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India’s satcom sector set to grow at over 6% yearly until 2023

DTH pay-TV, VSAT boost sector while cellular backhaul market sees strong uptake with arrival of HTS systems

According to Euroconsult’s newly released report, India’s satellite communication sector has experienced significant growth over the past five years, driven by explosive demand from direct-to-home (DTH) pay-TV platforms and the growing telecommunication needs in the country.

The satcom value chain is strongly influenced by the Indian Space and Research Organisation (ISRO) that is present all along the value chain, including satellite manufacturing, launch, satellite operations and regulations.

On the manufacturing level, roughly half of the country’s satellite manufacturing sector spending is currently dedicated to developing communications satellites.

“While ISRO dominates the satcom manufacturing landscape, outsourcing to foreign and national companies will continue to provide growth opportunities for a number of players with hundreds of millions of dollars to be outsourced from 2013-2021,” says Deepu Krishnan, Senior Consultant at Euroconsult.

Satellite capacity demand from DTH broadcasting grew at a compound annual growth rate (CAGR) of more than 7% from 2008-2013, now representing 32% of the country’s total commercial satellite capacity usage. TV distribution services to cable operators and VSAT enterprise networks have equally seen growing demand in recent years, leading to an increasing number of players now operating in the country’s teleport and VSAT service market.

The cellular backhaul market in particular has begun to see strong take-up in India with the arrival of HTS systems such as IpStar, but also government-backed networks connecting schools and remote villages. The HTS systems are currently growing with increasing capacity needs. Alongside satellite services, the annual satellite ground equipment market has also seen growth, generating USD 40 million in equipment revenue in 2012, dominated by international ground terminal manufacturers.

While domestic operator ISRO/Antrix enjoys significant regulatory advantages in the market, only a proportion of the commercial demand for satellite capacity is being met by domestic capacity today, with the majority being provided by foreign satellite operators. Regulatory barriers and capacity supply constraints still challenge market growth.

“Changes in the country’s satcom policy, which is expected to be released in 2014, should bring positive changes and contribute to additional growth in satcom markets over the coming years, in particular for services using Ku-band capacity from foreign operators,” says Krishnan.

In total, demand for regular C- and Ku-band capacity is expected to grow at 6% per annum between 2013 and 2023 in addition to new demand for satcom services using HTS systems that should see strong take up towards the end of the decade.