VIA SATELLITE: How do see consumer broadband playing out in Europe?
Williams: There seems to be a consensus from satellite operators, the European Union, British and other governments that there is somewhere between 20 million and 30 million homes in Europe that will need satellite broadband. Ku-band can’t compete with Ka-band. At the moment, there are three Ka-band satellites over Europe, two for Avanti and one for Eutelsat. They can only supply a peak of two million subscribers so the demand for capacity is huge, therefore, I don’t think you will see significant price competition in the market. We are seeing satellites being put up in an orderly way, and more satellites being procured to serve the rest of the demand.
VIA SATELLITE: What did you make of Inmarsat’s Global Xpress announcement? Will they compete in any way with Avanti?
Williams: I don’t think so. They have a fantastic franchise in terms of their maritime and aeronautical services that I would regard as impregnable. I would never look to compete with them there. I think they have that market absolutely locked-up. They also have an absolutely first rate management team. When they announced Global Xpress, I was pleased, because it was a validation of the technology by another leading and sophisticated operator. But they made it clear that their focus is providing higher speed services that their previous frequencies cannot accommodate to their existing customer base. I don’t see much overlap in terms of what our two companies will do.
VIA SATELLITE: What are your views on in-orbit satellite servicing?
Williams: I remember in the 1990s when I was a banker and seeing people bring recovery style business plans. It is fun to see the progress being made here. I don’t really know much about the technology involved in the project. We have not sought out information on it. If there is a project there that works, then it could extend the usable life of satellites for us. This would result in reduced capital expenditure in the future, which would help all of us in terms of discounted cash flows. I would say that I am reasonably happy that some progress is being made with that, but I hope progress is real world rather than paper-based.
VIA SATELLITE: What is the long-term vision for Avanti now?
Williams: I really have to take my shareholders with me on this vision. As a public markets company, we have a lot of shareholders who don’t have significant prior exposure to satellite companies. Therefore, we need to do the job of communicating the notion that the satellite business can build very significantly to multiple orders of magnitude and have value creation during a long period of years. This is not a business that just becomes an overnight success. Yes, we have one satellite in the sky, and one launching soon, but we have been going at this for 10 years now. I would say in the next 10 years, there is a very good chance that Avanti could deploy at least half a dozen additional satellites. If we do that successfully, there is no reason why Avanti cannot become one of the most significant public companies in London.
We hope public shareholders will have a good experience with Avanti in the next few years and we are very blessed that in our top 10-20 shareholders, there are fantastic institutions that are in this for the long-term and that have a 10-15 year view. We have the protection of some long-term shareholders; we have spectrum resources that can sustain large plans; we have a youthful management team; and we have a workforce that I think has the energy to continue at the current frenetic pace for another 10 years or so. I have just turned 42, so I think I have another 10 years working at the same pace I am doing at the moment. I think in that timeframe, we can produce a satellite operator that has truly a global scale, and will create vast value for our shareholders.
VIA SATELLITE: Is there a chance that Avanti will be acquired before this 10-year vision bears fruit?
Williams: We have great orbital positions that allow us cover Europe, the Middle East, Africa and the Americas. We have the support from our shareholders to continue with the vision of deploying satellites into those regions. So we are absolutely focused on a business plan in the next 10 years that will use efficient non-dilutive debt capital to finance more satellites, fill them up at good prices and then start producing dividends. That is what we are focused on. The market will do what it will on the back of our success.