Hispasat Moves Away From European Base

Hispasat believes the Latin American market will offer rich pickings over the next few years. In fact, the Spanish-based satellite operator sees its main challenge as developing multimedia and broadband applications for the Latin American market.

Jose Ignacio Gonzalez-Nunez, deputy CEO at Hispasat, told Interspace: “In 2004, we will have more capacity in terms of numbers of transponders over the Americas than over here. We are going to move the centre of gravity of the company in between the two continents. The other reason why we are launching the transponders is that the television market has a low growth rate at the moment.”

Nunez calls Hispasat’s Latin American operations “daily work” for the operator and “an anchor” in terms of global development. The operator broadcasts signals to more than 11 million homes in the Iberian Peninsula and Latin America. It is received in 61 percent of the homes with cable television in Latin America, and 40 percent of homes in central America. The operator already has strong market share in places such Argentina, Brazil, Chile, Colombia, Mexico and Venezuela.

Its European operations in Spain and Portugal are still healthy, but it is clear that Latin America is where the operator sees its future. Nunez adds: “Hispasat has been learning about the market and finding out about the business opportunities in the Spanish and Portuguese speaking markets. What we have done over the last year is to formulate our strategic planning in terms of profit development and acknowledging this growing market in the Americas. For us, this is the very first step in our vision to become one of the leaders in this market. For the time being, we are not planning to go to other markets.”

In 2001, Hispasat broke through the 100 million euro ($87.4 million) barrier in revenues for the first time, reaching 107 million euros ($93.5 million), a 23 percent increase from the 2000. Nunez told Interspace that Hispasat “would be happy with 10 percent growth” in 2002. So, Hispasat will be looking for around 120 million euros ($104.9 million) in revenues in 2002. It had profits before tax of 29 million euros ($25.3 million) in 2001.

The operator is also planning to launch the Hispasat 1D in the summer of this year in the 30 degrees West orbital slot. This will provide a further 28 new Ku-band transponders with American and transatlantic connectivity. It is also planning to launch a Latin American satellite, Amazonas, in 2003 in the new 61 degrees West orbital slot. It will provide capacity for 63 Ku-band and C-band transponders. Hispasat recently signed a deal with Astrium to build the Amazonas satellite.

This hectic round of activity is likely to affect the balance sheet. Nunez says: “We think our profitability and EBITDA margins will be at a very good level, always over the 80 percent level. Last year, they were running at around 83 percent EBITDA margin. Because we are launching the satellite this year, we won’t see the real benefit this year. However, in two years, we expect to see 20 percent growth in overall revenues.”

–Mark Holmes