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Steve Collar took up his role as the new CEO of O3b Networks in March, replacing Mark Rigolle who had succeeded in securing a financial package worth around $1.2 billion to give O3b time and space to make good on its ambitious business plans.
Like Rigolle, Collar was a former SES executive, and his focus has been placed on securing deals with the service providers and telcos that are key to O3b’s future. While dealing with the outside perception that the company is primarily targeting Africa, Collar emphasizes that O3b is a global company. To underline the point, the company announced it is weeks away from securing its first breakthrough deal in Latin America. Collar spoke with Via Satellite about the Latin American region, as well as where he sees the main targets for growth for the operator.
Via Satellite: We have had a lot of coverage in recent months on Latin America. How do you view the growth opportunities in this region and when might you start signing contracts in this region?
Collar: O3b is a global company with a global footprint from the day that it launches and the gratifying thing is that we have already signed customers all over the world including Africa, the Middle East, South Asia, and Asia Pacific. And among the most exciting, we will be announcing our first customer in Latin America in the coming weeks. With this, we can say that we are a truly global company with global customers.
More broadly, we see tremendous opportunities in Latin America. The region remains relatively underserved from a telecoms standpoint while the market is incredibly strong. The operators within Latin America are rolling out new networks and expanding the footprint of their existing networks. The economies are very strong with Brazil remaining the driving economy in the region but the Andean countries and Argentina are also on the up. The geography and the demographics lend themselves naturally to satellite and, given the unique characteristics of O3b, we have a really strong hand to play in Latin America.
PLAY VIDEO: Steve Collar talks to Via Satellite Associate Editor Mark Holmes about the operator’s plans to tap into the Latin American market |
Via Satellite: How would compare Latin America with Africa in terms of potential growth?
Collar: There are key differences in infrastructure development between Latin America and Africa. Africa has only relatively recently been supplied with substantial fiber optic submarine cables while in Latin America that happened as much as 10 years ago. There are also important economic differences as over the last 3 or 4 years we have seen the Latin American economies developing extremely strongly while in Africa, growth has largely been focused in the five or six larger economies. Finally there are demographic differences in terrain and population location, which can be a driver for satellite and O3b in particular. In Latin America there are medium to large cities, which are not necessarily easily accessible to fiber, and there are also significant populations that live reasonably distant from the main metropolitan areas.
The challenges in Africa are a little different where we see some highly developed economies where infrastructure is developing quickly. Given that Africa has formed its telecom networks on mobile technology, we see O3b playing a key role in these rapidly developing countries providing the highly demanded backhaul solutions for mobile network operators. However, there are also numerous countries in Africa that are at the other end of the development scale where we aim to bring broadband connectivity solutions that will lead to social and economic development within the region.
Via Satellite: How do you look at the revenue split between Africa and other regions?
Collar: We will be relatively evenly split between Latin America, Africa, the Middle East / South Asia and Asia Pacific. We expect that Africa will make up about a quarter of our revenue.
Via Satellite: Is everything on track for the launch of the first set of satellites?
Collar: Everything is on track. We are maintaining the same amount of margin that we did when we kicked the program off with Thales in November 2010. Coming through the Critical Design Review (CDR) without losing any of our schedule margin is really something very pleasing and pretty unusual. Of course there is a long way to go and the exciting times are ahead as we start to see components arrive and integrated onto the platforms. We are on schedule.
Via Satellite: What position would you like O3b to be in by launch?
Collar: From a sales perspective we should be well on the way to filling the first eight satellites while obviously having completed the engineering work; spacecraft operations; network operations; gateways; customer installations etc. I would also like to see us with more satellites under construction. O3b was never intended to be an eight-satellite network. We have a fantastically scalable system. The more satellites we add to our constellation, the more capacity we can provide to our customers worldwide, the more efficient our satellite networks become and the more value we can provide to the market. It is our ambition by the time we launch our first set of satellites, we will have more satellites under construction ready to fulfil our customers’ needs.
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