Eric Béranger, CEO, Astrium Services
EADS acquired independent global satellite-based mobility communication services provider Vizada this past August for 673 million euros ($934.32 million). The deal, which is still awaiting final regulatory approvals, will see Vizada become part of Astrium Services, one of the fastest growing operations in Astrium’s space business. Vizada brings a customer base that spans across sectors including maritime, aero, land, media, NGO (non-governmental organizations) and government/defense. Eric Béranger, CEO of Astrium Services, and one of the driving forces behind the agreement, talks about why the acquisition of Vizada makes strrategic sense.
VIA SATELLITE: How involved were you in EADS’s acquisition of Vizada? Why is it such a good fit for Astrium?
Béranger: At the end of the day, such a success is always one that comes down to the team. A lot of people worked on this deal, but, of course, personally, I have given a lot of my time and energy to make it happen. Vizada was one of the many targets that we had, and we identified it as such some time ago. So, I am extremely happy that we have been able do this.
I think from a business perspective, the deal makes a lot of sense because Astrium and Vizada are extremely complementary. It is a very sensible step forward for Astrium as well as for Vizada. As you know, we have been very active on various telecoms satellite programs with pretty large projects, and we have developed a lot of competence when dealing with these types of customers. Vizada is more commercial, and so combining the two means combining the two activities, which can cross-fertilize each other. In addition, Vizada has some business on the military side, mainly in the United States. The United States offers a clear path of development for Astrium Services. So, here again, the combination of the two can be extremely fruitful. In terms of geographic strength, Vizada has a presence worldwide, so it has a greater presence than Astrium Services. Vizada is also extremely strong in Norway, France and the United States. We are particularly strong in Europe, in places such as the United Kingdom, Germany and France, as well as the Middle East. We have also made progress in the United States. Combining the two companies enables us to better serve our customers and, in fact, more customers with a complementary portfolio of services. Vizada also has a global network, which will be perfect for what we already have.
VIA SATELLITE: What does Vizada bring to the table that you did not have before?
Béranger: The key thing that this deal brings is the ability to reach extra markets. Vizada is one of the largest independent satellite communications service providers in the world and can provide services to the most remote areas. They can provide services to professional customers, where as we have been more focused on the government side, so adding their portfolio of customers and global exposure is key. They are extremely strong in maritime and are the largest maritime satellite communications provider. They have a customer base of more than 200,000 users. They also have a strong presence in the aero market. So it brings us market reach, as well as state-of-the-art competences, in terms of satellite communications services in the commercial domain.
VIA SATELLITE: Has your presence in the United States increased? Are you developing stronger ties with the U.S. Department of Defense (DoD)?
Béranger: Astrium Services has continued to grow its presence in the United States both directly and indirectly. Thanks to Vizada, it will now have a strong presence with more than 120 people located in the United States already working with DoD customers. The U.S. DoD customer base is extremely vast and Vizada has some very good contacts at the Pentagon. We see this as an extremely good opportunity, both to strengthen what they are doing because we can enrich their portfolio and because we count on this stronger presence in the United States to grow our presence there with the U.S. DoD.
VIA SATELLITE: With Europe’s governments in the midst of tackling national debt issues, has Astrium seen an impact on its potential for future growth?
Béranger: Growing the business is getting more difficult on the government side and it may take more time. The needs are still there and one way or another they will have to be fulfilled. But we cannot predict what is going to happen in this segment, at what time, with a lot of accuracy. On the commercial side, and in particular the maritime side, what I can say is that during the recent crisis this sector has resisted very strongly. In fact, it has done more than just resist, it has continued to grow.
VIA SATELLITE: What levels of growth are you anticipating this year?
Béranger: I would not say growth in 2011 would be extraordinary. From a governmental budget point of view, 2011 has been a pretty difficult year, but we are in a business sector that is pretty resilient to economic crisis. You can see this through the performance of many operators. I am not expecting strong growth this year, but I am still expecting pretty good results.
VIA SATELLITE: Aside from the Vizada deal, what have been the highlights for the company in 2011?
Béranger: We have been expanding our infrastructure. We are building the fourth Skynet 5 satellite, which is due for launch in 2013. We now have a constellation of two radar satellites (TerraSAR-X and TanDEM-X), which allows us to create a unique, worldwide digital elevation model. We are building the successor satellites to the SPOT 5 satellite, so we will have SPOT 6 and SPOT 7. We are also expecting the launch of the first Pleiades satellite. So we are really at a time when we are growing and complementing our infrastructures. This is extremely important. This year we also started to offer welfare services to German troops, which means that we now provide these services to the United Kingdom, France and Germany. We also delivered the Yahsat 1A satellite earlier this year. We are providing operations and maintenance services to Yahsat for their network. In addition, we signed a contract with the European Space Agency (ESA) for EDRS (European Data Relay System), which is about enabling Low-Earth Orbit (LEO) Earth observation satellites to transfer data directly to geostationary satellites. Today, if you want to download the data from an Earth observation satellite, you need to wait until the satellite flies over a ground station, with EDRS data can be downloaded from LEO Earth Observation satellites in less than 20 minutes no matter where they are in orbit.
VIA SATELLITE: Christophe Debaert of the French MoD has spoken about key decisions being made regarding the Syracuse program in the next two years. Do you see this as a major contract for Astrium Services in this timeframe?
Béranger: This is a major prospect for us. We understand that currently the French MoD has to decide what it is going to do here. We are ready when this opportunity comes along to propose the best potential service to the French MoD. We think this is something very important to France, especially at a time when there are tight economic budgets. On our side, we want to make that happen.
VIA SATELLITE: What approach will Astrium Services take to the Ka-band market?
Béranger: Astrium Services is interested in Ka-band, but you have to make the differentiation between commercial and military Ka-band. Today, we are totally agnostic in terms of capacity bands. We are working with all of the operators across the world. We are providing services to our end-users with various solutions. For Ka-band, we see there are some commercial Ka-band projects that are being built up. As for Ku-, C- and L-band, we intend to use those commercial satellite operators to deliver the best potential services to our customers. Military Ka-band is another area where we are interested, but we need to decide how we will bring this to incumbent military customers. This is something we are following extremely closely.