U.S. Military and Government Markets for Global Commercial Satellite Communications

SUMMARY

Communication Gap between the U.S. Government and Satellite IndustryRestrains Growth

The U.S. Department of Defense (DOD) is becoming increasingly dependent oncommercial satellite capacity as its demand for satellite communications (satcom)services is growing faster than its dedicated supply. However, the persistinglack of dialogue between the government and commercial satellite industry isresulting in lost opportunities for both. The military is missing an opportunityto enhance its satcom architecture and lower its costs, while the commercialsatellite operators are missing the chance to further boost their revenues inthe long term. Nevertheless, government and military demand is growingextraordinarily fast and is likely to continue for the rest of the decade.

This Frost & Sullivan research examines the demand for fixed satelliteservices (FSS) in the U.S. military and government sectors. It separatelyanalyzes demand from the DOD, nonmilitary users, and the civilian government(including federal, state, and local governments). In addition, the researchdiscusses technological trends, political dynamics, drivers, restraints, andother key issues.

DOD becoming more Amenable to using Non-U.S. Satellite OperatorsfCapacity

Some members of the U.S. congress have advocated that the DOD should leasecapacity only from operators located in the U.S. or in countries that areclosely allied to it. However, the fact is that barriers to entry for non-U.S.satellite operators seeking access to the U.S. military market are lower thancommonly believed. "The DOD is shedding its inhibitions and is increasinglyreceptive to leasing satellite capacity from a broad range of operators,"says the analyst. Market participants – both native and foreign –must encourage the DOD to take advantage of the benefits offered by commercialsatcom. For this, operators should establish a close relationship with the DODas well as with its procurement offices and vendors.

Long-term Contracts – the Key to Streamlining the ProcurementProcess

The DOD has sought to reorganize the satellite communications procurementprocess by establishing the Defense Information Systems Agency (DISA) – asole procurement and capacity issuing authority. However, many users perceiveDISA to be too expensive and slow in distributing satellite capacity. As aresult, many units that have their own resources choose to bypass DISA byapproaching operators and resellers directly. This weakens the DODfs abilityto lower prices and to predict its future needs. "The DODfs inability tomanage and measure the use of satellite capacity could result in its losing anopportunity to both enhance its satellite communications network and to lowerits costs for satcom," says the analyst.

By entering into long-term contracts with satellite operators, DOD caninfluence commercial fleet design. Operators should assure the U.S. governmentthat if it agrees to enter into long-term contracts, military requirements willbe taken into consideration when planning the future satellite capacity, orbitallocations, and telemetry, tracking, and control (TT&C) network stations.

TABLE OF CONTENTS

• EXECUTIVE SUMMARY
  • Project Scope and Definitions
    • Scope of the Study
    • Definitions
  • Key Findings and Recommendations
    • Key Findings
    • Recommendations
• MILITARY MARKET
  • Introduction
    • Military Market Overview
  • Military Market Dynamics
    • Market Drivers
    • Market Restraints
    • Other Market Dynamics
• GOVERNMENT MARKET
  • Introduction
    • Government Market Overview
  • Government Market Dynamics
    • Market Drivers
    • Market Restraints
• MARKET FORECAST
  • Market Forecast
    • Decicated Military Capacity
    • Military Capacity Demanded
    • Commercial Capacity
    • Military Market Size and Satellite Operator Market Share
    • Forecasts for Government and Military Markets
• APPENDIX
  • Frequency Band Nomenclature - Methodology - Acronyms
    • Military versus Commercial Frequency Band Nomenclature
    • Methodology
    • Glossary of Acronyms