Antebi Outlines Opportunities for Gilat

Erez Antebi has been CEO of Gilat Satellite Networks for about two years. It has been a challenging time for the company as it looks to play a key role in commercial and broadband markets around the world. Here, Antebi talks about how Gilat is hoping to grow the business in 2014.

VIA SATELLITE: How do you expect to grow the business in 2014 compared to 2013? What do you see as the big growth drivers for the business this year?

Antebi: I expect 2014 will be better than 2013, though we succeeded to add many new names to our installed base last year. We are seeing growth in two main areas: first, broadband Internet over satellite, either in under-served or unserved areas. We’re delivering broadband over satellite to places where no DSL is available, or is simply insufficient. I don’t think I am saying anything new here. The second area where we are starting to see more and more traction, although to a somewhat lesser extent, is broadband on the move. We’re seeing a real need for these solutions, both in defense applications as well as in commercial applications, such as vehicles, airlines and trains.

VIA SATELLITE: Gilat is obviously present in a number of emerging markets such as Latin America and Asia. Which of these represents the biggest growth opportunity for the company?

Antebi: If I had to pick emerging markets today, I would pick Asia and Africa. We are very strong in Latin America, and I think we will continue to see strong business there. But, since we are so strong there, it is going to be hard to grow very fast in that region. We’re seeing more and more opportunities come up in Asia and also I expect to see more growth in Africa.

VIA SATELLITE: How will the move to High Throughput Satellites (HTS) impact the company? What business could you gain on the back of this?

Antebi: In general, HTS is bringing about big changes to the industry, for two good reasons: HTS dramatically reduces satellite transmission costs, to probably 10-15 percent of conventional satellite transmission costs. It’s bringing a whole lot more capacity into the sky than what traditional satellites offer.

Additionally, traditional satellites optimize video applications, whereas HTS optimize Internet and point-to-point applications. Finally, because of the way satellites are built, HTS is changing the ecosystem. With more capacity in the sky at lower transmission prices, there’s going to be great demand for ground segment equipment, which is our expertise. This need will pull in business for Gilat.

In the past, satellites, service providers and technology providers were all separate. The service provider would decide which satellite to use, and what they would charge for their service. Now, the satellite and the ground segment are linked. For example, SES provides the satellite, we provide the ground segment, and together we approach ISPs for distribution. We’re doing something similar with Ipstar. So, I think the ecosystem is moving in that direction.

VIA SATELLITE: Looking at your most recent results, you showed a fall in profits and revenues. How will you arrest this decline?

Antebi: Yes, 2013 was challenging, but that said, as I mentioned previously, we succeeded to add many new names to our installed base. I think it had a lot to do with the U.S. Department of Defense. We also had to contend with a couple of deals in Latin America, which got pushed out. We still won them, but the finances got pushed back. I think that these situations will not repeat themselves in 2014. We expect to see much healthier business coming from the defense arena and broadband mobility segment. In addition, we have taken some significant steps to reduce our cost base, which will enable us to return to acceptable profitability levels.

VIA SATELLITE: Finally, how will Gilat play on this new satellite landscape?

Antebi: We have developed and are executing on a multi-year plan. Over the next 12 months, we want to achieve a lot more growth in broadband satellite and communications-on-the-move. We will continue to adjust our plan as needed to explore new areas and I am confident that we will move into additional growth areas. We have some ideas in the pipeline, but we’re not ready to discuss them yet.