Satellite Execs Discuss US Military and Government Markets

military sequestration CEO

US capitol building. Photo: Rob Crawley

[Via Satellite 11-22-13] One of the major talking points in 2014 is likely to be the U.S. government as well as the overall military market – two key points for satellite companies. With the impact of sequestration still being felt, satellite companies will hope things start to improve in 2014. Mary Cotton, CEO, iDirect is confident that these markets will start to pick-up.

“I see demand for VSAT in the military and government growing stronger. Sure, comms on the move investments will continue to grow, especially for aeronautical applications, but that’s only part of the picture. Satellite is becoming more and more essential to enabling everything from troop welfare and safety to mission coordination. In fact, we’ll see the potential for new investments in satellite as a direct result of troop drawdowns. With the numbers within troops shrinking, militaries are shifting to an emphasis on more agile, sophisticated troops armed with the resources and technology to succeed. We do not see this trend letting up, even though we may experience temporary budget constraints in the United States or elsewhere,” Cotton said.

Intelsat General is another company also hoping to see a spike of activity, however, Kay Sears, president, Intelsat General, says the HoPS RFP, the Pathfinder RFI, and the recent CHIRP award are all strong indicators that the U.S. government has confidence in the ability of commercial operators to provide reliable, cost effective, state-of-the art communications solutions to the government.

“I am optimistic that companies like Intelsat General can deliver the cost savings the DoD needs to weather sequestration and emerge with a more flexible and resilient space architecture that leverages commercial capabilities and investments and allows the DoD to focus on the truly unique assets it needs to build. I’m also optimistic that we have a strong group of leaders within the Pentagon and Air Force who believe in changing the status quo when it comes to space programs and acquisition approaches and they are working with us on policy reform and Congressional language,” Sears said.

For a company like Globalstar, the military and government piece of the business represents only about 5 percent of its overall business. However, chairman and CEO, Jay Monroe is confident that there are some good opportunities for the company.

“We will grow, even in the face of larger companies having that much larger services revenues from them diminishing. I also think in 2014-2015, these could be the years where government hosted payload programs come to fruition. They haven’t really yet in the classic sense, but perhaps we are getting to the point where they will be reasonable contributors to future discussion,” Monroe said. “In the U.S. government business, it takes a long time to hand over responsibilities to companies for things you used to do yourself. However, this is likely to be driven by the lack of financial ability to do the things they used too. That lack of financial ability is more and more challenging. It is logical that the hosted payload part of the government business will grow over the next two years.”

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