Many vendors anticipate a decline in U.S. Military demand for commercial satellite services. President-elect Barack Obama has promised to withdraw troops from Iraq within a 16-month period, or by mid-2010. The impending pullout suggests limited presence and thus a decrease in military needs for satellite services, at least from outsourcing capabilities to commercial assets. However, President-elect Obama has likewise indicated that in Afghanistan, troop levels should actually increase.
Based on these trends, the total mix of troops in Iraq and Afghanistan will likely remain at, or close to, the same levels over the long term. The U.S. Military has likewise created a new command, the Africa Command (AFRICOM) in October 2008, which will have to build up its communications capabilities very quickly. These trends translate to sustained satellite bandwidth requirements, including commercial assets to support troops for peacekeeping missions. It should also be noted that bandwidth per soldier requirements are expanding, such that a net decrease of soldiers on the ground is offset by the increase of satellite bandwidth to support current and emerging application suites.
“But apart from Iraq and Afghanistan where U.S. Military bandwidth assets have been heavily taxed, the Pentagon has stated that the U.S. Military is prevented from improving its ability to respond to any new crisis such as potential outbreaks in North Korea, Iran, Lebanon or China,” states Jose del Rosario, Senior Analyst of NSR and author of the report. Intelligence gathering and reconnaissance missions are also a growing part of warfighting and peacekeeping missions. “The automation of war is augmenting and in some cases replacing ground troops. UAVs and other UAS solutions are bound to increase substantially over time, and the satellite bandwidth required to run these assets is massive,” states del Rosario.
The single-most important market restraining factor for demand of commercial satellite bandwidth relates to the U.S. Military’s deployment of its internal assets, specifically the WGS, AEHF and MUOS satellites. Some decline in commercial bandwidth requirements is expected, but NSR expects this to be temporary as current and new applications will once again increase satellite bandwidth needs. Revenue growth will continue to be driven largely by the U.S. Military, but other countries should account for higher spending levels as well, as the United States has asked, and in some cases demanded, its allies to increase their participation in international peacekeeping efforts, both in terms of engagement and in financial support.
