CEOs See Long-Term Growth Across Various Sectors

Satellite executive leaders from a wide range of sectors gathered for the Satellite Finance Forum 2011 CEO roundtable to discuss common challenges faced throughout the industry and what to expect in the coming months.
    Futron Technical Director Andrea Maléter opened the forum by asking panel members about how financing was achieved this year compared with last year. Asia Broadcast Satellite (ABS) CEO Thomas Choi said the only realistic source of funding that was available two years ago for regional operators was ECA financing from organizations like Coface and the U.S. Export-Import Bank.
    “We embarked on getting approvals with the U.S. Ex-Im Bank and Coface to support our new satellite, ABS-2. Fortunately for us, the financial markets calmed down over the last 24 months, and we had done very well in the first three years of our operations,” said Choi. “Those ECA financing sources, however, were willing to work with operators when the markets were in worse shape two years ago, but things pretty much stabilized in the fourth quarter in 2009. U.S. Ex-Im credit is cheap but comes with a lot of restrictions on what you can do.”
    Choi said that the operator will be concluding a significant new financing agreement in the next few weeks. “This will allow us to complete the new satellite and give us addition money for more acquisitions and projects,” he said.
    Hughes Chairman and CEO Pradman Kaul said the subscriber market also stabilized and has helped provide a solid foundation for operators during stagnant economic cycles. “Three years ago, we had just launched Spaceway 2 and we were focused on getting our consumer satellite business up and running. We were a go to achieve 400,000 subscriptions on Spaceway — all building on very stable, local enterprises. Those solid numbers have enabled us to expand internationally, and in the last 12 months we’ve had more success in emerging markets. Going global is something that we’re looking forward to, as Jupiter is on schedule with construction and our acquisition by EchoStar is complete.”
    SES World Skies President and CEO Robert Bednarek also plans to build on the company’s business growth through the economic recovery. The operator recently commissioned the SES 8 satellite to bring more capacity to DTH markets in Asia as part of its plan to expand its presence in emerging markets in Latin America and Africa. The company also remains dedicated to developed markets in North America, where achieving consistent and sustainable growth is much more difficult.
    “We have an ambitious launch schedule in 2011, which will give us the capability in 2012 to address what seems to be an insatiable demand for capacity in emerging markets in Latin America, Africa, India and Southeast Asia. There is demand popping up in various geographic pockets for various applications. This diversity is very encouraging. Some applications are Internet-related and some are mobile-related. There are also numerous DTH platforms starting to show up in the emerging markets,” he said.
    Astrium Services CEO Eric Beranger said future satellite success depends on companies leveraging a variety of new markets and offerings. “I think the industry performed well in 2010 considering the economic downturn and the issues facing customers, particularly institutional ones. There have been some difficult budget issues. I think the fact that Astrium has come out of it healthy is proof of that,” he said.
    Astrium Services saw a strong year in orders, signing an extension of its Paradigm concession with the U.K. military for 2020 to 2022. “It was crucial for us to secure this new deal with the U.K. military at the beginning of 2010 when budget constraints were high,” he said.
    Beranger also discussed the new markets that Astrium Services plans to target following its success last year. “We will be offering more and more services into the business-to-business world in 2011. We also see Africa as a very exciting region, which is developing pretty quickly … There are a lot of VSAT services that are needed in Africa, as it is a huge continent with huge natural resources. You see more and more companies adding to their capabilities in this region, and they look to leverage that opportunity,” he said. “The geo-information market also has been very active, as seen by the Enhanced View contracts we signed in the United States and the fact that we are currently mapping the entire world to combine it with optical data. We are the only entity in the world that is able to do this. We also have been pretty active on developing our interests in Europe’s GMES, as well as with some of the REDD initiatives for carbon monitoring.”