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Budget Turmoil Changing Military Satellite Buying Priorities

by Forecast International
September 9, 2011
in Technology News
2 min read
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Forecast International projects that the worldwide military satellite market will be worth $42.5 billion, based on production of 180 military satellites, from 2011-2020.

Thirty-five satellite programs are covered in the company’s “The Market for Military Satellites” study, which notes that these orbiting systems play a significant role in modern military operations, particularly in the U.S., which relies heavily on communications and reconnaissance to achieve its goals on the battlefield.

“With the increased focus on battlefield networking, communications satellite capacity is critical,” said William Ostrove, aerospace systems analyst and author of the report. Satellites are also used for navigation and weather forecasting.

The analysis addresses some of the difficulties facing the market as a result of tight government budgets worldwide. “Governments are faced with large debt, and are reducing spending plans in response,” said Ostrove. With respect to military satellites, budget cuts will be felt the most in the U.S., where satellite manufacturers have long enjoyed lucrative development and production contracts.

According to the study, the tougher budget environment is prompting the U.S. to focus on production of already-developed satellites, rather than on development of revolutionary new technology. The U.S. Department of Defense will also place more emphasis on smaller, inexpensive satellites under a concept known as Operationally Responsive Space (ORS).

Other concepts being pursued by military buyers include increased reliance on commercial satellite capacity, and greater purchases of hosted payloads. The study says that the U.S. has depended on commercial satellite operators for some time; however, as the demand for bandwidth increases, the military will increasingly rely on commercial satellite operators. Likewise, the military will rely more heavily on hosted payloads. Ostrove states that hosted payloads will become more commonplace as time goes by.

Despite budget troubles, the United States remains the most significant market in the world for military satellites. In terms of value, the United States will account for nearly three-quarters of military satellite production over the next 10 years, according to the report. Other notable military satellite purchasers during the period will include Japan, France, Russia, and China. U.S.-based companies Boeing and Lockheed Martin will benefit from the DoD’s reliance on satellites, and they top Forecast International’s list of prominent manufacturers during the 2011-2020 period. Mitsubishi, EADS Astrium, and ISS Reshetnev will also see significant production.

Tags: budgetForecastmarketmilitary satellitesatellite
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