[Via Satellite 03-15-2016] While assessing the many changes that have taken hold of the satellite industry over the past few years, operators at the “Satellite Executive of the Year (SEOTY) Winner’s Circle” panel debated a topic that remains unchanged for decades: the role of government-driven national satellite programs. Private satellite operators face the challenge of competing with government-backed programs around the world, as some governments deem owning one or more satellites a national priority. How commercial satellite companies compete with these players remains a quandary.

“The problem begins with a lack of access,” said Kalpak Gude, VP of legal and regulatory at OneWeb, who won a SEOTY award in 2007 when he was working as deputy general counsel at Intelsat. “Governments are investing to a significant degree to solve the problem of the last mile. The problem is reaching rural areas, … governments are flailing around trying to find solutions. One solution that some governments have reached is these national systems, and we have seen this. It is not a new trend, per se; it has been going on for quite some time. How do we solve that problem?”

This year’s SEOTY, Eutelsat Chairman Michel de Rosen, who recently stepped down from the role of CEO of the company, said the struggle between “nationalistic and irrational approaches” to the use of space, and “international, rational approaches” has been a persistent theme for decades, and remains very important in 2016.

“We see ideas of national satellites which would not be good for the final customer. We see this in broadcast, we see it in broadband, we see it in countless other areas. We see it everywhere,” he said.

Even in the last 12 months, several national operators have orbited new spacecraft for telecommunications services. In October 2015, an Ariane 5 dual launch carried satellites for ARSAT, Argentina’s government-owned satellite operator, and NBN Co, Australia’s government-run telecommunications company. Laos, Mexico and Belarus have also launched new satellites with full or partial government ownership.

“It has been a problem that has been around for a while,” said Mark Dankberg, chairman and CEO of ViaSat, and 2003 SEOTY, adding that, though his company is not in broadcasting, the rise of national satellite operators affects ViaSat as well. “We are also seeing countries do their own national systems for broadband data and actually they have the exact same characteristic, which is they are not economical.”

Tom Choi, CEO of ABS and SEOTY in 2013, refuted these statements, however, claiming instead that it is totally rational for some nations to pursue domestic satellite programs.

“I don’t think we, as a satellite industry, should be making a blanket statement that all national systems are not economical. They can be economical, and they should invest in them, because what is really happening in our industry: the top three to four operators have 90 percent market share in our industry. That means three to four countries are occupying 90 percent of the geosynchronous spectrum. The revenues that are generated are flowing from all of these countries around the world into these limited numbers of satellite operators and paying the taxes of three to four countries,” he said.

Choi said the flow of revenue from around the world back to only a select few nations saps less space-savvy countries of money that is not reinvested into their economies. He said that for some small countries, a national satellite may not make sense, but for others they are perfectly rational.

“I don’t personally believe that is necessarily a bad thing. Let’s take a look at a recent project in Bangladesh. What is the problem with Bangladesh having their own satellite?” he said, estimating that, as a country with around 150 million people, it probably has around 200 cable channels. The Bangladesh Telecommunication Regulatory Commission (BTRC) signed a contract with Thales Alenia Space in 2015 for a C- and Ku-band satellite. “That country can probably sustain minimum two or three satellite systems for providing [Direct-to-Home] DTH services or broadband systems … as a person and as a human being wanting to see fairness in the world, I encourage domestic systems to develop their own satellites so that they can rebalance the payments, develop their own infrastructure and their own people and talents.”

Dankberg responded saying that providing services in a foreign country does not constitute an issue of national sovereignty, since commercial operators are there to bring beneficial services, otherwise they have no reason for being present. ViaSat is just beginning it’s own global footprint, expanding from North America out into Latin America and Europe with the upcoming launch of ViaSat 2. Eutelsat is a ViaSat partner on the global ViaSat 3 system, helping the company enter the European market through a joint venture.

“I think we as an industry have an opportunity to offer them infrastructure that they couldn’t obtain any other way, or bring benefits to those countries that would be difficult to obtain without the Internet, but clearly we have to do it in a way that is not invading a country, but being invited,” said Dankberg.

De Rosen added that the concerns surrounding government satellite programs are not solely driven by profit seeking, but out of concern for the wellbeing of those nations as well. Some national programs are indeed for hubris, or are motivated by an incomplete understanding of the pros and cons of satellite telecommunications. When this happens, it creates problems for everyone.

“Recently, in fact more than once, I’ve had ministers from governments who were not European come to me and say ‘we were led to believe that if we had a national satellite, it would be great. So we got a cheap satellite, we were offered to pay it over a number of years, and so we did this deal.’ These ministers — more than once, and from more than one country — told me ‘now I have a problem, because I’m buying the satellite, I don’t have the rights, I don’t have the technical team, and I don’t have enough customers. Please help me.’ So we engage in discussions to see how we can help. My point is, we saw this in the airline industry also, where it was fashionable. You felt you were a sovereign nation if you had your airline, and then cost were bared.”