remain connected are directly influencing the need to expand cellular networks to previously unconnected locations. • Oil and gas drilling and exploration, as well as other in-the-field jobs continue to have a similar effect on the industry. These solutions often include mobile cellular towers that can be transported from one site to another to quickly enable connectivity in any location around the world. Source: Frost & Sullivan Executive Summary (continued)
9ABF-66 5 Executive Summary (continued) Source: Frost & Sullivan • Emergency and backup communications are a growing application for satellite backhaul services; particularly in locations which already have significant cellular connectivity. These solutions are typically owned and operated by the cellular operators themselves, coupling mobile cell-towers with a satellite backhaul solution, which can typically be transported via a van or a large truck. • These mobile solutions will continue to grow in importance as natural and man-made disasters often disrupt or disable cellular connectivity, leaving people in the dark and without any communication. • Portable solutions such as these are not only used for emergency situations but planned events as well, aiding the existing, traditional cellular technologies by offloading some of the traffic. When events are planned, and if the location has a significant population density, mobile satellite solutions can be brought in to prevent degradation of service, loss of service, and slow performance or decreased end-user experience.
9ABF-66 6 Executive Summary (continued) Source: Frost & Sullivan • With a low CAGR of 0.7%, North America has the lowest demand for satellite backhaul due to its industry leading land-line and cellular networks. • Latin America is significantly larger than North America, and is expected at a strong CAGR of 4.5% during the forecast period. • Due to the diversity in governments, economic performance, and existing infrastructure, the EMEA region is expected to grow a modest $7 million over the next 7 years. • APAC currently leads the satellite backhaul market with a CAGR of 6% due to the growing economies and the need to connect more people than any other region. • The ROW region includes many locations that would benefit from satellite technology. However, cost and current economic performance of these locations have limited adoption to a CAGR of 3.9% during the forecast period. • Hughes, Gilat, and Intelsat continue to drive the satellite backhaul market globally due to their vast global footprints, high-performance technology, and the ability to fulfill large-scale communications projects at the country level.
9ABF-66 7 Frequency Band Potential for Mobile Satellite ApplicationsBandwidth Cost for Service Ku Ka C X S&L Ideal bandwidth and price. However, antenna size limits its usefulness for mobile applications. It has potential, mostly in the government market (for which X band is typically used). Main drawback is price, and the speed is unnecessary for most mobile applications. Ku is versatile and may be used where more bandwidth is needed (although Ku congestion could limit the push for high-volume Ku M2M). Low cost and low bandwidth make both S & L bands ideal for M2M applications. Due to the high-quality of service/high bandwidth, Ka- and Ku-band satellite technologies are most commonly used for backhaul applications. Source: Frost & Sullivan
9ABF-66 8 Return to contents Definitions
9ABF-66 9 Definitions • VSAT or very small aperture terminal refers to any fixed, two-way satellite communications technology that utilizes C-band, Ku-band, or Ka-band frequencies. Thus, VSAT ranges drastically in dish size, power needs, bandwidth, and interference from weather. • Frequency ranges for these technologies increased from C-band to Ku-band and Ka-band. Therefore, Ka-band has the most bandwidth, but it also suffers from the most rain attenuation; while C-Band is at the opposite end of the spectrum (and Ku-Band is in between). • Cellular network technologies such as HSPA+, EVDO Rev A, and LTE are used to connect modern mobile devices with voice, SMS, and data services. These technologies are backhauled by different technologies, which may include satellite, depending on the conditions of the cell-tower deployment. • Satellite backhaul in this research refers to satellite services which are used to enable cellular communications. Satellite services for this application are typically Ku- or Ka-band VSAT satellite technology. Cellular technologies backhauled by Ku- and Ka-band satellite technology typically consist of 2G and 3G technologies (for both voice and data), and sometimes 4G. Additionally, satellite backhaul can either be used as a permanent means for connecting cell towers in some areas or as a temporary measure to expand networks—to supplement existing networks, to enable communications in remote locations as needed, or to enable communications in emergency situations. • This research covers VSAT technology which is used as backhaul for cellular 2G, 3G, and 4G technologies. Source: Frost & Sullivan
9ABF-66 10 Return to contents Satellite Backhaul Analysis
9ABF-66 11 Revenue Forecast 0.00 100.00 200.00 300.00 400.00 500.00 600.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 319.03 328.73 339.84 352.72 367.33 383.38 401.14 420.56 Revenue($Million) Year • The satellite backhaul market is anticipated to grow by $101.53 million from 2013 to 2020. • Forecasts in this research were calculated from primary and secondary sources for the VSAT market, coupled with regional trends, economics, and existing communication technology penetration. Total Satellite Backhaul Market: Revenue Forecast, Global, 2013–2020 CAGR (2014–2020): 4.2% Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
9ABF-66 12 Market Share Intelsat 17.0% SES 9.4% Eutelsat 5.5% Hughes/Echostar 26.3% Gilat/Spacenet 15.9% ViaSat 4.8% iDirect 7.6% Others* 13.6% Total Satellite Backhaul Market: Percent of Revenue, Global, 2014 *Others include Isotropics, Infotech, Mainstream Data, Data Technology Solutions, and X2nSat Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
9ABF-66 13 Global Satellite Backhaul Discussion The satellite backhaul market is growing steadily with a global CAGR of 4.2%. Much of this growth comes from China, India, Russia, Latin America, and the Middle East. Unlike most other satellite related markets, North America does not have a large presence in this market due to a lack of significant need for alternative backhaul technologies. This is due to the robust existing infrastructure of the region and lack of remote/difficult to connect locations. Hughes, Gilat, and IntelSat continue to dominate this market due to their global reach, high-bandwidth/high-quality of service, competitive pricing, and industry reputation. Ensuring a global footprint, physical presence, and expertise within adopting and potential adopting countries are becoming increasingly important for new revenue growth for satellite-enabled cellular backhaul. Source: Frost & Sullivan
9ABF-66 14 Return to contents Regional Analysis
9ABF-66 15 North America—Revenue Forecast Due to a lack of necessity from robust existing landline and cellular networks, North America will experience only a slight growth during the forecast period. 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 3.19 3.22 3.24 3.27 3.29 3.31 3.33 3.35 Revenue($Million) Year Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, North America, 2013–2020 CAGR (2014–2020): 0.7%
9ABF-66 16 North America—Revenue Forecast Discussion • North America, particularly the US, has the most robust existing landline and cellular network infrastructure globally. Thus, the demand for satellite backhaul for cellular services is extremely limited in this region, resulting in the lowest overall revenue potential and CAGR. • Despite the limited demand, satellite is used to backhaul cellular services in some remote locations in Alaska and Canada. • Additionally, satellite is often used for emergency backhaul scenarios for cellular operators in this region. • The vast majority of satellite backhaul applications used for cellular network expansion are in Canada and Alaska. There are a few examples of this use case in the United States. Source: Frost & Sullivan
9ABF-66 17 Latin America—Revenue Forecast 0.00 20.00 40.00 60.00 80.00 100.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 52.80 54.20 55.89 58.12 60.68 63.62 66.93 70.61 Revenue($Million) Year Although cost and return on investment (ROI) can be a barrier in this region, satellite backhaul is expected to increase by almost 18 million from 2013 to 2020. Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, Latin America, 2013–2020 CAGR (2014–2020): 4.5%
9ABF-66 18 Latin America—Revenue Forecast Discussion • Latin America includes many locations that are underserved by existing network technologies. Thus, unlike North America, there is a significant need for satellite technology to enable cellular communications in some towns and cities. • More importantly, many of these towns and cities are experiencing economic growth, either from manufacturing or from oil and gas drilling and exploration. Therefore, the need to connect more of Latin America is growing in multiple ways, and cost is becoming less of a barrier. • In addition to the oil and gas market throughout Latin America, Mexico is experiencing significant economic growth from manufacturing for a variety of markets. This increase in revenue and lack of substantial existing networks make satellite an ideal choice for increasing connectivity. • Political unrest in this region currently could potentially slow down the adoption of satellite backhaul due to a shift in regional focus/priorities. Source: Frost & Sullivan
9ABF-66 19 Europe—Revenue Forecast 0.00 20.00 40.00 60.00 80.00 100.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 84.19 85.20 86.25 87.35 88.49 89.65 90.87 92.10 Revenue($Million) Year Similar to North America, the European region has excellent existing landline and cellular communications networks which limit the potential for satellite. Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, Europe, 2013–2020 CAGR (2014–2020): 1.3%
9ABF-66 20 Europe—Revenue Forecast Discussion • Although Europe has robust existing landline and cellular networks, the diversity of government/local economics and geographical characteristics has created a need for satellite technology. • Similar to North America, satellite is most often used as a backup technology for carriers or as a means for supplementing existing cellular networks which might be overburdened due to events in locations that create vastly more network traffic than normal. • Additionally, Russia is quickly becoming a prime candidate for many satellite services, including satellite backhaul. Due to the expansiveness of this country and the need to increase connectivity, it is expected to be the primary driver for new satellite backhaul growth. Source: Frost & Sullivan
9ABF-66 21 APAC—Revenue Forecast 0.00 50.00 100.00 150.00 200.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 122.54 127.93 134.26 141.53 149.99 159.29 169.72 181.26 Revenue($Million) Year With a CAGR of 6%, APAC continues to drive growth in the satellite backhaul market. Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, APAC, 2013–2020 CAGR (2014–2020): 6.0%
9ABF-66 22 APAC—Revenue Forecast Discussion • The Asia-Pacific region includes the quickest growing economies in the world. In addition, the existing landline and cellular infrastructure is inferior to most of North America and EMEA. Therefore, satellite backhaul has significant potential in this region. • Economic growth will be the largest driving factor in this region, with China and India comprising the majority of new growth for satellite services. • Additionally, as many locations with communications deficit are densely populated, satellite backhaul projects in this region are often far larger in bandwidth and subsequent revenue than any other region. • Australia is another quick growing region for satellite backhaul adoption. Although Australia is not experiencing the same economic boom as China and India, the remoteness of many towns and populated areas is driving demand. Source: Frost & Sullivan
9ABF-66 23 ROW—Revenue Forecast 0.00 20.00 40.00 60.00 80.00 100.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 56.31 58.18 60.19 62.46 64.88 67.51 70.29 73.23 Revenue($Million) Year The rest of world (ROW) region is experiencing strong growth for satellite backhaul due to the remoteness of many populated areas. Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, ROW, 2013–2020 CAGR (2014–2020): 3.9%
9ABF-66 24 ROW—Revenue Forecast Discussion • The rest of world (ROW) region includes countries with the least amount of adequate existing network infrastructure. These countries vary considerably in economic growth and performance, and therefore they have inconsistent levels of satellite need and adoption capabilities. • In this region, shear necessity for enabling communications to remote towns and cities will drive adoption. There is not yet a market for emergency cellular backup or supplemental coverage as POP coverage is currently so low that expansion is the driving factor. • Africa is notable in the ROW region due to the extremely low level of existing landline and cellular communications coupled with vast distances between populated areas. Source: Frost & Sullivan
Return to contents 9ABF-66 25 The Last Word
9ABF-66 26 The Last Word—3 Big Predictions 2 Improving economic conditions in locations where existing landline and cellular infrastructure is lacking continue to be the largest driver for satellite backhaul. 3 Disaster preparedness and temporary supplemental coverage prevent satellite backhaul from declining in locations nearing 100% POP coverage for their cellular networks. 1 Ku- and Ka-band satellite frequencies continue to evolve and expand the capabilities for satellite, making VSAT a growing technology for backhaul services. Source: Frost & Sullivan
9ABF-66 27 Legal Disclaimer Frost & Sullivan takes no responsibility for any incorrect information supplied to us by manufacturers or users. Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan research services are limited publications containing valuable market information provided to a select group of customers. Our customers acknowledge, when ordering or downloading, that Frost & Sullivan research services are for customers’ internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold or disclosed to noncustomers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher. For information regarding permission, write to: Frost & Sullivan 331 E. Evelyn Ave. Suite 100 Mountain View, CA 94041 © 2015 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
9ABF-66 28 Return to contents The Frost & Sullivan Story The Journey to Visionary Innovation
9ABF-66 29 The Frost & Sullivan Story
9ABF-66 30 Value Proposition: Future of Your Company & Career Our 4 Services Drive Each Level of Relative Client Value
9ABF-66 31 Global Perspective 40+ Offices Monitoring for Opportunities and Challenges
9ABF-66 32 Industry Convergence Comprehensive Industry Coverage Sparks Innovation Opportunities Automotive & Transportation Aerospace & Defense Measurement & Instrumentation Information & Communication Technologies HealthcareEnvironment & Building Technologies Energy & Power Systems Chemicals, Materials & Food Electronics & Security Industrial Automation & Process Control Automotive Transportation & Logistics Consumer Technologies Minerals & Mining
9ABF-66 33 360º Research Perspective Integration of 7 Research Methodologies Provides Visionary Perspective
9ABF-66 34 Implementation Excellence Leveraging Career Best Practices to Maximize Impact
9ABF-66 35 Our Blue Ocean Strategy Collaboration, Research, and Vision Sparks Innovation

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Analysis of the global satellite backhaul market april 2015

  • 1. Analysis of the Global Satellite Backhaul Market Economic Growth in China and India Drives New Demand for Satellite Services April 2015 9ABF-66
  • 2. 9ABF-66 2 Contents Section ºÝºÝߣ Number Executive Summary 3 Definitions 8 Satellite Backhaul Analysis 10 Regional Analysis 14 The Last Word 25 The Frost & Sullivan Story 28
  • 3. 9ABF-66 3 Return to contents Executive Summary
  • 4. 9ABF-66 4 • 2G and 3G cellular services continue to drive global cellular expansion due to the high quality of services for voice capabilities (2G) and high-bandwidth data capabilities (3G). However, many remote or difficult to cover locations around the world remain unconnected. This is due to the expense associated with expanding traditional backhaul technologies (fiber and microwave) over vast distances and adverse geological conditions. • Mountainous regions, vast landscapes without infrastructure, water bodies, and densely forested barriers contribute to the difficulty of expanding fiber technology or achieving line of sight (LOS) with minimal hops for microwave technology. As a result, satellite technology (primarily Ku- and Ka-band) is currently favored by cellular operators as the technology of choice for quickly and efficiently connecting remote locations. • Other vertical markets and use-cases also have a significant impact on the growing need for satellite backhaul to enable cellular connectivity. The growing mobile workforce and the need to always remain connected are directly influencing the need to expand cellular networks to previously unconnected locations. • Oil and gas drilling and exploration, as well as other in-the-field jobs continue to have a similar effect on the industry. These solutions often include mobile cellular towers that can be transported from one site to another to quickly enable connectivity in any location around the world. Source: Frost & Sullivan Executive Summary (continued)
  • 5. 9ABF-66 5 Executive Summary (continued) Source: Frost & Sullivan • Emergency and backup communications are a growing application for satellite backhaul services; particularly in locations which already have significant cellular connectivity. These solutions are typically owned and operated by the cellular operators themselves, coupling mobile cell-towers with a satellite backhaul solution, which can typically be transported via a van or a large truck. • These mobile solutions will continue to grow in importance as natural and man-made disasters often disrupt or disable cellular connectivity, leaving people in the dark and without any communication. • Portable solutions such as these are not only used for emergency situations but planned events as well, aiding the existing, traditional cellular technologies by offloading some of the traffic. When events are planned, and if the location has a significant population density, mobile satellite solutions can be brought in to prevent degradation of service, loss of service, and slow performance or decreased end-user experience.
  • 6. 9ABF-66 6 Executive Summary (continued) Source: Frost & Sullivan • With a low CAGR of 0.7%, North America has the lowest demand for satellite backhaul due to its industry leading land-line and cellular networks. • Latin America is significantly larger than North America, and is expected at a strong CAGR of 4.5% during the forecast period. • Due to the diversity in governments, economic performance, and existing infrastructure, the EMEA region is expected to grow a modest $7 million over the next 7 years. • APAC currently leads the satellite backhaul market with a CAGR of 6% due to the growing economies and the need to connect more people than any other region. • The ROW region includes many locations that would benefit from satellite technology. However, cost and current economic performance of these locations have limited adoption to a CAGR of 3.9% during the forecast period. • Hughes, Gilat, and Intelsat continue to drive the satellite backhaul market globally due to their vast global footprints, high-performance technology, and the ability to fulfill large-scale communications projects at the country level.
  • 7. 9ABF-66 7 Frequency Band Potential for Mobile Satellite ApplicationsBandwidth Cost for Service Ku Ka C X S&L Ideal bandwidth and price. However, antenna size limits its usefulness for mobile applications. It has potential, mostly in the government market (for which X band is typically used). Main drawback is price, and the speed is unnecessary for most mobile applications. Ku is versatile and may be used where more bandwidth is needed (although Ku congestion could limit the push for high-volume Ku M2M). Low cost and low bandwidth make both S & L bands ideal for M2M applications. Due to the high-quality of service/high bandwidth, Ka- and Ku-band satellite technologies are most commonly used for backhaul applications. Source: Frost & Sullivan
  • 8. 9ABF-66 8 Return to contents Definitions
  • 9. 9ABF-66 9 Definitions • VSAT or very small aperture terminal refers to any fixed, two-way satellite communications technology that utilizes C-band, Ku-band, or Ka-band frequencies. Thus, VSAT ranges drastically in dish size, power needs, bandwidth, and interference from weather. • Frequency ranges for these technologies increased from C-band to Ku-band and Ka-band. Therefore, Ka-band has the most bandwidth, but it also suffers from the most rain attenuation; while C-Band is at the opposite end of the spectrum (and Ku-Band is in between). • Cellular network technologies such as HSPA+, EVDO Rev A, and LTE are used to connect modern mobile devices with voice, SMS, and data services. These technologies are backhauled by different technologies, which may include satellite, depending on the conditions of the cell-tower deployment. • Satellite backhaul in this research refers to satellite services which are used to enable cellular communications. Satellite services for this application are typically Ku- or Ka-band VSAT satellite technology. Cellular technologies backhauled by Ku- and Ka-band satellite technology typically consist of 2G and 3G technologies (for both voice and data), and sometimes 4G. Additionally, satellite backhaul can either be used as a permanent means for connecting cell towers in some areas or as a temporary measure to expand networks—to supplement existing networks, to enable communications in remote locations as needed, or to enable communications in emergency situations. • This research covers VSAT technology which is used as backhaul for cellular 2G, 3G, and 4G technologies. Source: Frost & Sullivan
  • 10. 9ABF-66 10 Return to contents Satellite Backhaul Analysis
  • 11. 9ABF-66 11 Revenue Forecast 0.00 100.00 200.00 300.00 400.00 500.00 600.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 319.03 328.73 339.84 352.72 367.33 383.38 401.14 420.56 Revenue($Million) Year • The satellite backhaul market is anticipated to grow by $101.53 million from 2013 to 2020. • Forecasts in this research were calculated from primary and secondary sources for the VSAT market, coupled with regional trends, economics, and existing communication technology penetration. Total Satellite Backhaul Market: Revenue Forecast, Global, 2013–2020 CAGR (2014–2020): 4.2% Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
  • 12. 9ABF-66 12 Market Share Intelsat 17.0% SES 9.4% Eutelsat 5.5% Hughes/Echostar 26.3% Gilat/Spacenet 15.9% ViaSat 4.8% iDirect 7.6% Others* 13.6% Total Satellite Backhaul Market: Percent of Revenue, Global, 2014 *Others include Isotropics, Infotech, Mainstream Data, Data Technology Solutions, and X2nSat Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
  • 13. 9ABF-66 13 Global Satellite Backhaul Discussion The satellite backhaul market is growing steadily with a global CAGR of 4.2%. Much of this growth comes from China, India, Russia, Latin America, and the Middle East. Unlike most other satellite related markets, North America does not have a large presence in this market due to a lack of significant need for alternative backhaul technologies. This is due to the robust existing infrastructure of the region and lack of remote/difficult to connect locations. Hughes, Gilat, and IntelSat continue to dominate this market due to their global reach, high-bandwidth/high-quality of service, competitive pricing, and industry reputation. Ensuring a global footprint, physical presence, and expertise within adopting and potential adopting countries are becoming increasingly important for new revenue growth for satellite-enabled cellular backhaul. Source: Frost & Sullivan
  • 14. 9ABF-66 14 Return to contents Regional Analysis
  • 15. 9ABF-66 15 North America—Revenue Forecast Due to a lack of necessity from robust existing landline and cellular networks, North America will experience only a slight growth during the forecast period. 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 3.19 3.22 3.24 3.27 3.29 3.31 3.33 3.35 Revenue($Million) Year Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, North America, 2013–2020 CAGR (2014–2020): 0.7%
  • 16. 9ABF-66 16 North America—Revenue Forecast Discussion • North America, particularly the US, has the most robust existing landline and cellular network infrastructure globally. Thus, the demand for satellite backhaul for cellular services is extremely limited in this region, resulting in the lowest overall revenue potential and CAGR. • Despite the limited demand, satellite is used to backhaul cellular services in some remote locations in Alaska and Canada. • Additionally, satellite is often used for emergency backhaul scenarios for cellular operators in this region. • The vast majority of satellite backhaul applications used for cellular network expansion are in Canada and Alaska. There are a few examples of this use case in the United States. Source: Frost & Sullivan
  • 17. 9ABF-66 17 Latin America—Revenue Forecast 0.00 20.00 40.00 60.00 80.00 100.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 52.80 54.20 55.89 58.12 60.68 63.62 66.93 70.61 Revenue($Million) Year Although cost and return on investment (ROI) can be a barrier in this region, satellite backhaul is expected to increase by almost 18 million from 2013 to 2020. Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, Latin America, 2013–2020 CAGR (2014–2020): 4.5%
  • 18. 9ABF-66 18 Latin America—Revenue Forecast Discussion • Latin America includes many locations that are underserved by existing network technologies. Thus, unlike North America, there is a significant need for satellite technology to enable cellular communications in some towns and cities. • More importantly, many of these towns and cities are experiencing economic growth, either from manufacturing or from oil and gas drilling and exploration. Therefore, the need to connect more of Latin America is growing in multiple ways, and cost is becoming less of a barrier. • In addition to the oil and gas market throughout Latin America, Mexico is experiencing significant economic growth from manufacturing for a variety of markets. This increase in revenue and lack of substantial existing networks make satellite an ideal choice for increasing connectivity. • Political unrest in this region currently could potentially slow down the adoption of satellite backhaul due to a shift in regional focus/priorities. Source: Frost & Sullivan
  • 19. 9ABF-66 19 Europe—Revenue Forecast 0.00 20.00 40.00 60.00 80.00 100.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 84.19 85.20 86.25 87.35 88.49 89.65 90.87 92.10 Revenue($Million) Year Similar to North America, the European region has excellent existing landline and cellular communications networks which limit the potential for satellite. Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, Europe, 2013–2020 CAGR (2014–2020): 1.3%
  • 20. 9ABF-66 20 Europe—Revenue Forecast Discussion • Although Europe has robust existing landline and cellular networks, the diversity of government/local economics and geographical characteristics has created a need for satellite technology. • Similar to North America, satellite is most often used as a backup technology for carriers or as a means for supplementing existing cellular networks which might be overburdened due to events in locations that create vastly more network traffic than normal. • Additionally, Russia is quickly becoming a prime candidate for many satellite services, including satellite backhaul. Due to the expansiveness of this country and the need to increase connectivity, it is expected to be the primary driver for new satellite backhaul growth. Source: Frost & Sullivan
  • 21. 9ABF-66 21 APAC—Revenue Forecast 0.00 50.00 100.00 150.00 200.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 122.54 127.93 134.26 141.53 149.99 159.29 169.72 181.26 Revenue($Million) Year With a CAGR of 6%, APAC continues to drive growth in the satellite backhaul market. Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, APAC, 2013–2020 CAGR (2014–2020): 6.0%
  • 22. 9ABF-66 22 APAC—Revenue Forecast Discussion • The Asia-Pacific region includes the quickest growing economies in the world. In addition, the existing landline and cellular infrastructure is inferior to most of North America and EMEA. Therefore, satellite backhaul has significant potential in this region. • Economic growth will be the largest driving factor in this region, with China and India comprising the majority of new growth for satellite services. • Additionally, as many locations with communications deficit are densely populated, satellite backhaul projects in this region are often far larger in bandwidth and subsequent revenue than any other region. • Australia is another quick growing region for satellite backhaul adoption. Although Australia is not experiencing the same economic boom as China and India, the remoteness of many towns and populated areas is driving demand. Source: Frost & Sullivan
  • 23. 9ABF-66 23 ROW—Revenue Forecast 0.00 20.00 40.00 60.00 80.00 100.00 2013 2014 2015 2016 2017 2018 2019 2020 Revenue 56.31 58.18 60.19 62.46 64.88 67.51 70.29 73.23 Revenue($Million) Year The rest of world (ROW) region is experiencing strong growth for satellite backhaul due to the remoteness of many populated areas. Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan Satellite Backhaul Market: Revenue Forecast, ROW, 2013–2020 CAGR (2014–2020): 3.9%
  • 24. 9ABF-66 24 ROW—Revenue Forecast Discussion • The rest of world (ROW) region includes countries with the least amount of adequate existing network infrastructure. These countries vary considerably in economic growth and performance, and therefore they have inconsistent levels of satellite need and adoption capabilities. • In this region, shear necessity for enabling communications to remote towns and cities will drive adoption. There is not yet a market for emergency cellular backup or supplemental coverage as POP coverage is currently so low that expansion is the driving factor. • Africa is notable in the ROW region due to the extremely low level of existing landline and cellular communications coupled with vast distances between populated areas. Source: Frost & Sullivan
  • 25. Return to contents 9ABF-66 25 The Last Word
  • 26. 9ABF-66 26 The Last Word—3 Big Predictions 2 Improving economic conditions in locations where existing landline and cellular infrastructure is lacking continue to be the largest driver for satellite backhaul. 3 Disaster preparedness and temporary supplemental coverage prevent satellite backhaul from declining in locations nearing 100% POP coverage for their cellular networks. 1 Ku- and Ka-band satellite frequencies continue to evolve and expand the capabilities for satellite, making VSAT a growing technology for backhaul services. Source: Frost & Sullivan
  • 27. 9ABF-66 27 Legal Disclaimer Frost & Sullivan takes no responsibility for any incorrect information supplied to us by manufacturers or users. Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan research services are limited publications containing valuable market information provided to a select group of customers. Our customers acknowledge, when ordering or downloading, that Frost & Sullivan research services are for customers’ internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold or disclosed to noncustomers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher. For information regarding permission, write to: Frost & Sullivan 331 E. Evelyn Ave. Suite 100 Mountain View, CA 94041 © 2015 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  • 28. 9ABF-66 28 Return to contents The Frost & Sullivan Story The Journey to Visionary Innovation
  • 29. 9ABF-66 29 The Frost & Sullivan Story
  • 30. 9ABF-66 30 Value Proposition: Future of Your Company & Career Our 4 Services Drive Each Level of Relative Client Value
  • 31. 9ABF-66 31 Global Perspective 40+ Offices Monitoring for Opportunities and Challenges
  • 32. 9ABF-66 32 Industry Convergence Comprehensive Industry Coverage Sparks Innovation Opportunities Automotive & Transportation Aerospace & Defense Measurement & Instrumentation Information & Communication Technologies HealthcareEnvironment & Building Technologies Energy & Power Systems Chemicals, Materials & Food Electronics & Security Industrial Automation & Process Control Automotive Transportation & Logistics Consumer Technologies Minerals & Mining
  • 33. 9ABF-66 33 360º Research Perspective Integration of 7 Research Methodologies Provides Visionary Perspective
  • 34. 9ABF-66 34 Implementation Excellence Leveraging Career Best Practices to Maximize Impact
  • 35. 9ABF-66 35 Our Blue Ocean Strategy Collaboration, Research, and Vision Sparks Innovation