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Blue Sky Satellite Communications

Market Analysis Summary

The satellite services market is worth an estimated $12 billion in 2001 for the African and Middle east markets, and there is a projected growth of 20% per year. Blue Sky aims to tap into this market, and expects to be able to capture a 10-20% market share.

Inmarsat products, such as the Mini-M Sat Phone and the M4 Global Area Network terminal, are poised to maintain a growth pattern over the next 24 months. The re-launch of the Iridium product will also impact the market, and we are in good position to take advantage of this opportunity. 

The VSAT market has just appeared in 2000, and the sentiment is that it will grow even further in 2001 and 2002. We already have a number of proposals in the market which should materialize in the new year.   

4.1 Market Segmentation

In the satellite hardware industry we find that Inmarsat products are currently the entry-level equipment. The sales in this type of product have historically been very good. However, these will taper off as new and smaller phones from Global Star and New Iridium hit the market. VSAT is an expensive product and is proprietory to a satellite, as is Inmarsat and Iridium. Although the sales in this VSAT market are fewer, the margins are large enough to justify the time and effort, the monthly recurring income is there, and most of the time, part of the usage is pre-paid for several years in advance.

Airtime customers are those that we take away from other service providers by offering lower rates on their current airtime. At times we will sell at cost just to keep up the volume so we make the profit from the discount the networks give to us. 

Satellite communications business plan, market analysis summary chart image

Market Analysis
2001 2002 2003 2004 2005
Potential Customers Growth CAGR
Inmarsat 40% 300 156 218 305 427 9.23%
New Iridium 300% 300 1,200 4,800 19,200 76,800 300.00%
VSAT 70% 400 680 1,156 1,965 3,341 70.00%
Airtime: All 200% 100,000 300,000 900,000 2,700,000 8,100,000 200.00%
Total 200.00% 101,000 302,036 906,174 2,721,470 8,180,568 200.00%

4.2 Target Market Segment Strategy

Our choice of target markets is strategic. We assume that it reflects our strengths and weaknesses. We are not selling to the self-reliant users, because they buy equipment as appliances based on features and price. Instead, we are selling to the service-seeking users whose needs match our strengths and weaknesses.

Regarding the small business segment, we are looking for the types of small business that appreciate our value-added services enough to pay for them, but aren’t big enough to have experts in-house, on payroll or staff.

The most obvious and important trend in the market is declining prices. This has been true for years, but the trend seems to be accelerating. We see the major manufacturers and suppliers putting systems together with amazing specs–more power, more speed, and more bandwidth.

Another trend is ever-greater connectivity. Everybody wants to get onto the Internet, and every small office wants a LAN. A lot of small offices want their LAN connected to the Internet.

4.2.2 Market Growth

The projected market growth for the Telecom’s industry has been one of the most highlighted aspects of new business in the marketplace today. With the coming of age of the new broadband services and the privatization of many Telecom companies (which were previously run by the government), we see that growth is going to far surpass any projection that has been made in the past.

It must be seen as one of the fastest growing market segments in business today. The recent mergers and takeovers are a small taste of what is waiting to happen. 

4.2.3 Market Needs

Since our target market is the service seeker, the most important market needs are support, service, training, and installation, in that order. One of the key points of our strategy is the focus on target segments that know and understand these needs, and are willing to pay to have them filled.