AGS Aims For 30-Percent Growth In 2004

SES Americom’s government operation Americom Government Services (AGS) is expecting a strong performance this year, targeting 30 percent revenue growth in 2004. With demand rising from government customers, the operator is positioning itself to capitalize on the emerging opportunities in this area.

The recent acquisition by AGS of Verestar assets (Satellite News, April 12, p. 1) shows an aggressive push to grow this revenue source.

David Helfgott, president and CEO of AGS, told Satellite News in an exclusive interview, “We are about to complete our integration with Verestar, which has several very attractive contracts. Because they were in bankruptcy, they were unable to take full advantage of them. Once we get FCC licensing authority, we will really go after some of these great lines of business, including the State Department, the Navy, the Army, the Justice Department and the FAA.”

He continued, “We also are really excited about bringing Verestar into the fold to do integration, operate teleports and put fiber and satellite together in very rapid, excellent solutions.”

Verestar leverages satellite, fiber and teleport assets along with a full menu of value-added services.

Helfgott believes Verestar’s prior bankruptcy does not diminish the value of its services. “If you’ve got the right product platforms, you have this ability to provide coverage anywhere in the world,” Helfgott said. “That flexibility gives you speed and cost advantage, which is exactly what Verestar brings to us so we don’t have to build that. In fact, Verestar became efficient and lean with a specialization in terrestrial telecom capabilities of integrating terrestrial operations with space operations. It is more than just having an alliance with someone like Level 3 or another telecom company. It is actually bringing the network- centric mentality into your operations and strategy, and Verestar will help us leap out there.”

Pleasant Surprise

One thing that has surprised Helfgott has been government procurement procedures, particularly with the U.S. Department of Defense. “I initially thought it was a very formal, RFP-driven process, and there is plenty of that,” he commented. “However, the really interesting engagements are the ones where you come up with creative solutions to problems and then sell it through commercial terms and best practices. So there are a lot of similarities between the commercial and government satcom solution processes.”

But there also are differences. “It is the same technology and the same platforms, but different rules and norms. There are also other things that are different, such as protection of critical infrastructure and encryption. The government is much stricter than industry,” Helfgott added.

With more competition in this market, the key is flexibility. Helfgott said SES can flex its muscles here. “SES Global [SESG] is the largest satellite operator in terms of fleet size and revenue, and it is the most financially stable, most profitable, with a long-term, stable investor base,” he told us. “We have the most satellites in production. We are a healthy, growing, acquiring company compared to everyone else in the industry, perhaps with the exception of Eutelsat.”

It is this position Helfgott believes is the ultimate competitive advantage when picking up business in the government area. “You need to be flexible enough to respond sometimes in 24 hours to a requirement that could be global in scope,” he said. “So if you only have a few satellites or if you don’t have complete coverage of the Earth or you don’t have the terrestrial infrastructure that allows quick access and integration, you are unable to respond to these requirements. Not all requirements are 18-month procurement cycles. A lot of them are phone calls for 127 megahertz across these four regions by Monday.”

In terms of the main challenges facing the company in this area, “we want to continue to be the leading provider of satellite services to the U.S. government as well as the most profitable of all the fixed satellite services (FSS) providers,” he said. “We have sunrise contracts, which means contracts in their early years that are growing versus some that are retiring.

Contact: Monica Morgan, SES Americom, e:mail: [email protected]