Faced with a steady decline in the price of their basic commodity, satellite operators have turned to vertical integration to drive efficiency savings and capture more of the value chain, speakers said at SATELLITE 2021.
Ramesh Ramaswamy, EVP and GM of Hughes Network Systems’ International Division, said: “We’re all growing revenues and we’re making money. The challenge we all face is to weather the price reduction on the individual components of the ecosystem, but then mitigate that by providing more innovative services and adding more value.” His formula: “You take the individual components, which are commoditized, but when you stick them together, you make sure that one plus one is three.”
Explore the Show Daily 2021 Day 4 Issue
Check out more from this issue and find your next story to read.
Amit Somani, chief strategy officer for UAE-based Yahsat, argued that business model innovation trumps technological innovation. “To differentiate on the technology would be quite challenging. We have good satellites, but others are there with a similar kind of infrastructure.” Instead: “Partnering, thinking about going downstream, thinking about hybrid models to do business. Product and business model is where we will do more innovation.”
Bill O’Hara of Intelsat gently disagreed, noting the company has thrived without vertical integration in media services, leveraging the strength of its European neighborhood infrastructure.
Elias Zaccack of SES said video represents about 60 percent of revenue but is a mature market: “The growth is coming from the network side. The data part of the business — whether it’s government, cruise, aero, or cellular backhaul — is what’s driving our growth at SES.” New technologies like dynamic resource allocation and software-defined satellites will help operators “enable our immediate customers to capture value in ways that they hadn’t been in the past,” O’Hara added. VS
