[Satellite News 07-20-10] Satellite telecommunications service provider SpeedCast may look to make an acquisition in Africa in 2011 to boost its business in the region, SpeedCast CEO Pierre-Jean Beylier told Satellite News.
    The company, which saw strong revenue growth in 2009 and expects strong growth in 2010, wants to establish a stronger position in the Middle East and Africa in order to diversify its business.
    Beylier discussed SpeedCast’s future plans to sustain the growth curve in Asia and replicate success in Africa as well as efforts to jumpstart the slow-moving mobile TV market and capitalize on the energized maritime sector.

Beylier: We grew revenues by 43 percent in 2009 and we see that trend continuing this year, as we are on track for 25 to 30 percent growth in 2010. That 25 to 30 percent will come from the emphasis we have put on our maritime business, which is proving to be a strong growth engine for us. Revenue growth is not just about the number of vessels but also about the services you offer to those vessels. You have basic connectivity as well as more advanced applications. I think as the market matures, you will see the market for value added services grow more and more
In 2009, maritime represented a minority of our revenues but was growing rapidly. This year it will be even more. Maritime revenues grew by 104 percent in 2009. We anticipate over 100 percent growth in 2010, as well as we will cover a few different market segments in the maritime sector this year. It is important to realize that the shipping companies have not recovered yet from the economic recession, however, we are seeing growth coming from oil and gas-related vessels, supply vessels, cruisers, energy carriers, some yachting and military/police.

Beylier: We are riding the Afghanistan wave just like many other service providers. There are only a few C- and Ku-band satellites that cover Afghanistan well. We still see strong growth in that market, which has surprised me. We thought there would be much more churn on pricing, but we are finding that there are a number of customers on the ground that value quality and are willing to pay a premium for it. In other Asian regions, we have opened offices and subsidiaries in Beijing, China, to support Chinese customers and their requirements outside of China. Most importantly, we have just opened an office in Dubai. It is a goal of ours to support our customers’ requirements as they go into the Middle East and Africa. In Africa, we would like to replicate what we have done in Asia. When I look at today’s Asian market and the infrastructure there — hubs, teleports, engineers on the ground, etc. — I don’t think there are any companies like SpeedCast with a really strong pan-Asian capability. We would like to build that same capability in Africa. We see these as the two regions where there will be strong growth over the next 10 years. 

Beylier: It will take a long time, but we may explore an acquisition in 2011 in order to accelerate that process. Right now, we need to understand this market and define exactly how we want to play in it. We are also seeing real progress in the maritime and oil and gas businesses in the Middle East. We want to better support our partners there. This drove us to open the Dubai office. There is also a growing need to establish better communications links between Asia and the Middle East/Africa region. We cannot provide good service between Asia and Africa by staying in Asia, so we need to be on the ground in Africa.

Beylier: We’re looking at regional service providers in specific markets as potential partners. We are not looking to serve the whole of Africa. Eastern Africa will likely be a focus for us, as a lot of Asian enterprises are investing there. I don’t think you will see us in Nigeria, for example. We are still analyzing the market and understanding what is required.

Beylier: It is difficult to say. We don’t usually aim at 43 percent growth. We usually aim at 25 to 30 percent growth, which is challenging enough. To achieve that, we have to build growth engines that we are confident about. We think Africa can help us grow. When you see our growth in Asia at 43 percent, it shows we are doing certain things well. We are certainly putting a lot of focus, time, and money to ensure the quality and reliability of our services and operations, and we will apply the same principles in our approach to Africa.

Beylier: We are looking to do more deals in mobile TV, even though the market has been slow. We were expecting a surge of mobile TV launches in 2010, but it hasn’t happened, and certainly not as fast as we thought it would happen. Nevertheless, we are building out significant capabilities and we want to make these capabilities available to broadcasters to enable mobile specific content and services. This is another focus for us, and this is what we are doing with ESPN. It is about encoding, streaming and delivery using a satellite platform and bringing content to mobile operators around the region.

Beylier: I think there is a lot of work to do around the business model for content. We have been surprised that mobile TV has not caught on, but we have also had some good experiences and some success stories. We are working very closely with CSL in Hong Kong, where we have launched the first mobile Indonesian and Filipino channels. These are niche markets where the phone is not only a tool to communicate but also an entertainment device. This shows that when you have the right pricing, the right content and targeted marketing, it works. We are trying to learn lessons from the experiences we have had so far, however, while mobile TV has not done well so far, I am still convinced it has the potential to be huge in Asia due to demographic and social reasons.