Satellite Capacity Pricing Stabilizing, According to New Report
Satellite capacity pricing is stabilizing, but is sitting at a crossroads of multiple macroeconomic headwinds, external competitive pressures, and supply chain challenges, driving need for innovative strategies. That's the conclusion of Northern Sky Research's Satellite Capacity Pricing Index, 8th Edition.
“Economic slowdown and recession fears will drastically reduce advertising budgets, further causing video/DTH market pricing to plummet. Overall, NSR expects continued CAPEX efficiency in new satellite systems to help operators sustain lower pricing points.”
NSR Analyst and report author Joseph Ibeh.
For some service providers, such as SpaceX, inflation pressure enables an increase in end-user pricing; however, due to competitive pressures, many wholesale capacity providers do not have the bargaining power to significantly increase pricing.
In addition, the geopolitical crisis in Europe, C-band repurposing in many regions, currency devaluation in emerging markets and general economic slowdown all contribute to increased uncertainty for sustained demand growth in video and connectivity markets.
Competitive threat from OTT and dwindling TV advertising revenues continue to plague the Video/DTH market. However, delays in high throughput satellite launches help operators drive up fill rates from 40-55%, recorded in 2019-2020 (traditional widebeam satellites) to 65-80% in high demand markets.
“Looking towards 2023, indicators suggest a return to more pricing pressure as newly-launched VHTS and Non-GEO constellations intensify competition in high data-rate markets,” notes NSR Analyst and report author Joseph Ibeh. “Economic slowdown and recession fears will drastically reduce advertising budgets, further causing video/DTH market pricing to plummet. Overall, NSR expects continued CAPEX efficiency in new satellite systems to help operators sustain lower pricing points.”
NSR’s Satellite Capacity Pricing Index, 8th Edition offers the industry’s leading resource on satellite capacity pricing. Presenting detailed satellite capacity lease pricing, SCPI8 examines the most current spot price index for Q2 2022, anticipated price ranges, 4-year historical data and a 2-year forecast pricing for 2022-23. Assessing YoY and historical price changes across 15 application and frequency band segments, SCPI8 analyzes pricing dynamics across 18 factors, bringing down index and forecast pricing to a $/Mbps/MHz/Month basis.
(Source: NSR news release)