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[Satellite News 09-09-09] CEOs of the four largest FSS operators, Intelsat, SES, Telesat and Eutelsat, discussed the state of their businesses and future growth strategies on a panel at Euroconsult’s World Satellite Business Week in Paris. ‘Strategies of Global FSS Operators in a Global Crisis," put the industry leaders on the same stage and addressed an industry which has seen its share of fortune and failure in an economic economic crisis.
With Sea Launch going into bankruptcy in the United States, the issue of launch services was one of the key talking points, as the CEOs expressed their concerns over a limited market caused by fewer options. Intelsat CEO David McGlade said that his company would look to help Sea Launch in the interests of market diversity, if it could. “When you look at launch vehicles. We have concerns. Sea Launch going into bankruptcy puts a lot of pressure on other launchers. Sea Launch is not on its own. We do not want to see liquidation,” he said.
“We are very satisfied (with the launch service providers). The launchers are improving in their reliability. We think that there are two main suppliers today. But, there will be a real problem if something happens,” said Giuliano Berretta, CEO of Eutelsat Communications.
While examining the potential of emerging markets, the operator CEOs were bullish about their growth prospects despite difficult economic conditions. Romain Bausch, CEO of SES said that he expects a lot his company’s growth to come from emerging markets over the next few years, with the majority of new transponders on satellites designed to serve these markets under construction. “Our growth will be fuelled by the nine satellites under construction. In our case, out of these 204 additional transponders, 170 are going into emerging markets. Africa, the Middle East, Asia, Latin America,” he said.
Bausch admitted that he expected the North American market would potentially be the most challenging one for the operator. “The North American market is the most challenging and you will not see a lot of additional capacity put in this arc. We stopped IP-Prime. The problem was the business model where our revenues were purely variable. We were dependent on these telcos marketing. It might still be an opportunity, but not for us,” said Bausch.
Dan Goldberg, CEO, Telesat believes the operator is seeing good growth in both its North American business and international business. “There are opportunities for growth in the North American market, where we have C-band availability. The oil and gas market has been depressed in North America, but that will recover. Our growth has principally been driven by new capacity. We have increased the fill rate on our international fleet. For both the international and North America fleet, we have a fill rate in the mid-eighties," said Goldberg.
McGlade said Intelsat was seeing “tremendous growth” in sub-Saharan Africa. A recent deal with Vodacom in South Africa showed a renewed demand for long-term deals, which, according to McGlade, was not there a few years ago. “Vodacom is using satellite for cellular backhaul. It is a 15 year contract. I would never have considered five years ago that you could sign this sort of deal,” McGlade said.
In terms of the operator’s growth prospects in Asia, McGlade said that the Asia Pacific region is highly variable. "We have seen demand for new capacity. We have the Australian government payload on one of our satellites, as an example of a new type of deal. We look for opportunities. We continue to look at places like India. But, there are still regulatory issues there,” said McGlade.
Core growth markets for Eutelsat such as Eastern and Central Europe could see change as well. “There will be a rationalization in the Eastern European DTH markets. But, I don’t think there will be a reduction in the demand of the capacity. There is more fragmentation in these markets. There are six platforms in Romania, for example. But, I am very positive about central and Eastern Europe. Tricolor went to five million subscribers in three years in Russia,” Berretta said.
With Sea Launch going into bankruptcy in the United States, the issue of launch services was one of the key talking points, as the CEOs expressed their concerns over a limited market caused by fewer options. Intelsat CEO David McGlade said that his company would look to help Sea Launch in the interests of market diversity, if it could. “When you look at launch vehicles. We have concerns. Sea Launch going into bankruptcy puts a lot of pressure on other launchers. Sea Launch is not on its own. We do not want to see liquidation,” he said.
“We are very satisfied (with the launch service providers). The launchers are improving in their reliability. We think that there are two main suppliers today. But, there will be a real problem if something happens,” said Giuliano Berretta, CEO of Eutelsat Communications.
While examining the potential of emerging markets, the operator CEOs were bullish about their growth prospects despite difficult economic conditions. Romain Bausch, CEO of SES said that he expects a lot his company’s growth to come from emerging markets over the next few years, with the majority of new transponders on satellites designed to serve these markets under construction. “Our growth will be fuelled by the nine satellites under construction. In our case, out of these 204 additional transponders, 170 are going into emerging markets. Africa, the Middle East, Asia, Latin America,” he said.
Bausch admitted that he expected the North American market would potentially be the most challenging one for the operator. “The North American market is the most challenging and you will not see a lot of additional capacity put in this arc. We stopped IP-Prime. The problem was the business model where our revenues were purely variable. We were dependent on these telcos marketing. It might still be an opportunity, but not for us,” said Bausch.
Dan Goldberg, CEO, Telesat believes the operator is seeing good growth in both its North American business and international business. “There are opportunities for growth in the North American market, where we have C-band availability. The oil and gas market has been depressed in North America, but that will recover. Our growth has principally been driven by new capacity. We have increased the fill rate on our international fleet. For both the international and North America fleet, we have a fill rate in the mid-eighties," said Goldberg.
McGlade said Intelsat was seeing “tremendous growth” in sub-Saharan Africa. A recent deal with Vodacom in South Africa showed a renewed demand for long-term deals, which, according to McGlade, was not there a few years ago. “Vodacom is using satellite for cellular backhaul. It is a 15 year contract. I would never have considered five years ago that you could sign this sort of deal,” McGlade said.
In terms of the operator’s growth prospects in Asia, McGlade said that the Asia Pacific region is highly variable. "We have seen demand for new capacity. We have the Australian government payload on one of our satellites, as an example of a new type of deal. We look for opportunities. We continue to look at places like India. But, there are still regulatory issues there,” said McGlade.
Core growth markets for Eutelsat such as Eastern and Central Europe could see change as well. “There will be a rationalization in the Eastern European DTH markets. But, I don’t think there will be a reduction in the demand of the capacity. There is more fragmentation in these markets. There are six platforms in Romania, for example. But, I am very positive about central and Eastern Europe. Tricolor went to five million subscribers in three years in Russia,” Berretta said.
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