Northern Sky Research

Satellite Capacity Pricing Index, 2nd Edition (Q4 2016)

Published: October 2016

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NSR’s Satellite Capacity Pricing Index, 2nd Edition (Q4 2016) addresses the critical question: how much does satellite capacity really cost? With detailed pricing information gathered from both global and regional satellite operators, as well as Service Providers, NSR’s Satellite Capacity Pricing Index, 2nd Edition (Q4 2016) offers a comprehensive & unbiased understanding of why satellite capacity pricing is evolving as it is, and where it may go in the future.

The satellite industry is in a period of rapid transition, with business models, value chains, and technological innovation all being turned on their heads due to an onslaught of capacity from players new and old. At the center of this transition is the evolution satellite capacity pricing, with this having a direct impact on top-line revenues and bottom-line margins for all players in the satellite ecosystem. NSR’s Satellite Capacity Pricing Index, 2nd Edition (Q4 2016) provides a thorough analysis of not only the actual price of satellite capacity by region, application, and frequency band, but also the factors influencing price, and answers such questions as:

  • What is the price of satellite capacity on an Mbps and MHz basis in all regions, applications and bands?
  • What difference can be expected between the “rate card” price, and the price paid by anchor customers in mobility, DTH, and other verticals?
  • In what regions has HTS had the most dramatic impact, and in what regions will this impact be most felt moving forward?
  • Which regions have seen pricing distortions due to unconventional bulk leasing patterns or other recent developments? How have large contracts impacted pricing in unusual ways?
  • How does the spectrum of pricing differ regionally and by frequency band?
  • How has pricing evolved over the past 5 years, and how has it evolved as compared to NSR’s Q1 2016 study?

NSR’s Satellite Capacity Pricing Index, 2nd Edition (Q4 2016) combines pricing inputs from regional operators, Big Four operators, and Service Providers, to provide an even more balanced and well-rounded view of pricing within the industry. Expanding on NSR’s Q1 2016 edition of this study, this most recent edition likewise provides “ranges” of pricing, with real-world rate card pricing, coupled with estimated pricing for major anchor clients and other large customers that would generally pay less in exchange for long-term commitments for large amounts of capacity. 

The Satellite Capacity Pricing Index, 2nd Edition (Q4 2016) builds on a foundation of industry leading capacity pricing research from NSR. At its core, the pricing index aims to serve as a guide to the relevant issues facing the satellite industry from a pricing perspective today. This included inputs from a number of NSR reports, including, but not limited to Global Satellite Capacity Supply & Demand, Satellite Operator Financial Analysis, and more. NSR investigates key factors that have influenced the pricing dynamics of the satellite telecom industry historically, and factors that will influence these pricing dynamics moving forward. By examining “million dollar questions” such as elasticity of demand and total cost of ownership, NSR’s SCPI, 2nd Edition delves into the drivers of satellite capacity pricing today and moving forward.

Primary Questions Addressed in This Report Include:

  • What is the current rate card price for satellite capacity by region, frequency band and application, and how does this differ from discounted prices being paid by major customers signing long-term deals?
  • What is the pricing range for actual capacity leases, discounted against the rate card?
  • To what extent has pricing fallen (or in some instances, risen) over the past 9 months since NSR’s most recent pricing index?
  • Which operators are most/least insulated from pricing pressures based on their core markets?
  • Which operators are most capable of adjusting to lower prices due to having pre-emptively launched significant quantities of GEO-HTS capacity?
  • How will the major factors that influence pricing evolve moving forward, by both region and application? 

Executive Summary

1. Introduction
  1.1 Satellite Industry Financial Overview
  1.2 Satellite Industry General Contract Structure Overview
  1.3 High Level Historical to Present Day Pricing Analysis

2. Historical Pricing Analysis (2010-Q1 2016)
  2.1 Historical Pricing Trend Discussion
  2.2 GEO-HTS to Present Day Impact Discussion
  2.3 Historical Capacity Pricing Data Segmented by:
    2.3.1 C-, Ku-band, GEO-HTS
    2.3.2 NAM, LAM, EU, MEA, Asia
    2.3.3 Video Broadcast, Data Networks, Mobility

3. Current Pricing Analysis (Q4 2016)
  3.1 Current “Spot Prices” for Capacity
    3.1.1 C-, Ku-band, GEO-HTS
    3.1.2 NAM, LAM, EU, MEA, Asia
    3.1.3 Video Broadcast, Data Networks, Mobility
  3.2 Pricing Range for Actual Capacity Leases
    3.2.1 C-, Ku-band, GEO-HTS
    3.2.2 NAM, LAM, EU, MEA, Asia
    3.2.3 Video Broadcast, Data Networks, Mobility
  3.3 Pricing Drivers and Restraints
  3.4 GEO-HTS impact on Current Pricing, and Analysis

4. Customer Composition Discussion and Analysis
  4.1 Discussion and Analysis of Major Customers by Region:
    4.1.1 What Percentage of the Market Do Major Customers Represent?
    4.1.2 Who are They Buying from Now?
    4.1.3 Might this Change in the Future?

5. Future Pricing Discussion
  5.1 Future Supply/Demand Discussion
  5.2 Analysis of High Growth Applications and Subsequent Impact on pricing
  5.3 Non GEO-HTS Constellation impact on pricing

Appendix. Methodology