Executive Q&A: ManSat CEO: Role Of Business Service Companies Growing In Industry

With the recent consolidation of some of the largest players in the Fixed Satellite Services sector, spectrum allocation shifts favoring terrestrial buildouts in the mobile services arena; and with the ever-growing importance of hardware and launch insurance, companies such as ManSat LLC are playing an increasingly pivotal role in shaping the global satellite communications landscape.

ManSat represents a partnership of aerospace, banking, property and international legal interests that have joined together to offer turnkey business services to the global commercial space marketplace. The company provides filings to the International Telecommunication Union (ITU) for orbital slots and associated radio frequencies via the Isle of Man as a filing jurisdiction. ManSat also provides legal, financial and insurance services, enabling fledgling and established satellite service providers a consolidated portal for their business.

The privately held company is headquartered in the Isle of Man, with regional offices in Houston and London and representation in Geneva.

Christopher Stott, president and CEO of ManSat LLC, recently spoke with Satellite Today Editor Nick Mitsis and shared his insights regarding the service areas that are emerging and how ManSat is diminishing the mystique of orbital filings, financing, international regulations and insurance while continuing to foster a significant part of today’s business success.

Satellite News: With many of the prime orbital locations accounted for, will the industry see a decrease in the importance surrounding orbital filings?

Stott: Quite the contrary, orbital filings continue to be the lifeblood of any satellite operator. Yes, many of the prime slots are taken, the ‘beachfront’ property, so to speak, but technology is changing this. More complex payloads are being launched or currently are under construction, ready to offer more bandwidth, spotbeam connectivity and faster data rates. All this is impacting orbital locations.

For example, high-definition broadcasting will require more bandwidth, increasing the number of in-orbit satellites, and with the advent of Ka-band and other frequencies entering the market, the spacing between satellites is slightly shrinking. Such developments will maintain the value of orbital filings and, thusly, the orbital slot debates at the ITU.

Your orbital filings are your satellite system; without them there is no business.

Satellite News: What is your perception of the emergence of ancillary terrestrial services (ATC) within the Mobile Satellite Services sector?

Stott: Today it is more about turnkey and merging communication technologies than single transmission nodes. What we are witnessing is a sector that is incorporating terrestrial cable and becoming more of a service convergence provider — the "Pelton Merge."

As we know, customers are more interested in transmitting their data and not so much with how that transmission takes place. Developments such as ATC are interesting because the mobile players are strategically filling in the gaps and not merely thinking satellite in order to do it. The satellite technology becomes part or a larger enabling data infrastructure.

Satellite News: Are you seeing convergence being a long-term business element rather than a short-term one?

Stott: Yes. Take a look at what is happening with smaller satellite operators and service providers — satellite radio in Europe, for example, and the established players of XM and Sirius in the United States. ICO coming back and using a blend of terrestrial and space-based technologies; even Inmarsat is finding ways to make a more creative use of new bundling services.

On another note, I think such convergence can have a significant play in the WiMAX arena. Be it for Internet Caf�s or urban build outs, a terrestrially-established WiMAX system connected to a traditional VSAT network can significantly extend its reach beyond the populated to the remote, and almost instantly, service providers can have a VoIP network set up that can rival any stand-alone terrestrial system.

This convergence, if strategically incorporated, will have some significant market developments for communication services.

Satellite News: What services stand to gain the most from using a network with a terrestrial/satellite mix?

Stott: Disaster recovery. Convergent technology offerings can materialize some tremendous services for first responders and national governments. But such use is not entirely brand new. The British foreign services have been using a satellite/terrestrial system for years.

From the first minutes of a disaster to long-term connectivity, satellite can be a part of the solution and many organizations are coming to a more significant realization of that. Post 9-11 and Hurricanes Ivan and Katrina, those in charge are not taking communication for granted anymore. Many banks in the Caribbean, for example, did not have satellite as part of their communications infrastructure or even their disaster recovery planning and lost transaction ability last hurricane season.

It is unfortunate that it takes a disaster to change old perceptions, but in this case, that is what has brought us to the present state of affairs. But much more still needs to be done in incorporating satellite on the front end as a preventative measure as opposed to a reactive measure after the fact.

Satellite News: Is there a significant business case for Africa, Asia and Latin America regarding satellite services?

Stott: Absolutely. Operators should not shy away from the developing world, and investors and business developers can work together. If the developing world is to develop, we have to keep serving those regions.

One good outcome for working within the developing regions is the opportunity to introduce services with the latest technologies that can have a quicker, stronger and more long-term financial return.

Satellite News: Who should bare the insurance burden in the satellite industry?

Stott: We are seeing many of the satellite operators heading towards the use of captive or self-insurance. This makes a lot of sense, especially with their in-orbit assets and growing fleets.

We would love to see manufacturers and launch service providers do self-insurance as well. It is a logical extension of their sales offering, especially if they can provide the same coverage, given capacity discounting via a captive, at a better price than the operator can buy for themselves.

Satellite News: On the financing front, has the level of sophistication been increased by the entrance of private equity into the industry landscape?

Stott: The satellite financing industry was always sophisticated and cutting edge, but without a doubt the entry of the private equity players into the market has raised the level of the game.

I believe these events have had a positive affect. I know many might disagree.

Satellite News: How does today’s satellite service provider manage risk?

Stott: Very carefully. Just because a service is established, it is not a given that it will work forever. You have to monitor the advancement of technology and the customer growth and make sure you are in sync with those developments. The market can offer various tools to manage risk effectively matching all appetites. We’re here to help too.