After years of economic malaise, stalled business plans and a lackluster air enveloping the global commercial satellite industry environment, executives began to gain momentum as the economy strengthened, and business began churning again within the boardrooms.
One of the most important shifts toward positive business in 2003 came from the return of the financial market interest in satellite companies that previously had to struggle for investment funding. In fact, this was one of the major themes resonating throughout the halls of the new Washington Convention Center this past March at SATELLITE 2004. Peter Nesgos, partner at Milbank, Tweed, Hadley and McCloy LLP in New York, was quoted as saying, "In 2002, the total financing extended to the global satellite industry was $4.9 billion. One year later, this total more than doubled to $11.5 billion, with no signs of faltering in 2004."
J. Tracy Mehr, managing director of investment banking at CS First Boston echoed Nesgos, adding, "We've gone from one of the worst capital environments that anyone's ever seen to one that's fantastic."
This attention from the financial community materialized in some significant business ventures, including News Corp's courting of Hughes Electronics and its satellite service DirecTV from General Motors, which finally culminated in a $6.6 billion deal months back. But 2003 brought actual results along with courtship as seen in the acquisition of Inmarsat by a pair of private equity firms.
Now while stronger financial business was taking shape, the bankruptcy of satellite industry stalwart Loral Space and Communications and the sale of its valuable North American satellite assets to rival Intelsat Ltd. for $1.1 billion ranked as one of the biggest business ventures of late. Other important stories included Cablevision's launch of its Voom satellite TV business, aggressively entering the burgeoning North American HDTV marketplace. Finally, on the other side of the world, the war in Iraq spurred use of satellite capacity by the U.S. military and broadcasters worldwide. That increased demand, however, was insufficient to compensate for an overall sluggishness in demand for satellite capacity.
Once again, Via Satellite takes a closer look at the industry developments that shaped business endeavors in 2003. Allowing the numbers to tell the tale, the data research results, along with near-term projections, indicate the past year was indeed a period of time moving from the red back into the black. According to our numbers, by December 31, 2003, there were 261 Western-built, GEO commercial communication satellites in orbit and 49 more under various stages of construction.