Satellite 2011: The Satellite Industry is Well Positioned to Meet New Challenges

by Virgil Labrador, Editor-in-Chief with reporting frm Elisabeth Tweedie 

Washington, D.C., March 18, 2011-- The 30th anniversary edition of the Satellite show held in Washington, D.C. from March 14-17 was like a big coming out party for the industry. Having just survived one of the worst global recessions relatively unscathed,  the mood at the show was decidedly bullish.   Senior industry executives speaking at the conference were almost unanimously positive on the industry’s position yet they also recognize that there are still many challenges ahead. 

 “The satellite industry has proven its resilience during the global downturn and as a consequence is in a better financial situation in the market,”  said Astrium’s CEO Eric Beranger during the CEO panel.  The other CEOs in the panel agree that funding for growth is readily available in the public and private equity markets. 

The CEOs in the “Big Four” panel consisting of Intelsat, SES, Telesat and Eutelsat were also very positive and expect continued growth in the next few years. As to where the growth will be coming from, SES CEO Romain Bausch was bullish about the emerging markets in  Africa, the Middle East and Latin America.  He said that in the next four-five years SES will be adding 20 percent to  their overall capacity and 80-90 percent of that new capacity will be for emerging markets.  SES World Skies’ CEO Robert Bednarek added that in addition to the emerging markets, there is opportunity in the diversity of applications that satellite is now in demand such as the internet, military and vertical markets such as enterprise and oil and gas, among others. 

A lot of the demand for bandwidth will be driven by the need for broadband access.  Much attention was given the upcoming High Throughput Satellites (HTS) such as Viasat-1 and Hughes’ Jupiter satellite which will be serving the consumer market in the U.S. Video driving demand for higher bandwidths for broadband to the home and the new HTS satellites will be able to meet some of this demand.   

HTS satellites have been launched recently in the Middle East using Ka-band  and a being closely watched by operators in other regions such as Latin America and Asia.The Asian satellite market was the focus of one panel dubbed “Asia-Pacific: Winning One Country Market at a Time,” which featured Asia Broadcast Satellite CEO Thomas Choi, Asiasat Chairman Peter Jackson, Speedcast CEO Pierre-Jean Beylier,  Singtel Satellite VP Titus Yong and Thaicom’s VP Marketing Patompob Suwansiri.  Despite its size and potential, Asia remains a fragmented market which poses some regulatory challenges according to the panel.  Speedcast, which is based in Hong Kong, for example, has been trying for years to get a license to operate a VSAT network in China, without any success. The regulatory and other market barriers to certain countries has forced companies like Thaicom’s IPSTAR service to focus on countries with favorable market environments like Australia.

In a panel called “Does New Media Need Satellites,” speakers noted that the demand for broadband services is  changing the  business in significant ways.  Scott  Sprague, SVP of Global Sales of SES World Skies said that the “business model is  changing but  slowly.”  Gary Hatch, CEO of ATCi, said that the  satellite industry has to “embrace change” to remain relevant.  He said that the satellite industry is losing its drive which was very instrumental in its development.  He said that the industry can benefit from an influx of young people with passion and drive for technology.

In a keynote luncheon address, Ed Horowitz, Director of US Space LLC discussed the changes of the last 10 years and his views on the prospects in the next 20 years for the industry .  “There is an impending conflict between media distributors and media providers. New media is growing faster than traditional media. It is about carrying your content around with you. New media consumers want to do more than just consume available information. They want to create it, “ he said.

“Five out of the ten fastest growing websites have user-generated content. Very soon, 50 percent of the workforce will be Generation X and Generation Y. 2011 marks a new rubicon for our business. Traditional media connections are changing. The new model is an open model with a direct connection between the consumer and media,” added Horowitz.The Satellite show is also an opportunity to showcase new and upcoming product and services.  Satellite manufacturer Boeing used the opportunity to put the spotlight on its recent launch of its Boeing Commercial Services unit that will focus on developing “hosted payloads” for government customers.  

Hosted payloads are an alternative to incurring the cost of building and launching a full satellite and providing the option to lease a fraction of a satellite. Companies such as Intelsat and Inmarsat, among others, have been marketing hosted payloads to government entities for some time now and the idea has gained new relevance amid the looming cuts in the military’s  budget and several  high profile cancellation of military satellite programs such as the TSAT program.

A new satellite venture called Vivisat also took the opportunity to promote their Mission Extension Vehicle designed to prolong the life service life of in-orbit satellites.   The venture plans to launch the first spacecraft in about three years. The spacecraft will provide propulsion to a satellite near the end of its service and can be used for other applications such as relocation to different orbits, de-orbiting and rescue and  re-orbiting of satellites stranded in incorrect orbital slots.

While Vivisat is still shopping around for its first customer on its service, Intelsat announced at the satellite show that it has signed a satellite servicing agreement with McDonald Dettweiler (MDA) which will launch its Space Infrastructure Services (SIS) vehicle in three and a half years with Intelsat as its first customer. The SIS vehicle can refuel satellites and provide other services such as repairs through robotic mechanism in the spacecraft. Intelsat’s CEO David McGlade called the new service a “game changer.” 

The 30th Satellite show was the largest ever attracting over 10,000 participants and over 300 exhibiting companies from all over the world.   The lively discussions at the conference and the bustling activity on the exhibition floor was certainly reflective of the vibrancy and long-term viability of the   industry as a whole.

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Virgil Labrador is the Editor-in-Chief of Satellite Market and Research based in Los Angeles, California. He is the author of two books on the satellite industry and has been covering the  industry for various publications since 1998.  Before that he worked in various  capacities in the industry, including a stint as marketing director for the Asia Broadcast Center, a full-service teleport based in Singapore. He can be reached at virgil@satellitemarkets.com