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by Mark Holmes

New Eutelsat CEO Michel de Rosen made a strong impression on the ‘The Big Four: Agenda for the Coming Decade’ opening panel at SATELLITE 2010, joining fellow executives from Intelsat, SES and Telesat to address issues such as launch services, Ka-band strategies, interference and growth potential in different markets.


   de Rosen said it was a good time to join the satellite industry. “Coming from other industries, what is striking is how prosperous the [satellite] industry is. It is highly unusual in 2009 to have a profitable and growing industry,” he said.


   But there are still plenty of issues that the large FSS operators and the rest of the satellite communications sector should address.


   Dan Goldberg, CEO of Telesat, said more launch capacity is needed to serve the satellite market as a whole. “Ariane and ILS have done a fantastic job. They are launching more satellites than they have done historically. The one area of concern is what happens if something happens —  and something always happens. These manifests are full, and if something happens, it could have a strong impact. We need to have additional launch capacity. I think it is important that there are more competitive providers, so that is reflected in pricing and the like. I think we will see other entrants in the future. We are very encouraged by SpaceX, and that they will be there in the near term,” he said.


   Intelsat CEO David McGlade added that more competition in the launch services market would bring innovation. “We worry about pricing as well as a launch failure. When you have a competitive marketplace, you get innovation. SpaceX is a great example. It is about ensuring that there is more diversity in terms of size of rockets. We want to make sure that pressure remains on,” he said.


   McGlade also said he believes there is a business case for U.S. launch providers to return to the commercial market. “The Americans are not in the commercial game any more. It has been a concern on pricing. If they sharpen their pencils, they can be profitable with the commercial industry. It is up to them to decide what they want to do. I think we can fill gaps in their manifest,” he said.


   While all the major FSS operators recorded strong revenue growth in recent years, all seemed to have different ideas of where we will see future growth. Romain Bausch, CEO of SES, said, “North America is the softest market. We are seeing good growth in emerging markets. The good news is that there is growth across different geographies and segments (backhaul, government, for example). The only cloud is that many of us are investing in a lot of additional capacity. We should not be surprised if fill rates are less aggressive because of the amount of capacity coming online. Our growth is not coming from price increases but from volume. We have 12 satellites under construction, which will add 28 percent new capacity. While the future is bright, in some geographies and markets, people will have to be patient,” said Bausch.


   McGlade said Intelsat’s growth plans were not necessarily down to adding huge amounts of new capacity but being more efficient in using the capacity available. “Over the next few years, we are not adding huge amounts of incremental capacity, but we want to become more efficient in the way we deploy capacity. We feel we are very disciplined. We are customizing the capacity more. We want to make sure we fully understand the demand models in every industry we serve,” McGlade said.


  de Rosen reiterated Eutelsat’s desire to become more of a force in Asia. “We believe there is more potential growth in Asia, and we are looking to what we can do to have more of a presence in Asia. The economies of China and India are growing faster than the ones in North America and Europe,” he said.


  McGlade was more cautious about the prospects in Asia. “Asia seems the natural place to expand, but you have a fragmented market plus regulatory issues. Some improvements have occurred, but they have been incremental,” he said.


  Goldberg said foreign ownership restrictions in place in Canada, which may be lifted in the future, were not helping the operator’s quest to become more of a force internationally. “We can’t use our equity in terms of doing deals — we would have to issue non-voting stock. This is not a wonderful situation to be in. We feel like as situations arise, under the current ownership restrictions, we show up with one hand tied behind our back,” he said.


  All of the operators were bullish about the military market. “We are trying to get governments to think differently in terms of using the commercial capacity,” McGlade said. “We sell X-band capacity, but it is not ours. I think the future is about hosted payloads. If you look at the economic model, it does not make sense for governments to build satellites. Satellite operators are the natural partners for government. There will be tremendous pressure on budgets, and we expect that to continue with years to come,” he said.


  Goldberg revealed that the next satellite that Telesat will commission will have an X-band payload.


  Bausch added, “Governments are much more open to commercial solutions in the military arena. It is even going beyond hosted payloads. We need to proactively anticipate market demand so that the solutions are in place for governments,” he said.


  Opinions differed on the broadband opportunity for satellite. Bausch appeared cautious about prospects in Europe. “When it comes to residential broadband, we are more conservative in markets like Western Europe. The regulators in major markets are taking decisions that are not in favor of satellite operators. I believe there is a challenge for the industry to raise their voice here. We are not convinced the political/regulatory frameworks are in place. We need to make sure satellites are not forgotten,” Bausch said.


  de Rosen believes the market opportunity is strong for Eutelsat’s Ka-Sat. “We think the addressable market is about 12 million to 13 million in Europe and 18 million in Africa. We are confident that we will get 750,000 users and (we are targeting) even more.”

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