NCPA - National Center for Policy Analysis

Growth Of The Satellite Industry

August 10, 1999

Many Americans may not have noticed, but the business of building and launching commercial satellites into orbit has become a giant industry -- and from all indications, it is destined to get much larger.

  • Merrill Lynch analysts peg the value of the satellite industry globally at $35.6 billion.
  • It is growing at a rate of nearly 20 percent a year -- with much of that growth coming in the U.S.
  • Revenues are projected to reach $171 billion in 2008.
  • Fully two-thirds of all operational satellites in orbit are U.S. made and many foreign companies satellites' contain U.S.-made components.

But in March, Congress shifted responsibility for approving satellite exports from the business-friendly Commerce Department to the Department of State. The move was prompted by national security concerns. Two top U.S. firms -- Loral Space & Communications Inc. and Hughes Electronics Corp. -- had been charged with violating terms of their export agreements during launches in China. Observers say they may have inadvertently helped the Chinese military.

Nonetheless, some analysts fear that the transfer of jurisdiction will slow down export approvals. And foreign rivals of U.S. firms are now angling to get a bigger share of the commercial satellite business by publicizing their lighter regulatory burdens.

Source: Joseph Guinto, "Satellites Reversing Course?" Investor's Business Daily, August 10, 1999.

 

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