Expansion in Broadband-Satellite Services Seen Leading the Industry's Growth
NEW YORK, May 4 /PRNewswire/ -- The global satellite communications
industry is likely to grow to $171 billion in revenue by 2008, from
$36 billion in 1998, a 17.5% annual growth rate, according to a Merrill Lynch
research report.
The 221-page study, entitled "Clearing the Hurdles: The Satcom Industry
Focuses on Execution" was authored by Merrill Lynch First Vice President Tom
Watts, who explains that the industry's growth will be led by an expansion of
the broadband-satellite-services sector.
"Revenue in broadband-satellite services is likely to rise to more than
$30 billion in 2008 from less than $100 million in 1998," Mr. Watts said.
"Among other the drivers of the growth, will be the continued expansion of
satellite television, which, by 2008, should attract 19.6 million subscribers,
compared with 10.6 million as of year end 1998." The bulk of the growth is
expected during the next five years, the report indicates.
Investment Themes Identify Industry 'Winners'
The report identifies 10 investment themes that are expected to determine
the industry's "winners" at the turn of the millennium:
Two measures of the leaders will be success in carrying out quality
execution of projects, and an ability to take advantage of continued momentum
in direct broadcast satellite;
Successful companies will be those that are able to leverage satellite
demand from data and Internet connections, which Mr. Watts expects to grow
"tremendously" in the next few years;
The analyst also said he is confident of the long-term demand for mobile
satellite services, which will be a factor for companies in the forefront. In
addition, there will be a revamping of local distribution channels, as the
evidence mounts that local joint ventures for the distribution of
multinational satellite services "don't work as currently conceived." The
leaders will be able to take advantage of the revamping.
Another defining measure will be a company's ability to deal with the
consolidation of global satellite operators that lease capacity. There also
will be an increased focus on reliability by operators and manufacturers. The
extraordinary number of in-orbit satellite anomalies over the past few years
has focused attention on the importance of satellite reliability, Mr. Watts
said;
The final three themes cited by Mr. Watts are the expectation that: high-
yield markets will continue the key role in financing the satellite industry,
longer-term pre-revenue companies will recover their luster and market leaders
will attract increasing interest from investors of large-capitalization
companies and thus move into the investment mainstream.
Merrill Lynch Global Securities Research and Economics has more than
700 analysts in 27 countries. Merrill Lynch is the only firm to place first
in five of the six Institutional Investor research team surveys (U.S. Equity,
U.S. Fixed Income, Latin America, Europe and Asia.) In addition, the firm
ranked first in The Wall Street Journal 1998 All-Star Analysts Survey, and the
Financial News' "Poll of Polls," a summary of nine equity research surveys
from around the world.
SOURCE Merrill Lynch & Co., Inc.
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CONTACT:
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