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Industry Rockets In 1999 Despite LEO Woes


Arlington - June 19, 2000 -
The global space industry continued to grow at a dramatic rate in 1999, drawing over $9 Billion in investments for commercial ventures and creating $87 Billion in revenue, according to the "2000 State of the Space Industry" released today by the International Space Business Council (ISBC), a trade association promoting the business interests of the space industry.

Beyond satellite and launch vehicle manufacturing, the industry now delivers communications services used by businesses and consumers each day, including broadband and Internet access, streaming media to the desktop, cable and video program distribution, direct broadcast satellite television, distance learning and private business networks, mobile telephony, remote communications, and soon to-be-launched direct-to-consumer digital radio. Today, satellites are only starting to

show how well they fit into the global information infrastructure.

According to Scott Sacknoff, President of the ISBC, "The industry's active growth can be attributed to the shift to a digital, wireless world. Companies have been rapidly taking advantage of satellites' ability to reach a geographically diverse customer base and broadcast to multiple locations simultaneously.

"Combined with dramatic increases in bandwidth requirements, the telecommunications, media, Internet, and entertainment communities have embraced satellites and made them an integral part of their overall infrastructure.

We are seeing an increasing number of customers and partners from diverse firms such as Microsoft, General Motors, Hertz, Arthur Daniels Midland, Cisco Systems, America Online, and Disney," said Sacknoff.

"The data and mobility revolution is providing us with the flexibility to access information, communicate, and organize our businesses and our lives", said Andrea Maleter of Pricewaterhousecoopers.

"Pent-up demand worldwide for various mobile services together with the critical nature of data capabilities for businesses and consumers is fueling rapid acceptance of satellite and more specifically, broadband services.

"Companies around the globe are recognizing the vast opportunity for providing these services, enabling them to expand their businesses and spur further growth of this new global economy," said Maleter.

In its comprehensive report on the space industry's expansion and contribution to the global economy, the ISBC recorded that twenty-four companies posted stock market gains of 99.5 percent or better, and over 50 mergers and acquisitions valued at more than $55 Billion.

The report also noted that the industry supported more than one million jobs worldwide. The report found that:

  • Businesses worldwide are looking to satellites for bridging the digital divide, for providing high-speed access to the Internet, as well

    as for providing telemedicine, radio, television, training and education

    services to consumers and corporate customers. With respect to the Internet, satellites offer cost and speeds comparable to terrestrial alternatives in many cases with higher quality.

  • Many space companies including DirecTV, Echostar, Gilat, PanAmSat, Trimble Navigation and Qualcomm, are being considered by mainstream investors as telecommunications or broadband plays. As part of the industry's diversification, these companies have moved beyond the traditional space sector to become service firms that strategically use satellites to reach their target markets.

  • Approximately three percent or two and one-half Gigabits of international transport capacity worldwide is used to supply Internet backbone connectivity by satellite. Internet services worldwide use 15 Gigabits of satellite capacity. This includes international, regional and national coverage as well as direct access. This figure is forecast to grow more than four times in the next four years to 60 Gigabits. As the Internet uses local caching as a standard delivery method, the distribution of Internet content to local servers will create an even greater demand for transponder capacity managed by Fixed Satellite Service operators.

  • Direct broadcast satellite (DBS) television has become the fastest growing consumer electronics product in history, with more than 35 million people worldwide currently receiving their television service by satellite.

  • Digital Audio Radio Service providers who will offer nationwide radio coverage in the U.S. have signed distribution deals with most of the major automobile companies. Expected to launch their service in time for the 2000 holiday season, analysts forecast almost 50 million subscribers by the end of the decade.

  • GPS and directional assistance equipment for automobiles has been widely accepted. New requirements by the FCC to include GPS chips in mobile telephones will increase the market and acceptance of this technology.

  • Stability in the space industry has spurred many transactions among space hardware suppliers and teleport operators, many of which are looking to expand their capabilities. Some of the players involved in these activities include L-3 Communications, Veridian and ATC Teleports.

The two largest transactions included Boeing's acquisition of the Hughes

satellite manufacturing operation and Honeywell's acquisition of AlliedSignal.

  • The launch of IKONOS has ushered in a new era of commercially available high-resolution imagery. Companies have only just begun to grasp how to make use of this visual information that will eventually find its way into products for sectors as diverse as construction, agriculture, and the travel industry.

    Among the statistical information from this report:

    • Worldwide Space Revenues, 1999: $87.0 Billion
    • Space Industry Revenue Increase (1999 - 2005): + $81.2 Billion
    • Little LEO Data Services (1999 - 2005): + 513.0%
    • Satellite Broadband (1999 - 2005): + 2,015.1%
    • Remote Sensing (1999 - 2005): + 414.8%

    The figures used in this press release are included in the complete "2000 State of the Space Industry". Additional data including year-by-year growth of each sector of the industry is available in the report and on the SpaceBusiness.com website. The forecast is derived using data provided by industry and financial analysts and reflects a consensus among industry estimates.

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