According to Andrea Maleter, technical director, Futron, “There is a fair amount of private equity money still going into (Latin America’s) satellite business. Latin American telecoms, in general, has seen a fair amount of consolidation. Telefonica, which has acquired so many companies around the region, has not had a problem gaining financing for things that they want to finance. But you have so many other operators moving in. For example, Brazilian telecommunications group Oi bought out rival Brasil Telecom in August this year, so there has been an evolution of telecom companies expanding. There has been a certain amount of consolidation of all telecom activities. So of the kinds of financing that will be available, they will be varied and the fact that you do have some close (financial) relationships with both European and U.S. companies from an operating perspective. Maleter believes there are other interesting markets to look at in the region. “I think the big financial issue in the region is all about Mexico, whether it’s a Satmex issue or its individual players and Telefonica’s role in the region,” she says.
Doron Elinav, vice president of marketing and business development of Gilat Satellite Networks, says, “The rate of exchange has affected all business. Basically, the lack of free credit and the slowdown in business has changed things. Financing is much more difficult. All contracts take much longer. Everybody wants to secure monies in advance, so everything is more difficult for everybody to do business. This has caused a slowdown and delays in projects.”
E-government, long-distance learning, DTH services, video distribution and wireless backhaul are driving demand. Revenue has gone up for two reasons. First, because more capacity has been leased and second, because pricing of the capacity of the tighter supply has pushed up pricing in the last three or four years.— French, NSR.
One example of where companies are seeing this impact is with Brazilian satellite operator Star One’s C1 satellite, Elinav says. “The delays in the launch of the Star One C1 satellite might cause immediate delays of government projects that were based on this satellite. So the effect has been, I won’t say minor, but has been much less compared to the effect of the financial crisis on the U.S. economy. It is a trend that many of the ISPs and many of the telco’s want to leave the capital expenditure model and want to go to the operating expenditure model. So they don’t pay a large amount day one when the network is set up, but they pay as they are using the network,” he says.
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