Axesat President Unsure About HTS Impact in LatAm
Axesat is a key player in the Latin American VSAT market. It has more than 6,000 sites and a growing customer base. Axesat recently signed a contract with Canadian FSS operator Telesat for capacity on its new Anik G1 satellite. Axesat’s President Mauricio Segovia talks about the company’s growth potential, its recent deal with Telesat, as well as the possibilities for High Throughput Satellites (HTS) in the region.
VIA SATELLITE: Could you explain the significance of the recent deal with Telesat? What are the company’s demands now for satellite capacity?
Segovia: The Telesat deal was driven by them. They needed the capacity on the T14R satellite for another client. With the capacity limitations on that satellite, they asked us if we would be willing to move to another satellite, with their investment support in terms of us having to make changes and do the migration. We followed their lead since we also thought this was beneficial to us. The move enabled us to set up an infrastructure connected to a satellite that has growth potential. The capacity we had on the existing satellite was really the only capacity we would have available. The process of doing the migration from one satellite to another gives us the flexibility reconfigure the use of our capacity. I think it was a win/win type of deal. They got what they wanted and we were able to better use all of our capacity and be connected to a satellite that has growth capacity in the future.
VIA SATELLITE: How do you view the demand for VSAT services in Latin America? What trends are you seeing in the market?
Segovia: The demand is still there in all of Latin America for VSATs. I would say the volumes may be coming down but that the requirements are increasing. The growth is coming first from the more robust requirements of customers, then by the number of sites being installed. I think in the high-end part of the market, there is still a lot of opportunity to grow the business even if the volumes are not what they were four or five years ago.
VIA SATELLITE: What do you see as the ‘hot’ country markets for VSAT services in the region? Where are you seeing the most growth?
Segovia: In all the countries we operate in, we are seeing some kind of growth. The country we are seeing less growth in is Colombia, but there is still growth there. We have been here for 10 years. So, we have an important presence in this market. So, it is difficult to increase that presence. We have a large installed base there. In the other countries, we are happy with the growth opportunities that we have and believe those countries will have other growth opportunities. We still have a lot of work to do. I would not highlight one particular country which has more growth opportunities than any other.
VIA SATELLITE: What role do you see High Throughput Satellites (HTS) playing in Latin America?
Segovia: The evolution to HTS was more seamless in the United States. I think in the rest of the world, there is more confusion. HTS will definitely play a role, but it is not clear what type of role they will play. We are seeing some other initiatives such as Ka-Sat (Eutelsat) which is not doing nearly as well as expected. The industry is looking at this experience and wondering where it goes next. They are trying to set up different types of models to use that capacity. I think the verdict is still out on what impact HTS will have in other regions of the world. Intelsat has a different view on what an HTS should be. So, the situation is evolving.
In Latin America, the only player that is really doing something with this is Media Networks Latin America (MNLA). We will see how things develop in the rest of world and look at how other Axesat-type players adapt. But, it is a confusing moment for the industry right now. I am not sure what role HTS will play in Latin America.
VIA SATELLITE: How do you view the satellite broadband opportunity in the region? How is the enterprise and corporate market developing in the region?
Segovia: I think it will be both residential and enterprise. However, I think HTS will have a tough time in the residential market because of the price point. If you want to charge $60 for a broadband connection, there are not a lot of people outside the big cities that can pay for this, particularly in countries like Colombia. Once you go into the big cities, where people can afford to pay, you are then competing with telcos, so it becomes that much harder. It will be hard to compete. I am not sure what the residential play will be. I think the price points will be too high outside of the cities. It will take a lot of work to get those high throughput beams filled up.
VIA SATELLITE: Are you expecting to see revenue and profit growth in 2013 compared to 2012? What do you see as the key drivers of your business in 2013?
Segovia: We are experiencing and expecting growth in 2013. We expect that trend to continue. We are growing across a range of markets in the region and we want to offer more and more robust solutions.