[Satellite News 08-25-11] Satellite manufacturer Space Systems/Loral (SS/L) rallied back from a slowdown in satellite orders earlier this year, winning contract orders from Telenor Satellite Broadcasting (TSB) and Singtel Optus. SS/L President John Celli shared his predictions with Satellite News on whether the market for new satellites has reached its natural peak or has positioned itself for increased growth during the next decade.

 

Celli: There is no question that the first half of 2011 was actually slower than we expected. I think this was the case for the entire industry, even though we won satellite awards. We actually see a strong pipeline of satellites coming up for the remaining part of the year. One of the reasons for this is that we provide satellites for different services, including TV, radio, broadband and data transmission. I see an explosion of digital content related to transmission, particularly in Asia, where you have the rise of social networking and you have new broadcast technologies such as HD and 3-D coming online.

 

Celli: The distribution of all these services continues to grow, but the supporting ground infrastructure has to be adequate for geographic expansion. The satellite system also has to be up to par. If you think of all the hundreds of millions of people around the world who do not have access to broadband services, you will see that there will be a considerable increase in demand for these services. There is a projection that there will be increases of satellite TV subscribers of up to 250 million people in the next 10 years. There could be a real explosion in demand coming from broadband, broadcasting and government satellite service on commercial spacecraft.

 

Celli: We have seen demand growing steadily not only for fully dedicated satellites that provide 100 GB a second, but for others that add Ka-band transponders to a normal Ku-band application. You have the recent Thor 7 and Anik G1 satellites, which have a great deal of flexibility. The demand is there and I think the industry, even this year, is going to be showing good demand by the end of the year.

 

Celli: 10 years ago, we saw an absolute drainage of capital expenditure. I do not see that happening again, at least during the next 12 months. Capital expenditure has always been characterized by cycles. There are peaks and then little valleys. There are many fleet operators with high revenues and plans to replace their satellites and expand the capacity of those satellites for new markets. Even the major FSS operators that have spent a lot of money recently are still planning to continue this trend because they want to protect the services they are providing to their current customers. You have seen a lot of satellite service providers looking eagerly at Latin America and Africa as areas of great demand.

 

Celli: We have provided several hosted payloads during the last few years. It is not a completely new thing. There are a lot of things that can be done with satellites if you need a payload for a particular mission. The U.S. government and the European Union are looking at this as an opportunity. There are no technical issues with hosted payloads and we have a very flexible and powerful satellite platform that can help hosted payload users. You have to find the right government policy that will allow commercial operators to efficiently and consistently provide services to customers. Everybody I know in the U.S. government knows this, and they are looking to find ways to do it in an efficient manner. There has been progress in this arena.

 

Celli: While we don’t have much government business, this is actually a perfect opportunity for a commercial company like ours to provide best value opportunities to the U.S. government and other institutional organizations around the world. The U.S. government has limited funding, but its needs are still there. We hear a lot about the U.S. government moving into the commercial model of acquisition processes. There is a lot of work being done to move the acquisition process in that direction, as this is not an easy thing to do. Governments also need to not only use commercial acquisition processes, but also leverage commercial products. This is how you can get economies of scale and lower prices. I hope that will happen early next year.