Astrium Services CEO Eric Béranger Outlines 2011 Strategy
Astrium Services continues to serve as an important part of Astrium’s space business following its acquisition of ND SatCom its partnership agreements with Cisco and Telesat. The development of the company has resulted in a rapidly increasing growth rate, which Astrium Services CEO Eric Béranger hopers to sustain in the long-term.â€¨ Béranger spoke with Via Satellite about the key elements that will play a role in the company’s future-oriented business model.â€¨
Via Satellite: What opportunities and regions are you looking into this year?
Béranger: 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 as we are pretty active in that market. 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.
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. We added TanDem-X to our fleet of satellites, which means we can now deliver unprecedented 3-D data services to customers.
Via Satellite: Describe Astrium Services’ position going into 2011. Are you happy with the way the company performed in 2010?
Béranger: I think we did pretty well in 2010. We were pretty much in line with expectations, which I think is impressive considering the economic downturn and the issues facing customers, particularly institutional ones. There have been some difficult budget issues. I think the fact we have come out of it healthy is proof that we are bringing real value to our customers. â€¨ But, when I say we did pretty well in 2010, I am using British understatement. In terms of order intake, we did much better than we expected. We signed an extension of the Paradigm concession with the U.K. Military from 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. We also will add Skynet 5D to Astrium’s constellation when we launch it in the first quarter of 2013. Everything is on track.
Via Satellite: Can you give us specific numbers on your order intake?
Béranger: We saw a double-digit increase in order intake. For revenues and profits, we had some growth rates that were so huge in 2009 it would have been difficult to match them last year. Our expectations in 2010 were not as high as the growth rates that we saw in previous years.
Via Satellite: What was Astrium’s strategy behind the ND SatCom acquisition?
Béranger: The reasoning behind this deal was pretty simple for us. We have considerable satellite communication system competencies to deliver full turnkey satellite infrastructures and system engineering capabilities. While we are leading the market in modems for ground networks components and have been working in naval and airborne terminals, we have not developed much on the land ground segment. ND SatCom has this capability in land terminals and they will bring that to us. â€¨ We launched the second ComsatBw-2 satellite in 2010, which completes the Germany military satellites fleet. ND SatCom has been our subcontractor on this project, involved in the delivery of the ground segment. We see the ND SatCom deal as a way to expand beyond the U.K. and German markets. There are certain networks that are related to certain cultures. The German network is not the same as the French network or the British network. When we take over ND SatCom, it gives us more opportunities to fully address the German market in terms of military satellite communications. â€¨
Via Satellite: How do you see the military business looking in 2011 with defense budget and national debt issues motivating governments to cut spending?
Béranger: There is a short-term and a mid-term impact of spending cuts. The short-term impact is that some of the budgets allocated to operations in this area could be constrained. We could see some reduction in the usage of our military telecoms infrastructure. There is however, a counter argument to that. We think these circumstances will force military organizations to be more efficient in their spending and look for solutions that will provide better value for money, and these could give us some opportunities. â€¨ The France government launched an RFP called ‘Nectar’ which covers the outsourcing of Syracuse services. We consider Nectar an opportunity for us and we are bidding for this contract. It is one of our key objectives this year. While so many other things can happen in terms of potential importance, what I can say at this stage is that it is the most important contract we will be going for in 2011.
Via Satellite: When will the Nectar contract be awarded?
Béranger: It is very difficult to know when this will be announced. We are preparing the bid. The French military will have to follow their own processes when they analyze the bids. My understanding is they would like to announce the winning bidder this year.â€¨