The satellite industry will be facing serious challenges in raising new capital and credit due to the downturn in the world financial markets. This was the gist of a whole-day ISCe Satellite Investment Symposium (ISIS-NYC) held at the 3 West Club in midtown Manhattan, New York last October 13, 2008.
The satellite industry will be facing serious challenges in raising new capital and credit due to the downturn in the world financial markets. This was the gist of a whole-day ISCe Satellite Investment Symposium (ISIS-NYC) held at the 3 West Club in midtown Manhattan, New York last October 13, 2008.
The third annual ISIS NYC ’08 featured key satellite industry executives, financial analysts, private equity representatives and bankers who discussed current and future funding and growth opportunities for the commercial satellite industry.
Craig Moffett, Managing Director, Sanford Bernstein said at the conference that "any business plan that was done four weeks ago has to be thrown out the window. Business models have to have a paradigm shift—in a very profound way as financing sources are just not there anymore. Projections may no longer be realistic and sustainable in this new environment."
There will be deleveraging in the industry that will restrict access to capital. And expect that there will be stricter scrutiny in terms of capital acquisition," said Rich Valera, Senior Analyst, Needham Securities. "Companies who can finance themselves from pure cash flow rather than credit will have a significant advantage," he added.
The keynote speaker during the luncheon was the Chief of the International Bureau of the Federal Communications Commission, Helen Domenici. Domenici affirmed that "FCC is here to support the US satellite industry. emergency communications and disaster management.
Other keynote speakers were David Meltzer, Senior Vice President for International Services, American Red Cross, who kicked off the morning session and Mark Dankberg, Chairman & Chief Executive Officer, ViaSat , who gave the concluding remarks. Meltzer spoke of opportunities in the non-profit sector, specifically in disaster and emergency communication while Dankberg spoke of the prospects in the commercial sector. Dankberg is very bullish on the prospects of the broadband satellite market. Viasat is building a new satellite broadband service in the US set to launch in 2011.
One session dubbed "Analysts Spotlight on the Wall Street Meltdown" featured exclusively financial analysts from Wall Street. The panel consisted of Hoyt Davidson, Managing Partner, Near Earth LLC; Todd Mitchell, Vice President, Equity Research, Cable & Satellite, Interactive Entertainment, Kaufmann Brothers, L.P.; Craig Moffett, Managing Director, Sanford Bernstein ; James Ratcliffe, Vice President, Barclays Capital; Richard F. Valera, Managing Director and Senior Equity Analyst, Needham & Company; Tom Watts, Managing Director, Telecom and Satellite Analyst, Cowen and Company (see photo at left).
The consensus was the effect on the satellite industry of the recent meltdown in Wall Street will be long-term and it will take 5-10 years for the industry to recover, according to some analysts in the panel.
On an optimistic note, many speakers affirmed that the fundamentals of the satellite industry are sound and there are enough new opportunities in the market to help weather this downturn.
