[Satellite News 09-22-11] Steve Collar took up his role as the new CEO of O3b Networks in March, replacing Mark Rigolle who had succeeded in securing a financial package worth around $1.2 billion to give O3b time and space to make good on its ambitious business plans.

   In the second of our two part interview, Collar talks about the company’s expectations to increase its backlog revenue figure, as well as what infrastructure developments are on the horizon. Collar also sets out expectations for the numbers of customers O3b hopes to have ahead of the launch of its first set of satellites.

 

Collar: We are at the top end of that range and we continue to sign and announce customers on a global basis. For us, it is both backlog and annualized revenue that are important. Backlog is pushing through $600 million while we are already above $100 million of annualized in service revenue.

 

Collar: We have sold about 30 to 40 percent of our capacity and we anticipate having sold between 70 and 80 percent by the time of service launch in Q2 2013. I would think that by the end of the next year we should be at or above $1 billion in backlog with the focus shifting towards the large telcos and incumbent operators.

 

Collar: It was pretty significant. The telcos and cellular operators perform a tremendous amount of diligence so securing a major operator such as Etisalat means that they fully validated the O3b system. It was an exhaustive process, which took more than a year to sign. As a result, we are now working with the customer on some specific solutions for Etisalat’s local operations. The global framework agreement was very much a necessary condition for us to be able to engage at a local level. I think we are the only satellite operator to have signed a global frame agreement with Etisalat and we are very proud of that fact.

 

Collar: It is very clearly a focus of O3b to be a core part of mobile network operators’ backbone, and to integrate within ISPs and major telcos’ networks. We know that this takes time so while we have a number of good discussions on-going, I wouldn’t want to comment on the specifics. The customers that you mention are very much the type of customer for whom we feel we have a compelling value proposition. They have very substantial deployments across the telco space and in diverse geographical regions – including fixed and mobile and with a clear evolution from 2G through 3G to 4G. O3b can offer these customers a sustainable competitive advantage and provide solutions that are complementary to their other deployed infrastructure.

 

Collar: At least one major anchor ‘tier one’ customer per region. In some regions that will be two or three but we need to make sure we can serve our customers’ growth requirements as well as their initial deployment. We will time our future launches to add capacity for existing customers and accommodate additional customers as we grow.

 

 

Collar: We have made great progress on the infrastructure side. We have just come through the Critical Design Review for our satellite network, which was a huge milestone. The engineering team has said that it was the most complete and thorough design review that they witnessed which is a great credit to the combined Thales, and O3b team and the way they are working. On the groundside, ViaSat are plowing ahead in the construction of our gateway teleports and it’s exciting to see these huge antennas being put together. Our first gateway installation is in Greece and the platform is being prepared as we speak.

   We also have great momentum in product development at the moment. Having announced ViaSat as the provider of our carrier class customer equipment, we are now finalizing the design and finishing the negotiation of our terminals aimed at the mobile backhaul market, with various short listed vendors. The antennas will range from 1.8 to 2.4 meters with several different amplifier sizes and modem capabilities to span the full range from an E1 (2 Mbps) up to an STM-1 (155 Mbps). We expect this to be a really significant part of O3b’s success in the future so picking the right partners here is important and we expect to be making announcements within a month.

 

Collar: There won’t necessarily be any additional infrastructure investments or announcements but there is certainly plenty of work involved in implementing our network. We will be building and integrating our Network Operations Center and our Spacecraft Operations Center where SES will be providing direct support, knowledge and experience. We will also be rolling out our gateways on a global basis, supplementing locations in Greece and Hawaii with five more in South America, Europe and Asia so we have exciting times ahead in getting ourselves ready for launch.  

 

Collar: The constellation can accommodate more than 100 satellites so there is no practical limitation in the short term! I would say if we look out 3-5 years, I am optimistic we could have between 16-20 satellites in orbit. It depends how we see the market develop and how quickly we can build the satellites, but it is not an unrealistic scenario for us.