“The satellite industry is living the golden dream in Latin America, but this golden dream is also a nightmare considering the lack of available capacity. These operators have been surprised by the exploding demand of capacity, the launch of several DTH platforms, as well as government projects to further develop the information society. Usually, new capacity is acquired very quickly. The satellite industry has always been under pressure to look ahead to foresee the future use of capacity,” Schuler said.

   Carlos Placido, an analyst at NSR said that as operators frantically look to launch new satellites to meet demand, an oversupply situation could actually develop in the next few years if too much capacity is brought into the market too quickly.

   “Most capacity coming into the market is pre-booked and there are certainly capacity-heavy initiatives at full-swing to make good use of such capacity. However, it is worth noting that Latin America is attracting an increasing number of players because of the region’s recent performance and economic growth so there is a risk of over-estimating the region’s long-term potential as more players independently plan for additional capacity,” Placido said.

   Telefonica is one of the world’s biggest telcos, and is particularly strong in the Latin American region, which is one of the main targets of its international strategy. It operates all across the region, and is seen as one the blue chip customers for satellite capacity in Latin America. MNLA is a business-to-business DTH provider with more than 300 SD and HD channels on satellite. 

   Schuler says satellite technology can complement a telco or a cable operator’s TV offer in certain areas, as using satellite reduces time to market, saves capital expenditure dollars, enables operators to expand their business and remains a key way for telcos in the region to overcome geographical limitations.

   “We have created a DTH platform to optimize satellite capacity. Telcos are able to partially cover the rest of the demands that come from the backhaul, broadband services, mobile telephony and other offered communication. We currently service 16 clients, which are present in 13 countries. However, as I said, the capacity challenges faced by the satellite industry situation could become unbearable,” said Schuler. 

   While the demand for satellite capacity is likely to be fuelled by a drive to DTH, Schuler says that in the medium-term, this could change and see satellite broadband have more of an impact in the region. “The satellite solution may not initially cover this broadband demand, but next-generation satellites will solve this and become an ideal partner for this service. In our view, the next two years of growth for satellite players will come from DTH/broadcasting, with new services like satellite residential broadband and government projects increasing the capacity demand after 2012,” he said.