Latin America: Far From Doomsday for the Region
The economic instability in Argentina should not be used as a barometer for the region. This was the message coming from leading speakers at the Latin America session at PBI Media’s Satellite 2002 conference held March 6-8 in Washington, D.C. Ed Martinez, vice president of Latin American operations at PanAmSat [SPOT], said: “We are proud to be part of the region. Latin America has a lot of initiatives that the rest of the world could follow. The area has tremendous potential. It will flourish with or without PanAmSat. It is not a doomsday scenario.”
Maria Velez de Berliner, principal at Syntheses Partners, said there are “major opportunities for satellite players in Latin America. Latin America has a serious educational deficit. Satellite applications will be vital for stability for governments and provide secure infrastructure for communications.”
Despite its undoubted potential, Latin America remains a volatile market. Brazil and Mexico are the most promising markets and are driving the economies in the region.
The region can put up some pretty impressive numbers. It has a population of over 500 million. Ruben Lecovitz, director of Latin America sales and marketing at Intelsat, said: “Strong growth is expected in developing markets. There is an accelerated demand for Internet and data services. Internet users in Latin America are expected to grow to 56 million by 2005. [Direct-to-home] subscribers are expected to more than double by 2005. PayTV subscribers are expected to more than double to 35 million in 2006.”
Issues such as economic instability and short-term pricing pressure are not big enough obstacles for operators to considering staying away. Spanish satellite operator Hispasat sees the region as its main market in the not too distant future. Juan Manuel Pinedo, executive vice president of sales at Mexico’s Satmex, said: “Demand [in the region] will grow to be over 1,000 transponders through the end of 2010. Premium satellites will continue to command the market. Demand growth will depend heavily on adoption of new technologies and applications. Satellite operators will continue to be niche players and gap fillers to other technologies in the region.”
Satellite services are seen as a key complement to terrestrial services in the region. Local know-how is also seen as very important. Daniel Salzer, general manager at Nahuelsat, emphasized this point. He said, “We are operating locally so therefore we have the advantage in terms of local knowhow. In terms of Argentina’s GDP, we are accustomed to dramatic changes. We will cope with this environment.” He also told the audience that recent problems in Argentina in terms of the volatile swings in the economy are not uncommon phenomenon.
The overall feeling is that broadband will be next big driver for growth in the region and will present satellite operators with enhanced revenue growth opportunities. “We have a very exciting challenge in Latin America. There are questions in terms of the speed in which we can recover our business plan. We expect to see major growth from broadband services,” noted Pinedo.