Government initiatives expected to boost Asia-Pacific Broadband Satellite Market to $966 million in Revenue by 2007. (Market Intelligence).

Northern Sky Research released its newest market survey and forecast report: Asia-Pacific Broadband Satellite Services Markets 2003. The report focuses on the evolution of the broadband satellite market in the world's largest region and forecasts growth across multiple segments and sub-regions over a five-year period.

The report concludes that, given the Asia-Pacific's challenging economic environment and health concerns affecting GDP and demand, growth for broadband satellite services will be moderate but steady, driven largely by growth of the Internet in the People's Republic of China and India. More importantly, government support, which has contributed significantly to the use of broadband technologies in South Korea, is expected to be replicated in many countries of the region in efforts to alleviate poverty.

ISPs have leased satellite capacity for trunking needs and are expected to dominate revenue streams within the report's forecast period ending in 2007. In 2002, the ISP market for trunking services generated an estimated $386 million in revenue, for bandwidth needs that represented 6.2 Gbps. Although fiber continues to encroach on satellite-based services, the need for cost-effective, wireless WAN connections will always be present in this region.

The market has also experienced a slow migration from ISP demand to enterprise deployment as businesses located in rural and remote areas show an increased willingness to implement a satellite solution for specific IP-related applications. Enterprises can ill-afford to fall victim to the widening Digital Divide; this sector generated $102 million in broadband satellite revenue and 21% of the total market in 2002. The smallest segment, Residential Internet Access Services, generated estimated revenue of $2.7 million in 2002 or 0.3% of the entire market. High monthly service costs prohibited take-up rates, especially where cable modem and DSL alternatives were available.

Despite the steady stream of revenue from ISPs and government-supported programs for enterprise adoption, significant hurdles exist for future revenue generation. The largest impediment is the high price points that service providers offer the marketplace. Satellites are consumed at a premium, afforded only by a niche, elite group of end users, such as the government, that can have high price elasticity of demand.

Although overall usage of satellite-based services can be boosted by the public sector, price offerings will have to come down significantly for the technology to become part of the mainstream.