FSS Operators Look For Good News In 2002

Last year will not go down as one of the greatest for satellite operators. In fact, with capacity pricing pressure and harsh operating conditions, the game for many was about consolidation and preparation for the year ahead and in particular the drive towards broadband.

In Asia, AsiaSat had a tough time as a price war ensued between operators. AsiaSat CEO Peter Jackson recently told Interspace that the operator has been hampered by regulatory regimes in the region and believes the pricing pressure will force a number of its competitors out of business. Jackson said the recent delay of the launch of AsiaSat 4 would not unduly harm the operator. It hopes to launch AsiaSat 4 within the next three months.

In Europe, operators such as Hispasat and New Skies showed encouraging signs. New Skies, which has recently launched the NSS-7 satellite, benefits from a strong balance sheet where it has minimal debt. It is not expecting high levels of growth in 2002, but according to analysts could achieve double-digit growth in 2003. Its strong balance sheet gives it greater leverage to fund acquisitions, although this is not considered vital.

Hispasat showed encouraging signs and its future will depend largely on its performance in Latin America going forward. It has teamed up with Eutelsat and if the Latin American broadband market takes off, will be in a prime position to derive revenues from there. It is launching its Latin American Amazonas satellite in 2003. Jacinto Garcia Palacios, Hispasat’s CEO recently told Interspace that the operator was not unduly concerned with the present problems in local economies and believes the markets will ultimately pick up. Hispasat has around 200 million euros ($188 million) of debt.

In the United States, PanAmSat initiated a widespread restructuring programme to cut costs. Despite a fall in revenues, the picture has somewhat improved. It appears the PanAmSat management has the backing of Charlie Ergen and EchoStar and could be making acquisitions to boost its global position. Its financial health is clearly improving. It may well look to Europe to boost its asset base. Joseph Wright, CEO of PanAmSat told Interspace that the operator would like to get into the European market. If British Telecom and Deutsche Telecom sell their respective stakes in Eutelsat (28 percent), PanAmSat could well be a likely buyer.

SES Global’s year-end results were somewhat distorted because of the Americom acquisition. Its main focus will continue to be on data, which it hopes will ultimately account for between a third and a quarter of its revenues by 2005. Its joint venture with Alcatel Space and Gilat Satellite Networks was a major step forward. Broadband revenues in 2001 had been a little disappointing. Its acquisition of Americom enabled it to save one billion euros ($940 million) in terms of satellite cancellations. SES Global CEO Romain Bausch told Interspace that the operator expects low single digit growth in 2002. Bausch also said his company “may look to acquire in a selected mode” assets in both Latin America and Asia.

–Mark Holmes