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 |  | Space Business to Grow Fast In 2000, Council Says
By Daniel Sorid
Staff Writer
posted: 08:00 pm ET
20 June 2000
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spacebusiness_report_000620
Space industry worldwide will grow at a rate of 10 percent in 2000, according to a report released Monday by an organization that promotes the space industry to investors.
Despite several failures in 1999, the industry remains strong, with revenues expected to reach $96 billion in 2000, says the report, "State of the Space Industry 2000," by the International Space Business Council (ISBC).
The gain is attributed to increased demand for satellite services, such as high-speed internet access, radio and television broadcasts, and high-quality images of Earth.
The report also says that the unreliability of spacecraft and rockets used to put satellites into space has been a detriment to the industry.
"While a few-percent rate of failure is expected, this can translate into considerable expense, both to insurers and in lost revenue due to business-plan delays," the report said.
ISBC's Annual Report
In 1999, several communications and defense satellites failed to reach orbit because of problems with launch vehicles. Of 78 launches last year, the report says 70 were successful, or about 90 percent.
Slight 'Iridium effect'
What some had expected to be a disaster for the industry -- the failure of the satellite telephony companies Iridium and ICO Global Communications -- turned out to have only isolated effects on the market, the report said.
"The financial sector continues to raise significant investment capital for the space industry," it says. "More than $9 billion was invested or raised by companies since the 1999 "State of the Space Industry" and more than 50 mergers and acquisitions have been identified."
Many space companies benefited from a strong stock market in 1999. The report listed 23 companies whose stock prices rose more than 100 percent, though a few of the companies listed have only a minority stake in the space industry, such as Qualcomm, TV Guide and Motorola. The report predicts around 12 initial public offerings of space-related companies in the next two to three years.
Wireless internet
A revolution in information technology stands to benefit the satellite-services market, even though satellites have thus far been kept mostly on the margins of consumer internet access. According to the report, only one percent of internet users connected via satellite services. In 2004, that number is predicted to be 6 percent.
This number could increase if wireless internet devices rival personal computers in popularity, as some expect they will. Wireless internet systems rely on radio waves and satellites to transmit data.
DARS incentive
Another relatively new entrant in the industry -- satellite radio -- is poised to take off, the report says. Merrill Lynch predicts that DARS (digital audio radio satellite) services will have 49 million customers in 2009.
Two of the major companies in the business, Sirius Satellite Radio and XM Satellite Radio, will charge around $10 a month for CD-quality radio systems that can be placed in vehicles and used anywhere in the U.S. These companies, the report says, are positioned to sell other satellite services to drivers, such as interactive maps, video, internet and engine-control software.
Internationally, the report predicts that tighter controls on technology exports could lead many business to turn to non-U.S. companies for space-related products and services. By the same token, as countries like India and China play more of a role in space business, greater competition and lower prices worldwide could follow.
The launch of the Ikonos satellite in 1999 also could help the fields of Earth imaging and remote sensing develop further. Ikonos' pictures clearly show objects as small as one yard (meter) across, making it a rival to spy satellites. The report also cites global-positioning services, tele-medicine and microgravity services as potential growth areas.
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