Northern Sky Research

Asian EO Markets Shifting Astrium Attention Eastward

Oct 26th, 2011 by Claude Rousseau   More from this Analyst | Profile

After receiving a hit with very few contracts from the U.S. Government’s National GeoSpatial Intelligence Agency (NGA), Europe’s largest EO data provider, EADS Astrium, seems to have set sail east to Asia where demand for EO satellites and imagery is growing across the board.

Driven by intensifying needs for intelligence, surveillance and reconnaissance to keep an ‘eye’ on possible threats from terrorists of possible conflict areas, NSR expects that yearly data market revenues will grow the most in Asia in the next ten years. In particular, high-resolution imagery, which represented almost 60% of data revenues last year, will grow at a 10% compound annual growth rate in Asia. As European and Asian operators will have sub-meter imagery satellites in the coming years, EADS Astrium and its GIS division are positioning themselves to get a good piece of the action with a strong focus on emerging markets such as Asia.

Recent Asian contract awards to EADS Astrium for satellites, data and value-added services have confirmed the dominance of the company in the regional EO market. In its recent Global Satellite-Based Earth Observation, 3rd Edition report, NSR pegged Astrium GIS’ market share at 39% among all satellites operator revenues in the region. It is well-known that among the top three EO operators, Astrium GIS is more diversified across the globe in terms of revenues and also ground segment components.

Following the NGA’s EnhancedView optical data contract awards to its U.S. competitors, EADS reportedly started looking for a ‘North America-based’ operator to gain more U.S. Government contracts. This quest seems to have proven hard to achieve given its non-U.S. origin. In a sector fraught with national prerogatives and unwritten industrial protection rules, on top of shutter control issues preventing sales of high-resolution imagery to countries such as China, the company turned quite rightly to the Asian scene to garner more success.

With contracts for EO satellites to Taiwan, Thailand, Vietnam, South Korea and China (through SSTL), EADS Astrium is leading the non-Asian manufacturers in this part of the globe. And with the upcoming launch of the Pleiades’ sub-meter satellites, the company will soon compete head-on with GeoEye, DigitalGlobe and future Asian high-resolution satellites from ISRO and KARI. These satellites will offer a welcome addition of timely EO data capacity to the market, and the market has not waited for launches to start lining up: Beijing’s Eastdawn Information Technology contracted Astrium in September 2011 for Pleiades data and value-added services over a three-year period for five Chinese Government departments.

Bottom Line

Astrium GIS expansion into Asian markets illustrates the start of a new kind of competition among players in the sub-meter imagery market, and the consequence it may have on the world stage. Threats from U.S. Military budget cuts and commercial platforms labelled by top brass as insufficient to replace government-operated spacecraft could mean lower revenues for NGA contractors. This could only add more fuel to expansion plans into emerging EO data markets such as Asia. Less constrained than its U.S. counterparts from large contractual obligations, Astrium needs to succeed in markets such as Asia to solidify its lead in this growing EO market.

Information for this article was extracted from NSR's report Global Satellite-Based Earth Observation, 3rd Edition