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Mexican Oil and Gas Reform Opens Up Satellite Opportunity for Jaba Satellite Engineering

By Caleb Henry | January 3, 2014
Javier Barrera, CEO of Jaba Satellite Engineering

Javier Barrera, CEO of Jaba Satellite Engineering. Photo: Jaba Satellite Engineering

[Via Satellite 1-3-2014] Changes to Mexico’s policies surrounding its oil and gas sector have opened up new opportunities for the satellite industry. Jaba Satellite Engineering, a fixed and mobile satellite solutions provider based in Mexico, has been following these developments closely. The company sells its satellite communications products to a diverse list of market verticals, but recent changes to laws surrounding foreign investment in energy have made this sector a targeted area for growth.

“We expect big growth next year because the congress already passed the law that allows Mexico to accept private investments in the energy industry, so the market is going to be able to exploit oil and gas and the whole energy industry overall,” Javier Barrera, chief executive officer of Jaba Satellite Engineering, told Via Satellite.

Mexico’s congress recently passed an energy reform measure that modifies articles 25 and 28 of the country’s constitution. Private companies are now allowed to receive contracts and licenses from the Mexican government to explore and drill for oil and gas. This is expected to trigger investments from the international community, and especially the United States, which is one of Mexico’s top export destinations for crude oil. Increased oil exploration is expected to carry with it a surge in demand for satellite telecommunication, which is already a major interest for companies like Jaba Satellite Engineering.

“We are exploiting Latin American opportunities in mining and construction, and also the energy industry,” said Barrera. “That’s a top market. It has everything to do with satellite communications for voice, data and video. We’ve grown about 35 percent of our client space portfolio. We’ve made a great improvement in the tracking business and telemetry, [and] everything that has to do with offshore and maritime terminals, and also with satellite phones and fixed terminals.”

This growth is not limited to the energy sector. While Jaba Satellite Engineering noted that energy is a primary market, pushing further south may open up sales in other areas like secure communications, which has been more difficult for the company to gain a foothold.

“You need to have a strong base in Mexico in order to reach even further south,” said Barrera. “Mexico is the strongest, but Brazil, Colombia and Peru are growing really fast. The Olympics and the World Cup are being hosted in Brazil and they are very interested in live streaming, video and everything that has to do with broadcasting.”

Jaba Satellite Engineering uses satellites from Inmarsat and Iridium, in addition to its own VSAT network called JabaSat. This experience working with multi-national companies may give Jaba Satellite Engineering an advantage over other Mexican satellite companies when it comes to international business.

“Aside from being a provider of services, we actually integrate technology,” Barrera added. “We work hand in hand with different providers and lots of manufacturers. We are able to give clients the solutions they need, and actually support that with many constellations. We’re not married to a provider, so if they need Inmarsat or Iridium or any other constellation, we can offer our clients whatever they need. We have global coverage by integrating that service.”

Anticipated domestic growth could help Jaba Satellite Engineering capture more opportunities in parts of South America. Barrera said that being positioned in Mexico gives the company a strategic advantage for entering Latin American markets.

“Basically, the stepping-stone into making business in Latin America would be Mexico,” explained Barrera. “Everything we do we translate into Spanish. They see Mexico as a base platform. [Customers are] looking to Mexico to see what we are doing, and that is how we get an idea of what they want. Mexico is the ideal location to make business in Latin America in regards to satellite communications.”