Peter Shaper’s introduction to the satellite communications sector occurred while he was a partner in a private equity firm. Research into telecom companies that were “undervalued” led to CapRock Communications. Shaper’s interest was piqued to the point that he became CEO in 2002 when his firm acquired CapRock. His vision reshaped CapRock from primarily a domestic supplier into a global communications powerhouse, and Shaper was rewarded in 2009 when CapRock posted a strong performance in a down year for the global economy.

When Shaper arrived at Houston-based CapRock, the company’s business was to provide communications to remote locations — mainly to energy companies operating in the Gulf of Mexico, Europe and West Africa. While the business was strong and represented 90 percent of CapRock’s revenues, Shaper wanted to set CapRock on a path that would expand its size and scope and provide more stability through the ups and downs of the energy market. “What got me excited was that CapRock was serving the most reputable customers in the energy marketplace, and those customers wanted more of our services in the new regions they were moving into. This was a great opportunity and a good chance to grow in a fragmented industry.”

Our readiness to invest in technology, infrastructure and people provided us with new opportunities that we were able to capitalize on.

Shaper also directed CapRock into a stronger position in the government services market, spurred by the acquisition of Arrowhead Global Solutions, and into the commercial maritime vertical, with the launch of SeaAccess Communications, both in 2007. CapRock tripled its revenue in four years and ranks as one of the globe’s largest satellite communications service providers.

Today, Via Satellite’s 2009 Satellite Executive of the Year guides a company that employs 700 people and operates self-owned and operated teleports in Houston, Scotland, Brazil and Indonesia; 11 regional support centers, four network operations centers and partner networks strategically located around the globe.

Shaper spoke with Via Satellite Editor Jason Bates about guiding CapRock’s business and geographic expansion.

Via Satellite: What was your vision for CapRock in 2002?

Shaper: We quickly identified new opportunities both to expand relationships with our existing energy customers as well as to enter into new vertical markets. The government, maritime, mining, disaster recovery, and engineering and construction markets all showed strong demand for a dependable, worldwide communications provider. This coupled with our readiness to invest in technology, infrastructure and people provided us with new opportunities that we were able to capitalize on.

Via Satellite: How did your primary vertical markets perform in a difficult 2009?

We targeted a few markets that fit our specific competitive advantages and have invested heavily in them.

Shaper: For the energy market, 2009 was a challenging year across the board. Drilling was down with oil and gas price volatility and a hesitant investment community. Rigs were stacked. Activity was slow, particularly onshore and in shallow water areas. We were fortunate to grow due to contracts we won in 2008 and 2009 and were able to keep gaining market share. We also expanded our worldwide presence and capabilities to meet customers’ needs as their operations took them to more distant and difficult geographic locations in search of untapped reserves.

In the government space, we acquired Arrowhead in 2007, and Tom Eaton was selected to lead the business with a shift in focus and strategy. We have invested more heavily in business development and getting closer to the customers so that we could better understand their problems. As a result, we were able to develop and tailor products specifically to our customers’ demanding environments. Previously, Arrowhead focused more on selling bandwidth. Today, we are providing full turnkey services and leveraging CapRock’s global assets. The strategy began to pay off in 2009 with more than 30 percent revenue growth.

2009 was also a tough year for the commercial maritime market. CapRock has long been in the energy maritime market, but we entered the commercial maritime market in the middle of 2007, as the movement from pay-by-the-minute service to always-on broadband connection was picking up steam. We have won a number of contracts, and nearly 100 ships with our SeaAccess service are operating right now. In 2009, our sales pipeline was strong, but not many customers were prepared to invest additional money given how difficult the economic times have been for shipping companies. We have seen a lot of fleets doing pilot programs but waiting to see if the economics for the industry come back before signing fleet-wide contracts. As the market rebounds, we expect to see a real explosion in the commercial maritime sector.

Via Satellite: How has the definition of service changed in these markets?

Shaper: Five years ago, there were no true global service providers. The big energy customers — Exxon, BP, Halliburton, Transocean — didn’t have one provider that could meet their needs around the globe with truly consistent service. They had to use different providers in each region. As a result, the service they received in Asia was not the same as the service they got in South America, which was not the service they got in Africa. We had to invest in technology, infrastructure and talented technicians around the world and marry those with partnerships with critical third parties. These investments enabled us to be truly global, delivering the same consistent service, which is very important to our global customers. They want to outsource their global communications to one provider so they can focus on their business.

In the government market, the key trend is movement towards buying full turnkey services in the way the commercial markets do rather than buying the components and pulling them together on their own. We’re actively pushing that trend. We have always sold bandwidth, teleport services, professional services and backhaul capabilities. Now the key is to understand our customers’ requirements so that we can pull together all the pieces into turnkey solutions that are more valuable for those customers.

In the maritime area, the market shift is about customers deciding they need an always-on broadband solution. This is driven by many reasons, such as spending too much on by-the-minute services, desire for predictable costs, requirements for crew retention, requirements for additional data from ships before they get to port, and applications that use real-time information to drive efficiency in operations. CapRock was already positioned with maritime expertise and equipment around the world, so we have been able to take advantage of the market moving in this direction. We just had to help customers understand we were ready to go.

Via Satellite: Has your government business met expectations?

Shaper: It has exceeded our expectations. Long before we acquired Arrowhead, CapRock served the government indirectly through prime contractors. Initially, Brown & Root, the predecessor to KBR, asked us to support a mission in Bosnia because they knew what we provided in the energy industry. We were very successful in providing everything that they needed and are still there to this day. We grew with the primes and built a good track record as an indirect provider to the government. We thought we should be more of a direct provider, but we ran into traditional circular logic in that to compete as a prime you have to have security clearances, but you can’t have clearances unless you have contracts. We were fortunate to find a company which was a great fit for us, and we acquired Arrowhead so that we could leverage each others’ strengths.

Via Satellite: What do you want the mix of your revenues to be?

Shaper: When I first became involved with CapRock, more than 90 percent of revenue was from the energy market. We knew the strategy needed to evolve so that the company would be more diversified and, hence, better able to weather the cyclical nature of the energy business. We targeted a few markets that fit our specific competitive advantages and have invested heavily in them. Today, our revenues are more equally spread across both the energy and government markets with the investments we are making in new verticals, such as commercial maritime, beginning to pay off.

Via Satellite: What technology advancements have played the biggest role in your business development?

Shaper: More than anything else, the critical need for increased efficiency has spurred the development of several technology improvements in recent years. These improvements were driven by the extremely tight capacity we’ve been seeing, along with escalating satellite bandwidth prices. Close interaction with our customers made us realize we needed to find a way to do more with less; basically increasing delivery using the same bandwidth. We can now deliver more for customers per dollar spent due to developments such as TDMA and Carrier-in-Carrier. Along with this, we’ve seen some extraordinary improvements in management tools. For our government customers in particular, we’ve been able to provide advanced bandwidth management concepts, including bandwidth portability and network optimization tools to help ensure worldwide deployable capacity.

Via Satellite: What are your expectations for 2010?

Shaper: At the end of 2009, we started to see a slight uptick in the energy market. While I don’t have a crystal ball as to when, we know the energy market will rebound at some point. There is simply too much demand for the current production levels to continue. This will lead to rigs coming out of stacked status as well as a possible increase in the number of new rigs being built. On the government front we continue to see the movement toward buying a fully managed solution. Rather than simply providing satellite capacity or components, a managed service ensures a fully integrated solution, where all the components work together, providing more efficient use of limited resources.