Satcoms Expected to Weather Economic Storm

Satcom Sector Expected To Ride High Through World Financial Crisis
Aviation Week

Not only do satellite telecom executives say, almost unanimously, that their sector will weather the global economic downturn, they also see some unexpected new engines of growth down the road.

Officials across the industry gathered at the Satellite 2009 conference here last week agreed that the sector’s fundamentals remain sound. Market capitalization and other indicators are down and merger activity is at a standstill, but the sector is still outstripping the economy as a whole, says Hoyt Davidson, managing partner of investment bank Near Earth LLC.

Revenues are strong, the ground segment in particular is hot and the industry’s key growth engine, video, shows little sign of slowing. Only the margins of the industry—such as the more questionable mobile satellite service ventures—give cause for concern, analysts say (see p. 25). Since the satcom sector typically lags behind the economy as a whole by 2-3 years, the recovery should start kicking in before there is much impact, says Peggy Slye, space and telecom director at Futron.

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