NEW YORK–Satellite broadband service providers and hopefuls see a rosy broadband future, but that can only be realized by sidestepping stiff competition in urban areas from for lower-priced terrestrial alternatives.

At the SkyForum conference here last week, satellite broadband executives said they are focusing on catering to the roughly 20 million rural and suburban residences and small offices in the United States that have no other broadband options. However, not all the speakers at SkyForum agreed that broadband would offer handsome returns on their investments.

Eddy Hartenstein, chairman and chief executive officer of DirecTV, highlighted the risk inherent for companies vying to offer similar services by suggesting that broadband may well become a “commodity.” With high-speed cable modem and digital subscriber line (DSL) services already available in large markets at lower prices than satellite providers can afford to charge, the challenge is significant. Satellite broadband services ultimately will to be “anchored” by TV sets in bundled services, Hartenstein predicted.

On the other side is Thomas Moore, chief executive officer of WildBlue Communications, a Denver-based company that recently received $156 million in new financing to launch a two-way broadband service via satellite in 2004. That service would be aimed at direct-to-home and small-office users throughout the contiguous United States.

With a “bent-pipe” satellite architecture, WildBlue expects to keep its costs low enough to price its service competitively with terrestrial broadband alternatives, Moore told attendees while speaking as part of a broadband panel. He estimated the potential market size for satellite broadband at 30 million to 40 million customers. He said his company would charge between $40 a $50 a month. The equipment a consumer would need to buy to use the service would range between $200 and $400.

McLean, Va.-based StarBand, a two-way satellite high-speed Internet provider offered a dose of reality. StarBand has had to “downsize” to reduce its expenses. The company now is trying to boost sales by letting consumers order service directly through the company either online or by phone, said Zur Feldman, StarBand’s chairman and CEO.

The “StarBand direct sales” channel will target a prospective customer base of more than 20 million people in U.S. homes and small offices who cannot receive DSL or cable modem services. Potential customers will be able to purchase equipment and high-speed satellite Internet services directly from the StarBand web site or by using a toll free phone number. StarBand previously relied solely on a sales network of 2,500 retailers in the United States, Puerto Rico and the U.S. Virgin Islands.

“Just about every satellite video provider is looking at the competition and realizing that broadband is a must if it is to compete with bundled cable, especially its telephony and modems,” said Jimmy Schaeffler, president of The Carmel Group consultancy. “That means a lot of pressure on the engineers creating these solutions. Still, we’re talking about a two to four-year time frame, at least, before we see the possibility of a viable two-way consumer satellite Internet and broadband solution.”

–Paul Dykewicz

(Zur Feldman, StarBand, 703/245-6200; Brad Greenwald, WildBlue, 720/554-7400; Jimmy Schaeffler, The Carmel Group, 831/643-2222; Bob Marsocci 310-662-9986)

Stees Named CFO At Space Imaging

Satellite imagery supplier Space Imaging has appointed Charles “Chuck” S. Stees to the position of chief financial officer. Stees will be responsible for the overall management and direction of Denver-based Space Imaging’s long-term financial plan including the economic analysis of business operations and the evaluation of the financial impact on related initiatives being considered by the company. Stees moves to Space Imaging from Lockheed Martin [NYSE: LMT], where he held executive management positions. Most recently, he was the vice president of marketing, sales and strategic planning for Lockheed Martin Commercial Space Systems.

HNS Launches DirecWay in Brazil

Hughes Network Systems (HNS), a Germantown, Md.-based unit of Hughes Electronics [NYSE: GMH], has launched its DirecWay broadband by satellite services in Brazil and throughout South America. Through a newly formed subsidiary, Hughes Telecom Americas based in Sao Paulo, DirecWay services will be marketed to small, medium and large enterprises in the region. Hughes Telecom Americas was created to provide telecommunications services in the region following the granting of a license by Brazilian telecom regulator Anatel in January.

WorldSpace’s Government Unit

Satellite radio service provider WorldSpace has launched a sales unit to take advantage of the growing satellite demand in the government market. This unit will enable government agencies to extend communications into markets with limited telecommunication infrastructures. In addition, it will provide Washington, D.C.-based WorldSpace with more revenue channels for its subscription-based services. The company plans to announce its first contract with the U.S government in the upcoming months.

Norsat Wins Military Contract

Norsat International [Nasdaq: NSAT], a Burnaby, British Columbia-based firm, has won a contract worth in excess of C$1 million (US$730,000) to supply components for use in military shipboard satellite terminals. The contract is with a military customer — whose name cannot be disclosed due to contractual agreements — that previously purchased 24 Norsat SecureLink satellite terminals (formerly called picoTerminal). These terminals were deployed in the field during 2002. Under the same contract, the client has the option to purchase an additional C$800,000 (US$583,000) of the same components within the next 19 months.

OSIRIS Mission Extended

The Canadian Space Agency said that its OSIRIS (optical spectrograph and infrared imager system) instrument flying onboard Swedish satellite Odin will provide data relating to ozone depletion for an additional year. The satellite and instruments, including a radiometer for microwave radiation, are still functional after having completed their two-year initial mission, the agency said.

The OSIRIS instrument, built by Routes AstroEngineering of Ottawa, Ontario, began transmitting scientific data to Earth in May 2001. These measurements are used in research done by the Canadian atmospheric science team at the University of Saskatchewan.

Canada Readies MOST Launch

The Canadian Space Agency’s MOST microsatellite is scheduled to blast into orbit on June 30. Built at Dynacon of Toronto, and the universities of British Columbia and Toronto, MOST (Microvariability & Oscillations of Stars) is being flown from Toronto to Moscow and is scheduled to arrive Monday at its launch site, the Plesetsk Cosmodrome in northern Russia.

MOST, Canada’s first space telescope, will make specialized observations beyond the capacity of any other instrument, including the Hubble Space Telescope. Once in orbit 820 kilometers (510 miles) above the Earth, MOST will circle the planet in 100 minutes, at 27,000 kilometers per hour (16,778 mph), passing multiple times daily over ground stations in Toronto and Vancouver, and a backup in Vienna.

Xytrans Offers Off-the-Shelf VSAT

Xytrans, which produces high-frequency radiofrequency subsystems for broadband communications, has released its latest two-way satellite VSAT outdoor unit that integrates a high-performance Ka-band block upconverter with off-the-shelf Ka-, Ku- or X-band receivers. Orlando, Fla.-based Xytrans markets its VSAT units to manufacturers of satellite hubs and terminals, which are working to roll out broadband satellite services to homes and small businesses as early as 2004.