Satellite & Earth Communication Systems Services Procurement Category Market Research Report Now Available from IBISWorld
(PR Web Via Acquire Media NewsEdge) Los Angeles, CA (PRWEB) April 11, 2014
Satellite and earth communication systems services have a buyer power score of 3.9 out of 5. The score reflects the positive purchasing environment and low risk of price volatility associated with satellite communication services. However, there are several factors limiting buyer power. "For example, suppliers have a moderate level of market share concentration due to the highly specialized technology related to these services, requiring a significant level of capital investments," says IBISWorld procurement analyst Andrew Krabeepetcharat. Thus, buyer power is harmed because there are fewer supplier options and less price competition. Moderate switching costs also limit buyer power because certain buyers require setup and installation for large-scale satellite communication systems and will face some expenses when switching suppliers.
Despite these factors, the price of satellite communication systems services has been declining relatively quickly during the past three years due to technological change in satellite communication systems and consistently declining costs for inputs such as semiconductors and other electronic components. Major suppliers have invested heavily in research and development (R&D) to improve the performance of satellite communication technology and make it more cost effective. "Large vendors are striving to offer the best quality services, benefiting buyers as they compete on the basis of price and offer higher-quality services," says Krabeepetcharat. Furthermore, the average supplier's profit margin is fairly high, benefiting buyers by allowing them to negotiate on prices for multi-year contracts. Major vendors include Intelsat Ltd., Hughes Communications Inc., Inmarsat PLC and SES SA.
In the next three years, prices are expected to continue to decline as satellite communication technology improves. More suppliers are entering the market and will help drive prices down. At the same time, input prices for semiconductors and electronic components will fall, prompting suppliers to reduce prices to compete with other vendors. However, as private investment in computers and software and the percentage of services conducted online grow in the next three years, rising demand for satellite communication services will increase and mitigate price declines.
For more information, visit IBISWorld's Satellite & Earth Communication Systems Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of satellite and earth communication systems services. Satellite and earth communication systems services provide telecommunications connections via satellite for consumers and business that do not have access to wired or cellular networks. This report does not include direct-to-home satellite television services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld's procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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