The report concludes that unlike the experience of the late-1990s, next generation mobile satellite services based on the consumption of high-speed data, and not narrowband voice, will be a sustainable and viable business proposition over time.

From an estimated $63.9 million in revenues for 2003, the market is expected to reach close to $1.3 billion by 2010 yielding cumulative revenues of $3.7 billion over an eight-year period.

Revenue growth is driven largely by two customer segments, namely the government/military sector and the commercial airline industry.

The government/military is considered the anchor tenant as revenue streams will sustain R&D efforts, particularly in antenna system development where there are technical challenges currently that need to be addressed.

The commercial airline industry is expected to drive revenue streams as well, as high-paying international business travelers on long-haul trips will increase Internet usage in accessing corporate intranets.

The government will continue to be the key end user group for the satellite mobile industry, since expensive terminal equipment, specifically in antenna systems can only be procured by a customer base that has a high price elasticity of demand.

More importantly, the government/military has extreme needs that are evolving over time such that highly-expensive equipment used for special circumstances leads to demand for state-of-the-art equipment that is still beyond the reach of commercially-based users.

"Sustained government use will actually lead to positive spillover to commercial sectors as higher orders lead to economies-of-scale and a subsidization of R&D for commercial applications," states Jose del Rosario, senior analyst of Northern Sky Research and author of the report.

For next-generation growth, particularly for the retail business, the aeronautical sector, specifically usage in the commercial airline industry, will drive revenue generation in this market.

"The business proposition hinges on tapping the international business traveler, a seemingly precarious proposition since past experience in narrowband mobile voice services led to market failure. However, the two applications, narrowband voice and broadband data, are highly different when applied to the commercial airline industry," said del Rosario.

From a regional comparison, the report forecasts that the Africa/Middle East region will dominate the market until 2010. From 16% of all revenues in 2003, the region is forecasted to account for 22% of overall revenues in 2010 and 19% of cumulative revenues over an eight-year period.

Government use is currently prevalent in the Africa/Middle East region and is expected to continue within the report's forecast period. Many deployments and even technological benchmarks are being implemented using the conditions of the Africa/Middle East to develop products, which should continue over time.

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