The adoption of a network-centric war (NCW) doctrine by European military forces, the need for effective power projection capability and the importance of sensor-to-shooter connectivity as established in the Afghanistan and Iraq conflicts are all projected to drive market growth. At the same time, the development of commercial off-the-shelf (COTS) technology with crossover applicability in the military marketplace is expected to add to growth momentum.

The most pressing near-term engagement for market participants is the anticipated lack of investments in new programmes or upgrades in the land and air segments. Offsetting this will be the growing market for data-links. Over the long term, new applications are expected to marginalise traditional product segments with growth supported by platforms that require very high bandwidth solutions or sophisticated connectivity solutions.

The need for improved connectivity and situational awareness on the ground is set to fuel development in the largest market segment�land systems. Promising areas of growth include software defined radio (SDR), WNR, data-links for air defence, squad-level radios and air-to-ground connectivity for close air support. Sizeable SDR procurements post-2010 are expected to underline a revenue potential of $1,303.0 million in 2013.

The airborne systems segment is set to record a steady annual average growth rate of 3.52 percent over the 2002-2013 period, reaching an impressive $740.0 million by 2013. Key drivers are likely to be the purchase of strategic information surveillance and reconnaissance (ISR) platforms and accompanying high bandwidth connectivity. Data-links, which are both costly and also require extensive work to be done, comprise another promising growth area.

Subdued growth is forecast for the naval systems market segment with revenues expected to reach $514.2 million in 2013. While there is expected to be a downturn in the number of platforms, existing ships are expected to enhance their littoral warfare capabilities. Sizeable outlays on new terminals and upgrades are likely to come with additional availability of MilSatCom. New applications are likely to include high bandwidth tactical data-links for the transfer of real-time situational awareness from high-value ISTAR airborne assets.

Several technological advances are transforming the market. SDR is poised to dominate the overall market, especially after 2010. Subsequently, two thirds of all tactical land systems are forecast to switch to SDR. Another exciting area of technological progress is likely to be in squad-level voice and data transfer. Soldier modernisation programmes are likely to be the launch pad for SDR's rapid takeoff.

Tentative research into high-capacity wideband radio technology is ongoing. The United Kingdom has just made a large acquisition deal with the possibility of more procurement. Data-links and the advance of the TCDL-type system is making notable progress in the United States. Together with the ISTAR platforms that are being procured in Europe, the demand for advanced wideband connectivity is envisaged to increase appreciably.

The US's positive experience with SatCom in the highly mobile Iraqi and Afghanistan conflicts is likely to encourage uptake in Europe. Impelled by the need for improved situational awareness, the pervasiveness of MilSatCom is expected to finally reach the tactical level in Europe.

"Larger system projects have typically dominated this market in the past but the market is now clearly moving toward incremental procurement as the nature of systems change, opening out the market," notes Frost & Sullivan Aerospace and Defence analyst Ben Moores.

The European tactical military communications market has been characterised by a high degree of fragmentation. A recent spate of mergers notwithstanding, the proliferation of traditionally civil companies that have begun to market COTS products to the military have swelled the number of market participants.

Thales has emerged as the real market leader in Europe. GD and ITT have also made strong recent gains with the mammoth Bowman project. Marconi-Selenia, set to merge with the residual BAE communication business, has also turned in a strong performance.

The plethora of products, applications and users is evolving rapidly with significant procurement of tactical-level radios, (which have customarily driven this market) unlikely before 2011. Therefore, fragmentation is likely to persist through 2010 and only companies able to optimise on next-generation applications and products are likely to succeed.

"Companies that grow in the future would be those that take advantage of the synergy between the various market segments and rapidly adopt the advancements in technology developed in the commercial world," concludes Mr. Moores. "Companies will also have to continually find new ways to improve their problem-solving capability as opposed to compliance as the market moves steadily away from large big bang-style procurement towards an incremental basis."

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