David McGlade, CEO, Intelsat

Intelsat CEO David McGlade feels the fixed satellite services (FSS) sector is in a good position today, but he would like to see the industry as a whole “spend more time looking for big growth opportunities” in order to prepare for the future.
    “We talk about what has happened over the last few years,” he said. “DTH, for example, was a big breakthrough. You could argue XM-Sirius has been a moderate success. With WildBlue and HNS (Hughes Network Systems), consumer satellite broadband has been a moderate success. But what are we going to do as an industry to look for bigger things to happen? I worry that we don’t do enough. There is an attitude that this is business as usual. The main operators have all had a good year so far, but going forward, you have to think about what are we going to do to drive this industry, and I don’t feel as though we have done enough.”
    In a wide-ranging interview, McGlade discusses growth opportunities for FSS players such as Intelsat and what he thinks about growth areas such as mobile TV, satellite broadband and IPTV.

Satellite Today: Is Intelsat’s vision of the future based on applications or satellite capabilities?

McGlade: I see them as interdependent. We are continually seeking improved technology to bring to the industry. When that technology breaks through, we then have robust platforms for new applications that can serve our customers’ business objectives. For example, when I was working in the cellular industry, we were seeking technological avenues to bring data applications to our enterprise cellular customers. Both the technology and applications fell into place and we successfully rolled out services to our O2 customers. You have to take both into consideration or you may fail.
    Today, the satellite industry’s technology is a mix of space-based and terrestrial services. What you don’t want to do, in my opinion, is directly compete with mature technologies and services in established markets. An industry-announced plan that Ka-band can compete head-to-head with terrestrial technology, for example, is intriguing, but seems challenging. I hope it happens. So, what can we do? We should look at providing broadband to underserved global regions that have economically-stable countries that can support new applications rather than just focus on major cities that already have robust broadband capacity.

Satellite Today: Could the success of WildBlue be replicated elsewhere?

McGlade: It would be great to do elsewhere in the world what we are doing with WildBlue in the United States. The hard part has been finding the countries and regions that will grow the same way as we have seen in the United States. As of today, the United States is the only market where there is decent penetration of consumer broadband, but there should be a play in other regions as well. In some countries in Europe it could work. I think it could also work in Latin America, Asia, and even South Africa.

Satellite Today: What is your view of satellite’s place in the mobile TV market?

McGlade: I think one thing we can do, and are successfully doing, is delivering video content to cellular towers. We have had great success with our support of the MediaFLO USA network deployment where we provided satellite bandwidth and connectivity to the MediaFLO USA transmitter sites for carriage of wireless multimedia distribution capacity, making it available to wireless operators in the United States. I don’t see as much of a driver for applications direct to peoples’ handsets. Given the robust infrastructure of the C-, Ku- and Ka-band FSS offerings, we are today in a stronger position to grow mobile applications by working with partners to address markets such as the maritime, automotive, aviation and even rail. S-band to me is more speculative. We will watch and see how this develops over time.

Satellite Today: Verizon has more than 1 million TV subscribers. Will they continue down the partnership route with DBS players or could they go it alone and add the satellite part themselves?

McGlade: In the United States, the telcos have combined offerings with the DTH providers. Verizon has the quadruple play. They can bundle all the services together. What the discussion has been in the United States is when Verizon or AT&T will buy DirecTV or EchoStar. You never hear of them starting it on their own. A lot of telcos are network orientated. They don’t like the idea of not having a network infrastructure. It is hard for them to do it. With AT&T and Verizon being so big, they don’t have to buy EchoStar or DirecTV, they could go and do this on their own.

Satellite Today: Do you think there will be these sorts of deals where telcos will come to you and look to combine IP with satellite when offering TV?

McGlade: I would love for them to come and do that, but I think it is far more likely that the small- to medium-sized telcos will need our solution. 

Satellite Today: Could your IPTV service strategy be replicated in other regions of the world?

McGlade: There is, but it is a little early. We are trying to further expand and leverage our platform in the United States. We have had interest in other parts of the world such as Asia, Europe, the Middle East and Africa. We believe the platform should be open, interoperable and upgradeable as well as MPEG-4. All these things are going into our structure and allowing our customers to pick their own middleware, security and access technologies as well as their own set-top boxes. … We are continuing to have dialogues outside of the United States, but this was the first IPTV platform we built so we want the platform to prove itself more fully before we globally expand. That, however, does not mean that if the right opportunity comes along, we would not more robustly explore non-U.S. rollout of IPTV services. 

Satellite Today: Where new growth areas are others not looking into?

McGlade: People want on-demand content access at anytime. They want speed and quality, but how do you provide that? Our industry does not have something similar to CableLabs, which came up with technology, such as the DOCSIS standard for broadband, which really made a difference. This is an example. We are a smaller industry than cable TV, but certainly we could do a better job on how we could collectively leverage our technology and development and look at what could propel the industry in terms of applications.

Can’t get enough of David McGlade?  See him at SATELLITE 2009’s Opening General Session The Big Four: Setting the Pace for Expansion on March 25 at the Walter E. Washington Convention Center in Washington D.C.  Admission to the Opening General Session is included with your free Exhibit Hall Only Registration.