David Pollack, President and CEO, Spacecom

Spacecom, an Israeli satellite operator, recently launched its Amos-5 satellite with more than 50 percent of its capacity already sold. Spacecom, which operates the Amos fleet of satellites, is targeting emerging markets such as Africa and Eastern Europe for its capacity and services. Spacecom president and CEO David Pollack talks about the operator’s vision of becoming a multi-regional satellite operator.

VIA SATELLITE: What do you see as the major growth drivers for Spacecom in 2012? How much capacity have you sold on Amos-5? Is this in line with expectations?

Pollack: Spacecom’s Amos-5 satellite began commercial operations in late January, so we very much expect to have it contribute to our growth in 2012. At launch, we had pre-sold more than 50 percent of the satellite’s capacity to a variety of telecom providers, government agencies, broadcasters, teleport service providers and other communications entities.

We are already seeing an uptick in requests for services following the launch and are currently closing more deals. We are looking forward to this continuing throughout the year and into the future. As with our satellite hotspot at 4 degrees West, where the fill rate is more than 90 percent, we are working towards a high fill rate on the Amos-5. Yes, our expectation is to make this happen and Amos-5 will be a prime carrier of communications services in the years to come for both broadcast and data.

VIA SATELLITE: Could you tell us about your capital expenditure plans for new satellites? What are your plans likely to be in the next two to three years?

Pollack: Spacecom’s vision of becoming an emerging multi-regional satellite operator is on its way to success. Following the successful commercial operations of Amos-5, we are currently planning the launch of Amos-4 in 2013 to the 65 degrees West prime orbital position to service more than 80 percent of Russia’s population and over the Indian sub-continent in Asia. Following this, we are scheduling the launch of Amos-6 in 2014 to provide more services over Europe and the Middle East, as well as expanding our services over Africa. The satellite will be substantially larger than Amos-2 and Amos-3 together and will include a new Ka spot beam technology for broadband services in Africa and the Central and Eastern European (CEE) region.

Whereas Amos-4 is well along its way in construction and testing, we are currently in the RFP process for Amos-6, which we expect to close and finalize within the next few months. We are looking at various options for financing the satellite including within Israel, abroad and with Export-Import banks. The package that we arrange will depend on the company we choose to design and build the satellite. We are very excited by our options and as a publicly traded company, we will make them public when we are able to do so.

We are also looking at further opportunities for cooperation in other markets and how to develop Spacecom’s business farther into the future. This includes seeking and securing new orbital locations that fit with our business strategy to provide high-quality, reliable satellite services to growing markets.

VIA SATELLITE: How do you view the African market for Spacecom?

Pollack: Africa is an exciting market for Spacecom for a number of reasons. Already in 2006, our board of directors decided that Africa’s communications market was evolving and growing, making strategic sense for the company to begin working on providing Amos coverage for the continent. Today, we believe that we have made the right decision. Africa, with a growing population, its ability to capture more infrastructure investments that has led to the modernization of communications platforms and its overall attractiveness for business, is a place that represents an important element of our business strategy. On a corporate level, Amos-5 enables us to reach our vision of becoming a multi-regional satellite operator.

Amos-5 also is one of the first satellites designed specifically to serve Africa, rather than be moved from one area to another. With a high elevation angle it offers an excellent reception for satellite dishes, especially relevant in urban areas where structures can cause interference with satellite signals. Its hotspots are strategically placed to ensure the widest coverage and have one hop from anywhere to everywhere else in Africa, parts of Europe and the Middle East. Thus, we provide three major benefits: a high-power satellite, with wider coverage, designed specifically for Africa.

We are currently pursuing deals not only for broadband needs but also for broadcast, data and other applications to a diverse group that includes both international — primarily European — and local African telecom providers, government agencies, broadcasters, NGOs, teleport service providers, cellular operators and other communications entities.

VIA SATELLITE: Did profits and revenues increase in 2011 compared with 2010? Are you expecting growth in 2012?

Pollack: We enjoyed 2011 as we moved forward with our plans for the 4 degrees West ‘hotspot,’ the successful launch of Amos-5, finalizing RFP plans for Amos-6 and the excitement in meeting our targets for Amos-4 as we move closer to our scheduled launch in 2013.

We reached $62 million in revenues during the first nine months of 2011, which represents expected annual revenues of $83 million compared with $77 million in 2010.

VIA SATELLITE: How do you view the Ka-band opportunity for Spacecom?

Pollack: Spacecom is very excited by Ka-band opportunities. With orbital slots for C- and Ku-band satellites mostly accounted for, we are looking for other growth opportunities to meet the growing demand for capacity in broadband services and utilize a lower cost structure to better compete. Such growth opportunities and lower costs are usually associated with Ka-band based High Throughput Satellites (HTS). Just look at what’s available today in the market with Ka-Sat over Europe and ViaSat-1 over North America (and soon with Jupiter over North America as well). Compared to Ka spot beams capacity less than a year ago, the trend is very clear — 2012 will be an important milestone in deploying large scale Ka-band based services to consumers, enterprises and other users.

We have been considering entering the Ka-band market for some time now. We started with Amos-3’s steerable beam which provides service today in Ka-band over various geographic locations. Amos-4 will also include such a steerable beam.

Amos-6 will be our first satellite implementing a large number of spot beams, covering Europe, the Middle East and Africa. We expect Amos-6 to support fixed broadband services, mobile broadband as well as maritime and other mobile services over some of the oceans, government services and other services in areas requiring high-capacity.

VIA SATELLITE: Are there any new market segments you will look to target in 2012?

Pollack: Spacecom’s growth plan is to continue to grow into emerging markets. With the entry of Amos-5 into service in early 2012, we are looking at what we believe will be an excellent year. In Africa, as compared to our ‘hotspot’ at the 4 degrees West orbital position, we will be working with more data operators, cellular providers, telecom and various communications operators. This is a change for us. We have developed a business plan and are executing it with an additional sales and business development team of 10 people who are well familiar with the various African markets.

In addition, we are currently working hard to develop our sales and marketing strategies for Amos-4, which will move us into new markets such as in Russia and the Indian sub-continent. I should also mention that Amos-6 will take us into new European territories with beams that reach through Western Europe as well as our traditional Eastern and Central European markets. We are also looking forward into the future as we move towards these markets.