These early results from Euroconsult's analysis of industry developments during 1999 show that year to have been the satellite industry's second most active after 1995 (which had seen 47 firm orders), and a slight improvement over the 23 firm orders recorded in 1998.

In addition, memoranda of agreement were signed during 1999 for up to seven more geostationary satellites which remain to be confirmed, subject to contract negotiations and financial arrangements. This analysis is based on the public record, which may be incomplete.

Distinct signs of slowdown have appeared in 1999. This trend is consistent with past Euroconsult projections that the satellite industry would reach a cyclical low in the early 2000s, after the burst caused in the mid-1990s by the emergence of many new applications and geographic markets.

Only two firm orders were reported in the second quarter of 1999 and only three in the fourth quarter. U.S. prime contractor Space Systems/Loral and Europe's two prime contractors Alcatel Space and Matra Marconi Space each received a single firm order for communications satellites, though other application markets such as Earth observation have been more active.

No less than eleven satellites placed under letters of intent in 1998 remain to be confirmed (GE*Star-1, Rascom, Agrani, three Express K and four Yamal satellites), with significant financing or technical challenges to overcome. A major contract signed for APMT-1 and 2, which remained subject to the completion of export licensing procedures, was cancelled in April 1999.

Finally, twelve of the year's firm orders were placed with Lockheed Martin Corp. or Hughes Space & Communications by their own subsidiaries and affiliates, including the Astrolink and Spaceway series, Garuda-2 (which may be subject to successful exploitation of Garuda-1 by PT Asia Cellular Systems) and Panamsat and DirecTv satellites.

It is noteworthy that only two satellites (Garuda-2 and Nilesat 102) were ordered by operators from emergent countries (respectively Indonesia and Egypt.) Asia and Latin America had been major markets in previous years, but operators in these regions now have the capacity they need, and many have deferred further acquisitions after their economic environment deteriorated.

The quality of the order book also remains uneven, as the satellite industry continues to announce as "orders" agreements which may not be fully binding, subject to reviews and undisclosed conditions, or involve projects less than fully financed. Several of the geostationary satellites placed under firm contracts in 1998, and all of the non-geostationary orders announced in 1998-99, depend on debt or equity deals which are reportedly still not closed.

On the positive side, 1999 saw orders for some of the most advanced commercial satellites ever, including spacecraft with powerful on-board signal processors, multibeam antennas, high-power platforms and Ka-band transponders. These orders reward years of internal R&D efforts by the satellite industry and government agencies.

Two second-hand satellite transactions were recorded in 1999 as part of DirecTv Inc.'s takeover of PrimeStar; Eutelsat was also made the custodian of some of their domestic satellites by France and Germany. Several other satellites are considered available on the second-hand market.

Other satellite markets were generally robust in 1999, with 22 known firm orders for scientific, Earth observation or technological satellites, in addition to an undisclosed but substantial number of firm orders as part of the U.S. National Reconnaissance Office's Future Imagery Architecture. NASA alone ordered nine satellites in this category during 1999; the European Space Agency and European meteorological operator Eumetsat ordered five altogether.

The launch market was strong in 1999, with firm orders announced during the year for the launch of at least 19 geostationary and 44 non-geostationary satellites, excluding the potentially large but still uncertain orders announced by Teledesic LLC and SkyBridge LP, whose programs both remain subject to technical and financial reviews.

Excluding these orders, which would benefit International Launch Services (ILS) and the Boeing Co., Arianespace disclosed firm contracts for the launch of 12 geostationary satellites, against two for ILS and five for Boeing (including Sea Launch.)

Boeing and Lockheed secured eight of the 20 non-geostationary launches known to have been contracted in 1999 (20 of 32 including the Teledesic and SkyBridge contracts.)

Euroconsult, is a Paris- based research and consulting company, that has tracked the space and satellite business since 1983. It advises a wide range of commercial and government customers and publishes reference studies, including the recently published Corporate Profiles: 50 Satellite Operators, and the annual World Satellite Communications and Broadcasting Markets Survey and Launch Services Market Survey (2000 editions forthcoming.)

Euroconsult also will hold the next editions of its successful annual conferences on the launch vehicle business and on satellite financing in May and September 2000. For more information, visit our web site: www.euroconsult-ec.com.