Telesat‘s recent acquisition of The Spaceconnection Inc. represents a significant step to meeting that company’s strategic goal of increasing its presence in the U.S. market. The price of the transaction has not been disclosed.

Telesat Chief Financial Officer Ted Ignancy told Satellite News that in the mid 1990s, countries began moving away from domestic satellite mandates, resulting from pressure to open up the telecommunications market.

With those changes in mind, “We developed a strategy of trying to grow the business and expand our activities beyond the Canadian borders [and into] the Americas,” Ignancy said. “We wanted to move into South America. We wanted to move into the United States. Every satellite we have designed since then has at least coverage of the United States and Mexico. Anik F1, of course, also has coverage of all of South America.”

In the United States, Telesat enjoyed what Ignancy described as “good success” in the ground network side. “We have extensive operations in the United States in terms of installing, operating and maintaining the ground portion of satellite networks for our customers. That business is growing nicely for us.”

Ignancy also pointed to some success the company has had in terms of bulk capacity sales in the United States “We have a transaction, for example, with EchoStar on Anik F3 where they have done a bulk purchase of Ku-band capacity on that satellite. So that part of the business is doing quite well.”

But there were holes in terms of Telesat’s activities in the United States that drove the acquisition with Spaceconnection. “It’s probably the middle ground where we haven’t grown the presence in the United States to the same extent that it exists in Canada and we wanted to focus on that area to some extent,” Ignancy said. “A good portion of [Spaceconnection’s] business relates to the occasional use business, so it’s pretty much meeting peak requirements for broadcasters and cable companies” and others. “They do a good amount of full period business in the entertainment sector to smaller customers that need only partial channel services. So they will buy full period channels from operators and divide them up to sell partial channel packages to smaller users. That’s really the business of The Spaceconnection Inc.”

No Changes At Spaceconnection

One thing that Ignancy was clear about was that Telesat is not looking to change or to shake things up at Spaceconnection.

“The strength of the business is the very close relationship this company has built up with its customers,” Ignancy said. “We wouldn’t want to upset that in any way.” He said the company will operate as a wholly owned subsidiary of Telesat, will operate with its own officers and will be managed through a board of directors.

What Telesat will be looking to do is to bring Spaceconnection President and CEO Robert Patterson “up to speed with what Telesat’s capabilities are so that he has a better appreciation of what suite of services he can offer to his customers.

(Ted Ignancy, Telesat, 613/748-0123)