Rocket launch company Arianespace said it expects the credit crunch and lower consumer demand to lead to a reduction in the number of satellites being launched.

Jean-Yves Le Gall’s surprising statement (speaking to the Financial Times) suggests that he expects that the launch industry (including his rivals) will launch between 15 and 20 satellites next year, down from about 25 this year. He told the FT that orders would drop next year, although existing orders were unlikely to be cancelled since about 80% of the financing for satellite projects is normally secured at least a year before launch.

He said: “In 2009 we will have fewer satellites ordered and it is clear that satellites will be much smaller. New projects that are very innovative are now frozen. Our customers, who are the operators, all say that they have projects but now need to make sure that they still have the customers. If we are really entering into a global recession, people will stop paying for things like Direct TV [satellite television].”

Le Gall said that Arianespace expected to itself launch 35 rockets over the next three years, split between its own giant Ariane 5 rocket and its joint-venture with Russia’s Soyuz launcher.

However, his statement is surprising because most established satellite operators (and their pay-TV clients) are now mature in terms of their own developments. By and large they are launching satellites to maintain a youthful fleet, and using the replaced craft to develop new markets.

As far as cancelling subscriptions for pay-TV, inevitably the so-called economic crisis might well lead to some churn of premium tier content, but we tend to agree with BSkyB’s statement last week that they did not anticipate any significant churn as a result of the financial downturn.

Source: Rapid TV News 2008

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