[Satellite TODAY 06-06-13] Telespazio Brasil is one of the main satellite players in Brazil looking to take advantage of the many opportunities in the market. Marzio Laurenti, the company’s CEO says he expects the Telespazio Brasil’s growth to come from three specific market segments: oil and gas, backhaul, and corporate networks, but places particular emphasis in oil and gas as a major growth driver for the company.
“In Brazil, we have the Pre Salt Reserves. There is a tremendous growth going on here. There are many tanks, ships, platforms working in the area of oil exploration. That is the area where we are focusing. This is where we expect to get the highest growth for Telespazio Brasil,” Laurenti says.
However, the backhaul and corporate markets also offer potentially rich pickings for the company. “Backhaul in the last years’ was driven by the Anatel regulations. Now, I think backhaul will be driven by an explosion in demand in different areas of Brazil, where there will be more cellular demand. While GDP growth, was slightly less than anticipated last year, we expect to still see economic growth over the next three to four years. SMEs will continue to expand, and this will increase the demand for satellite services. The corporate network segment is related to economic growth. We believe that Brazil will keep growing,” Laurenti adds.
With companies looking to expand their presence in Brazil, satellite is a natural fit, but one thing that the Brazilian market definitely needs for this is more capacity.
“Satellite is the easiest way to connect to new offices. The capacity shortage can impact our planning. It is difficult to buy more capacity that you need. The way to overcome this problem is to be able to anticipate the problem. We have been able to plan ahead. So, we feel like we have sufficient bandwidth. But, we hope the cycle changes,” Laurenti says. “Today, in Brazil, the fill rates for capacity is higher than 90 percent. The situation today, is that for sure there is a shortage of Ku-band capacity. This is a fact; I think the shortage of Ku-band capacity is expected to last for the next two years. In terms of C-band, there is not a large availability of C-band, but I think the difficult situation is more in Ku-band. There is a little Ku-band available today in the market. Access to Ku-band is important for the services we want to provide.”
However, despite the potential shortage of capacity, Laurenti believes the Brazilian national regulator has done an effective job in monitoring the satellite market in Brazil. “The progress Brazil has made in the telecoms market is unbelievable. If you look at satellite, I don’t see Anatel is creating any obstacles for this market. There are rules to create competition. The only issue that I see is in regards to import duties. They are very high. Tax on services is also extremely high. So, these are limiting satellite services, but this is not an Anatel responsibility. The regulatory situation is not at all a limiting factor. Recently, Anatel approved regulation for Ka-band. The full process took almost two years, because the process is quite complex. There are not obstacles for doing business here,” he says.
While the company is focused on Brazil – the largest market in the region for satellite services – there are growth prospects for satellite all across the region. “I think there are other countries in the region where we expect satellite services to grow. I am talking about Peru and Colombia. These two countries are quite interesting for satellite,” Laurenti says. “I believe the whole region is very promising for satellite. I still think there will be more growth in Brazil, but I see opportunities in other countries also.”
Laurenti says the last two years have been “quite successful” for the company, both in terms of revenue and profits. However, 2013 is shaping up to be tougher.
“This year will be a difficult year, not because the market is not there, but because of the competition in the market. There is tough competition. But, we believe this year we should be able to enjoy some growth in revenues. We hope to maintain the similar levels of profitability we had last year,” he says.
