Will private equity ownership of satellite carriers save the industry or strangle it? Six of the top CEOs in the satellite industry thrashed out this question before a standing room only crowd at Satellite 2005’s Global Satellite Operators Roundtable on March 23.

Five of the six CEOs participating in the roundtable were for private equity ownership. “I think this is a very healthy thing for our industry,” said Joseph Wright, president and CEO of PanAmSat. “It’s given us a professional exposure and ability to approach the private investment community.”

“Generally, it’s a good situation,” said Conny Cullman, CEO of Intelsat. “I think private equity will add a new discipline to this industry.”

“I consider it a very, very positive move,” said Bernard Schwartz, chairman and CEO Loral Space & Communications. In the past, FSS companies were too small to convince large investment research firms to monitor the industry, he explained, which made it difficult to attract private investment. With private equity firms now having a stake in FSS, Schwartz believes that these companies will have an easier time getting new capital.

The lone voice of dissent was Romain Bausch, president and CEO of SES Global. Although he agreed that private equity investors will rationalize CAPEX and add discipline to the industry — which currently has 2500 unused transponders (1300 C-band/1200 Ku-band) in orbit — Bausch worried that private equity firms would siphon off too much cash from their newly-purchased FSS properties. “The fact is you can only spend your cash flow once,” he warned. “You have to make a balance between returning money to shareholders and investing in the future. It is very clear that most companies today are focused on returning cash to shareholders.”

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