Northern Sky Research (NSR), a market research and consulting firm that focuses on satellite and wireless technology and applications markets, announced the results of its latest study upon the satellite based earth observation, which states that government contracts, especially those from military users has now been playing an instrumental role in determining the Earth Observation (EO) market growth, size and shape.

Titled ‘Global Satellite-Based Earth Observation, 2nd Edition,’ the research established that government contracts are the most important consumers of high-resolution satellite imagery, and takes the recently awarded EnhancedView contracts from the National Geospatial-Intelligence Agency (NGA) into account, which will be responsible for creation of a bigger section of the EO data market revenues for a period of the next ten years.

“The EO market continues to see growth associated with larger civil government and military segment orders for defense and intelligence, surveillance and security as well as environmental and climate change,” commented Claude Rousseau, senior analyst at NSR, who has authored the new report. “Notwithstanding these two main segments, commercial and enterprise users have increased their adoption rate of EO data products and services, albeit at a slower pace.”

Further, the study by NSR emphasizes that by the end of the year 2010, the collective EO market revenues from data, value-added services and satellite manufacturing will rise to become $7.7 billion, showing a compound annual growth rate or ‘CAGR’ of 3.5% over the next ten years. It says that while the number of operational satellites was 180 satellites in-orbit in the year 2009, it will increase to become around 240 operational satellites by the end of 2019; while it forecasts around 77 percent of all new satellites in the coming ten years to be owned or operated by a government or military entity.

During the next three years, a number of commercial EO satellites and constellations are expected to be launched with sub-meter resolution, supported by military users in a big way. Although the number of commercial high resolution satellites is increasing, the regulations imposed on pixel size due to national security issues have been driving an opportunity for new players to challenge established ones. As more and more government and military organizations have been adopting commercial satellites for their services, the EO market foresees a sustainable growth in the future.

In July 2010, NSR offered its annual review of the wireless backhaul via satellite market that stated that the industry made tremendous gains from the blistering pace of wireless subscriber growth in 2009 and the first half of 2010.