Star One President Wants More Regional Focus Going Forward

[Satellite News – 2-1-08] Star One hopes to become more of a force in the Latin America region with the launch of a pair of new satellites, Gustavo Silbert, the president of Star One told Satellite News.

    The Brazilian operator closed 2007 with the launch of its Star One C1 satellite in November and is preparing for the launch of its C2 satellite before the close of the first quarter. The satellites, manufactured by Alcatel Alenia Space, both carry 45 transponders — 28 C-band, 16 Ku-band and an X-band. Star One C1 will replace the Brasilsat B2 satellite and provide South America with high-speed Internet and multimedia capacity. Star One C2 satellite will provide TV and telephony services for South America, Mexico, and Florida.

    “With Star One C1 and C2 we will have coverage over Argentina, Chile, Mexico and Paraguay,” Silbert said. “We are becoming much more of a regional operator for Latin America. We are not only a Brazil focused operator. That is one of our biggest challenges for 2008, this transformation into a more regional player. We want to consolidate the company as the number one satellite operator in the region.”

    In an exclusive interview with associate editor Mark Holmes, Silbert discussed the challenges as Star One looks to become more of a regional force.

Satellite News: What do you see as the major growth opportunities for Star One?

Silbert: A lot will depend on our two new satellites. We launched Star One C1 on November 14. With this new satellite, we are replacing the C-band capacity we have with the old B2 BrasilSat satellite. We are replacing 28 C-band transponders, but we are adding 16 new Ku-band transponders. It means we now have a great tremendous growth opportunity for Star One. We will use this new Ku-band capacity for video applications as well as satellite broadband. We will look to working with governments as well as having mass market applications.

    In terms of growth, it is about how to reach our customers in a faster way. We are looking to address the broadband market in a faster way. We will do this with Embratel. They are one of the major telecoms companies in Brazil. They are very focused on corporate markets, long distance and Internet access, so Embratel will be the key channel to address the end customers for our capacity by providing to them services using our capacity. This association with Embratel will be a key factor in our ability to sell the capacity on our new satellites quickly, and address the markets we want to address.

Satellite News: How do you see the broadband access market developing in Latin America?

Silbert: Satellite broadband is an opportunity in Latin America, but it is also a tremendous risk. WildBlue, for example, developed a satellite especially for satellite broadband. So if your plans don’t go as well as you hope, then you may have a tremendous problem because you cannot switch your satellite to sell video applications. At this point in time, the relationship between the risk and the possible return means to have a dedicated satellite broadband satellite is not something to consider yet. We are studying this, but at this point we don’t have any conclusions.

Satellite News: How much capacity have you sold on Star One C1?

Silbert: The take-up of capacity on Star One C1 has been in line with our own expectations, but I cannot give you more precise figures.

Satellite News: How do you see the demand for satellite communications in Latin America developing over the next three years?

Silbert: We think the demand will grow a little bit, especially because of new IPTV applications and digital TV coming into all Latin American countries. I also think you will see HDTV (high-definition TV) come very soon in Latin American countries. This is in the broadcast scenario. If you go to the trunking scenario you see there are also opportunities in cellular backhaul. These applications will play a very important role. A third part of this demand I see is broadband access for special segments, so areas where there isn’t the required terrestrial infrastructure.

Satellite News: How do you see the video markets developing in Latin America over the next 12 months? Do you see IPTV and the demand for IP applications impacting satellite here?

Silbert: I think before you see IPTV-impacted television markets in Latin America, you will see HDTV making more of an impact. This will impact the satellite business. 2008 will be a key year for digital broadcasting in Brazil. The move to digital will begin. With new TV standards, this will fuel the move to HD. I think IPTV will have more of an impact later on.

Satellite News: Are there untapped markets for satellite communications in Latin America?

Silbert: We are addressing most of the demand that is in the market. However, I believe that the market needs a better application for broadband Internet access. As you know, the VSATs are very expensive. It is too expensive for most operators. In order to have a return on the investment, we have to have very high prices to customers. I believe a better cost structure could be the key for satellite broadband. For example, there could be concessions in terms of import tax by building VSATs plants in Brazil. This could accelerate the penetration of satellite broadband.

Satellite News: Will you need bigger, more powerful satellites to cater for demand?

Silbert: I believe we will be OK with the two new satellites that we have. For the future, we are still planning what to do and what kinds of satellites. We will finish the planning by the middle of 2008. One of the conclusions could be that we need further satellites, but that is not decided yet.

Satellite News: How will you continue to compete against the global operators?

Silbert: We don’t have the scale to buy satellites at cheaper prices the way big operators can, but at the same time, we understand the market and the customers better. That is why I believe we are so successful and have our satellites so full.

Satellite News: Do you believe transponder pricing in the region will remain stable?

Silbert: Transponder pricing in the region is quite stable now. There is very little overcapacity in the region.  

Satellite News: Has the SES Global-GE deal had any impact the day-to-day operations of Star One?

Silbert: The six years that SES was a shareholder, Star One was very independent operationally from SES. SES clearly was an investor, not as a company providing technical or commercial stuff to us. All we have seen is a change of investors.