[Satellite News 01-26-10] The relationship between Latin America’s capacity demand and capacity supply continues to amaze analysts who project growth for operators despite a slowly recovering global economy and limited financing resources.
    NSR Senior Analyst Patrick French told Satellite News that high demand is bring driven by e-government, long distance learning, DTH services, video distribution and wireless backhaul. “Revenue has gone up for two reasons. First, because more capacity has been leased and second, because pricing of the capacity of the tighter supply has pushed up pricing in the last three or four years.”
    The Latin American bandwidth market seems to defy logic in the era of global recession-minded business models. In the Ku-band market, with more than 300 Ku-band transponders over Latin America, the utilization rate stands at close to 84 percent. Despite the high demand, no country in Latin America has independently built a true commercial communication satellite due to the continent’s limited financial resources, forcing the demand to be met with the help of foreign infrastructure.
    According to Andrea Maleter, technical director at Futron, “there is a fair amount of private equity money still going into (Latin America’s) satellite business. Latin American telecoms, in general, have seen a fair amount of consolidation. Telefonica, which has acquired so many companies around the region, has not had a problem gaining financing for things that they want to finance. But you have so many other operators moving in.”
    Maleter cites Brazilian telecommunications group Oi’s purchase of its rival Brasil Telecom in August this year as an example of this expansion. “There has been a certain amount of consolidation of all telecom activities. So of the kinds of financing that will be available, they will be varied and the fact that you do have some close (financial) relationships with both European and U.S. companies from an operating perspective. Maleter believes there are other interesting markets to look at in the region,” she said.
    In September, Astrium announced that it will supply Argentina’s first satellite, Arsat 1, which is scheduled to be launched in 2012 and will provide coverage across Latin America. In July, Telesat ordered the Telstar 14R satellite from Space Systems/Loral. The satellite, scheduled to be placed in orbit in mid-2011 by International Launch Services (ILS), will add to the Ku-band capacity over Americas and the Atlantic Ocean region.
    Nigel Gibson, vice president of international sales for Telesat, said that while many of the new satellites planned for the region were announced before the recession, new plans for the region continue to emerge. “I believe Bolivia announced just a short while ago that they’re going to be pursuing a satellite with a Chinese vehicle. I guess China Great Wall is going to deliver the whole thing to Bolivia for $300 million and launch it in 2013,” said Gibson.
   Intelsat added itself to the list of post-recession investors when it awarded a contract to ILS in March to launch Intelsat 16, which aims to add more Ku-band capacity to support expanded services to direct-to-home customers in Latin America.
     Doron Elinav, vice president of marketing and business development of Gilat Satellite Networks, said that Latin American telecom operators are striving to meet increasing demand. “We don’t see the (vertically integrated consumer market) per se as really a big potential industry. What we do see is a mix of enterprise, government projects as being the big drivers. Internet connectivity is probably the number one application.”