Hispasat is aiming to be a leader in bringing Ka-band capacity to Latin America. Its Amazonas-4B satellite, which will be launched in 2015, aims to bring a significant amount of high throughput capacity to the region where the operator is investing heavily to meet the needs in a number of different verticals. The company’s chief commercial officer, Ignacio Sanchis, talks about its capital expenditure plans in the region and why he thinks millions of households could join the satellite broadband revolution.

VIA SATELLITE: How do you view the potential for Ka-band and High Throughput Satellites in Latin America?

Sanchis: We are the first operator in the region that has launched a Ka-band payload. This is part of our Amazonas-3 satellite, which we recently launched, and started its operations this week. We are a first mover in the region in that respect. We see a big demand for residential satellite broadband services in the region, despite the efforts of the main telecoms operators to deploy other technologies such as fiber and 4G. The nature of the Latin American market will mean there will be huge parts of populations that will not be able to connect using terrestrial technologies. Therefore, we see a big demand for residential broadband but we also believe Ka-band can help us provide broadband services to corporations. Our forecast is really positive, which is why have committed to the Amazonas-4B that we will launch in 2015. This will be a full Ka-band satellite and reaching some of the major markets in the region.

VIA SATELLITE: Are there any plans beyond Amazonas-4B?

Sanchis: We have recently launched Amazonas-3. At the end of this year or very beginning of next year, we will launch Amazonas-4A, which is a full growth satellite that will provide us with a significant amount of additional transponders. We are launching Amazonas-4B in 2015 and we are opening a new orbital slot at 36 degrees west, where we are moving our Amazonas-1 satellite. We are looking at every opportunity, in terms of new orbital position, as well as new missions. It should be expected that we will increase our capacity and our fleet in the coming years.

VIA SATELLITE: What is the potential target market for residential broadband services?

Sanchis: I cannot provide an exact figure. Our research showed that in Brazil and Mexico there is a potential demand of millions of households for residential satellite broadband services. When you combine the expected pace of deployment of other terrestrial broadband networks with the expected increase of many population groups that today cannot afford these services but will in the coming years, the result is that millions of households are potentially customers. We see a strong demand over the next decade. The penetration of terrestrial technologies is a lot less compared to markets like Western Europe. If you go to Brazil, there is no way you will able to connect every household with fiber in the foreseeable future. Satellite is a much more appealing solution here. It does make economic sense.

VIA SATELLITE: You said millions of potential subscribers. Can you quantify that?

Sanchis: If you add all the countries together and the potential demand for residential satellite broadband, it will probably be in the high single digit millions. If you look at the demographics and socio-economic conditions, we see a potential demand in the high single digit millions.

VIA SATELLITE: Are you looking at any hosted payload deals in the region?

Sanchis: This is one of the opportunities in the market but we are more focused on building our own payloads and exploiting them ourselves. That is the cornerstone of our strategy.

VIA SATELLITE: What are the main challenges for Hispasat in Latin America over the next year? How much capacity are you looking to bring to market?

Sanchis: Latin America is a very important region for us since we derive around 50 percent of our revenues from it. Latin America is set to continue to have strong growth over the next decade, which is obviously determining our strategy. We are investing heavily in the region, and we will continue to do so. We don’t have enough capacity to meet all the demand that we see. Our fill rates are even higher than the regional average around 90 percent in Latin America, so there is a definite need for more capacity. The challenge and the strategy is to invest, and expand our fleet. We are focusing on this right now.

VIA SATELLITE: Which markets offer Hispasat the most potential?

Sanchis: Brazil and Mexico will drive most of the demand for broadband services, in particular for residential satellite broadband. So, there is strong potential to provide services to these markets.

VIA SATELLITE: What are the key trends in the Latin American region?

Sanchis: There is a very important growing media market in the region. DTH is expanding its capacity needs with new DTH operations being launched. Secondly, there is a significant increase in the number of HD channels that DTH operators are putting in their bouquets. In some of the big markets in the region, there is an increase in the local, regional channels being added. We expect DTH to be one of the main growth engines in Latin America. As we have said, the demand for broadband will also increase. You have oil and mining, which is an interesting vertical here; for example, Brazil is expecting to almost double its oil production with all this new production sites in the country, so communication needs will increase and satellite will play a role in that as well. There will also be a number of government programs in the region to reduce the digital divide and bring Internet and broadband to remote locations. Plus, you also have backhaul services for mobile networks. Many governments are pushing for universal coverage, as well as the deployment of new 3G and 4G services. This will lead to an increase in a demand for satellite capacity, particularly as operators look to serve rural areas. I think all of these verticals are going to drive growth in the coming years.