At the SATELLITE 2004 Conference and Exhibition opening general session, Panamsat CEO Joe Wright stated that strategic business maneuvers, instead of global operator-to-global operator consolidation, would hallmark near-term FSS industry growth. In other words, satellite operators were going to grow market share through more complete offerings serving more vertical markets with strategic asset acquisitions.

A year-and-a-half later, Wright followed through on his statement. This past summer, Panamsat signed an agreement with Alcatel for the acquisition of the EuropeStar-1 satellite and two orbital slots, giving Panamsat a stronger presence in the European and Middle Eastern markets.

Under the agreement, Panamsat gains the rights to the 45 degrees East and 47.5 degrees East orbital locations. Ownership of these orbital slots expands Panamsat’s reach, enabling access to new markets in Europe, Saudi Arabia and other parts of the Middle East, Africa and Asia.

"Our strategy right now is to focus on the markets that we know are growing and not to be everything to everybody," Panamsat CEO Joseph Wright told our sister publication Satellite News. "This acquisition gets us into Europe in a big way. Our customers, particularly our video customers, have been requesting this for some time. Likewise, it gives us the capacity we need in the Middle East for the U.S. government. It also gives us the capacity we need for our African customers," which lease capacity primarily for networking rather than video.

These markets are indeed growing. Regional programming continues to break from its respective boarders and reach viewers beyond its country of origin, penetrating global viewing markets and returning sizable profits to the signal transmitters. Now, Panamsat’s offering to its current customer base just strengthened and gave this operator some leverage in building a larger business in a market dominated by Eutelsat and SES.

Likewise, broadband transmission within these regions also is gaining momentum. The acquired footprint that now casts Panamsat service in the Middle East and Africa will most surely give this U.S. operator its long-awaited boost in growing its government relationship with the U.S. Department of Defense and offering a much more diverse platform for enterprise clients to sign contracts.

The acquired satellite, renamed PAS-12, will enable Panamsat to provide a range of services such as direct-to-home and high-definition television transmissions, on-demand satellite services, digital satellite news gathering, as well as support for government communications.

Panamsat said the satellite is expected to contribute approximately $12 million to $15 million of EBITDA (earnings before interest, taxes, depreciation and amortization) per year. Wright added that the earnings would come from existing contracts on the satellite, which currently is about 40 percent utilized.

So after battling many market challenges, Panamsat is returning to growth. Wright, who navigated Panamsat through the telecom bust and an ownership change, always favored small strategic moves over large strides and this latest acquisition personifies that philosophy.

It will be interesting to see if other satellite operators follow with similar transactions. Either way, Panamsat is demonstrating that satellite-enabled platforms for both data and programming can sustain growth if proper business models are executed. It is such business models that keep the interests of investors, further fueling the growth of the global satellite market place.