Despite the recent shortcomings of Iridium and ICO, the satellite industry is still in an early stage of development, and successful service providers will emerge, according to a study by Allied Business Intelligence (ABI), Oyster Bay, NY. Companies able to offer competitive services in the next few years will realize large subscriber growth rates.

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The voice-over-satellite market is currently the most problematic segment of the industry. This is largely due to Iridium's failure and ICO's Chapter 11 filing. As a result, the voice market will not be as strong as expected, with only close to 8 million voice terminals forecasted to be in use by 2004, ABI said.

The narrowband messaging segment looks more attractive, ABI said. Many satellite carriers are looking to include short messaging in their offerings as more corporations are turning to these services. ABI predicts that there will be 33 million messaging terminals in place by the end of 2007, up from close to one million terminals in 2000.

Broadband-over-satellite carriers can also expect success, as the carrier can provide applications and service providers can fulfill unexplored niches. As carriers differentiate themselves from one another, revenues will rise. In the United States, revenues will reach $21 billion in 2007, up from $25 million in 2000.

North America will be the leading region for satellite-based narrowband and broadband services, followed by Western Europe, ABI said. The United States will make up for about 45% of the total satellite market, with a subscriber base of 11 million by the end of 2007, compared with 11,000 subscribers in 2000.