NORTHERN SKY RESEARCH (NSR): ATC to Revolutionize MSS Industry in the U.S.

CAMBRIDGE, Mass. -- Market to Generate $4.1 Billion in Revenue thru 2010

In the recently released market survey and forecast report "Mobile Satellite Services, 2nd Edition," NSR concluded that ancillary terrestrial component (ATC) services will revolutionize the MSS industry. The report, which provides an in-depth overview of demand trends for twelve customer segments in five regions of the globe and three oceanic regions, found that ATC will positively impact the MSS industry in the United States.

The report concludes that from an estimated $42.5 million in revenues for 2006, the market is expected to reach over $2.3 billion by 2010 yielding total revenues of $4.1 billion over a five-year period. Revenue growth will be driven by government demand in the early years of service for applications that improve disaster preparedness and address public safety needs. By the end of the decade, demand is expected to shift rapidly in favor of consumer markets.

The Federal Communications Commission (FCC) granted a large amount of spectrum for the development of ATC services. However, this allocation has been met by strong opposition from cellular providers and the broadcast industry. Companies opposed to ATC argue that satellite-based mobile services do not have a compelling proposition, and a large spectrum allocation that allows mobile satellite services to complement its offerings with terrestrial capabilities is unjustified to revive the industry.

However, in seeking to implement digital divide programs and in addressing better technical platforms for disaster preparedness, the FCC may have intentionally allocated spectrum specifically to address these needs. "The FCC allocations are difficult to second guess, but if the intention is to improve teledensity rates in rural America, MSS/ATC does provide the vehicle by which this can be achieved. Moreover, an MSS/ATC offering further provides first responders and the general population with a communications tool that leverages terrestrial and satellite networks when emergency situations take place, "states Jose del Rosario, Senior Analyst of NSR and author of the report.

As with any new technology in the MSS industry, the government will likely be a vital end user group for MSS/ATC offerings. The recent experience in Hurricane Katrina showed that communication services are critical before, during and after disaster strikes. Back-up networks, redundancy and "always-on" capabilities are paramount to prepare for, monitor and hit-the-ground running when emergency situations occur.

The FCC licensed MSV and authorized Globalstar, and is likely to issue ATC licenses to other players in the very near term. Part of the issuance of licenses is a large allocation of spectrum, which is higher compared to some of the large cellular service providers in the U.S. such as T-Mobile. "While government users and first responders will benefit by leveraging ATC to complement traditional MSS offerings, the opposite will be the case for consumer markets. Consumers will be attracted to a cellular-like service, which incorporates a satellite mode for emergency purposes or simply to cover cellular network blind spots where cellular companies have not and could not install cell towers," said del Rosario.

"Mobile Satellite Services, 2nd Edition" is a multi-client report now available from NSR. For additional information on this report, including a full table of contents, list of figures and executive summary, please visit www.nsr.com or call NSR at 617-576-5771.

NSR is an international market research and consulting firm specializing in satellite and wireless technology and applications. NSR primary areas of expertise include emerging technology, IP applications, and broadcast services. With extensive expertise in all regions and a number of broadband sectors, NSR is a leading provider of in-depth market insight and analyses.