Looking Ahead
Clearly, there are areas of opportunity in the satellite industry and not just in the United States. Take private networks via satellite; according to Slekys, the potential client base is "global. Whether it is in Kiev, Sao Paolo or Miami, every business, every government agency, and indeed everybody wants broadband," he says. "And nobody wants anything less than the most features and best quality at the lowest cost, even though they can't always afford it."
This said, "uses/applications vary according to local economies," cautions Corda. "In the U.S., local buying power has created an exciting opportunity for SOHOs [small office/home office], educational and rural customers to leverage private network technologies previously only available to corporate customers. In the developing world, most private network applications are still implemented in support of mission critical remote operations for government and enterprise clients (that is offshore oil rigs, mining operations, and embassies) all still rely on satellite for their private networking needs."
The moral of this particular tale is not just that opportunities exist, but that they are often specific to regional markets. Satellite operators looking for such opportunities need to be aware that "one size does not fit all;" the same is true for their investors.
Meanwhile, the explosive growth of satellite radio proves that consumers will take to satellite when the applications are right, as has already been proved by DBS. Both services, however, are successes because consumers want what they offer, not because they are delivered by satellite. This is a lesson many satellite operators have missed in the past, namely that consumers only care about getting what they want, not how it happens to be delivered.
As for the military commercial satellite market? As long as commercial satellite operators can provide military users with secure, reliable coverage for less than it would cost the military to launch their own satellites, this sector should continue to thrive. This said, anchoring a commercial operator's success primarily to military customers does have its risks, not least of which is the outbreak of peace throughout the world and a resultant lessening of military traffic.
The bottom line: the fact that 1Q 2005's numbers were not as robust as one hoped does not make the satellite industry a failure, nor a bad investment. What remains to be seen is whether private investors will take the industry's unique market conditions into account because, after all, this is rocket science.
James Careless is senior contributing writer to Via Satellite magazine.
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