Africa and Asia will offer satellite operators the best growth opportunities in the near term, industry CEOs said May 23 at the opening roundtable discussion at Intelsat‘s 31^st annual Global Telecommunications Meeting. Intelsat hosts the closed meeting annually to update its customers on the state of the satellite industry but invited press to cover the opening session.

In talking about Africa and Asia, the key message is that these areas are ripe for deployment of broadband services as well as providing backhaul for terrestrial cellular networks, executives said. “There are areas around the world that are more bandwidth–and data– hungry than before because of terrestrial [infrastructure] buildup,” said Britt Carina Horncastle, president and CEO of Telenor Satellite Services Holding Inc.

But for developing areas such as Africa, wholesale deployment of terrestrial networks never materialized, leaving a large opportunity for satellite providers to fill in the coverage gaps. Jean-Michel Trumpff, managing director of LinkAfrica, which provides telecommunications services in Africa, claimed Africa as “the fastest growing market” for satellite services.

In particular, Trumpff identified a specific opportunity within the African market–offering network services that reside solely within the continent. He offered an anecdote about how two sisters living on two sides of a river have their calls to each other routed through Europe rather than being routed within African borders. This is creating a demand. “The African people want a Pan-African solution,” Trumpff said.

But Africa is not the only area that is looking for backhaul services. Dave McGlade, Intelsat’s CEO, said providing wireless backhaul services in Asia also would provide business opportunities. “There has been an explosion of cellular development in China and India,” he said. “I think satellite will support this growth as it occurs.” It was McGlade’s first time formally addressing the satellite industry since taking over as CEO of the global satellite service provider in April.

Converging Technologies

Aside from geographic opportunities, the assembled CEOs also addressed how other technologies and services, when used in conjunction with satellites, can offer potential areas for growth. “We have to make sure our technology works with other technologies” like VoIP and WiFi, said John Kealy, president and CEO of iDirect Technologies. “We are seeing a demand for all those services.” Pradman Kaul, president and CEO of Hughes Network Systems agreed that working in conjunction with WiFi is “a great idea.”

But industry should not focus on other technologies at the expense of its own assets, McGlade added. “In general, [we] are always looking for the next great thing, but we don’t always exploit what we [already] have,” McGlade said, calling for the industry to take a look at current market opportunities and match it with the technologies that already exist.

But even in exploiting existing assets to their fullest, the industry needs to do a better job in working with other technology providers. “I would like to see more collaboration with technology providers,” Kealy said. “It would be helpful if we could work together.”

McGlade concurred, but with a more direct statement. “You don’t have a choice” when it comes to working with other technology providers. “Nobody can work alone,” Trumpff added.

The Private Equity Question

It wouldn’t be a satellite industry event if concerns about private equity ownership were not raised, but CEOs painted, once again, a positive picture for their customers.

Private equity investment “is a testament to the strength” of the satellite industry, McGlade said. He noted that certain things private equity firms look for are financial metrics such as predictability in cash flows.

McGlade also tried to calm the lingering concern that the private equity owners may be looking for a quick flip of their investments, drawing as much capital from the companies and not investing in future growth and replacement satellites. Future investment will be key to helping private equity owners realize a greater value from their investments, he said.

David Kagan, president and CEO of Maritime Telecommunications Network Inc. agreed. “They will continue to invest because future value is paid for by strategic investing.”

–Gregory Twachtman