Satellite 2012: 'Big Four' Operators Express Optimism for the Near-term
Washington DC - CEOs from the four largest satellite operators sat down for their annual roundtable discussion on the state of the industry at Satellite 2012. Last year was good and the executives expect 2012 to be solid, despite an expected decline in revenues from U.S. military spending. Longer term, smaller regional and national operators may pose a threat to the size of the worldwide market share currently held by larger operators.
Intelsat (News - Alert) CEO David McGlade said his company ended 2011 with a record backlog and strong growth expected in 2012. “The landscape is optimistic for growth in media,” McGlade stated. “The [U.S.] government is in a transitional year well beyond the drawdown, with changes in technology, mobility, and UAVs.” Intelsat was moving to address customer needs by moving beyond just selling capacity to more complex solutions and Latin America was “growing like a weed.”
Telesat (News - Alert) CEO Daniel Goldberg and Eutelsat CEO Michel de Rosen echoed McGlade's assessment of 2011 for their respective companies. Eutelsat closed out its FY 2011 fiscal year with “double digit” growth and expects “good” -- but not double-digit - growth in 2012. De Rosen joked that U.S. investors needed to buy shares in his company.
SES (News - Alert) CEO Romain Bausch also reported his company expected good growth moving forward. A significant benchmark was reached in Germany when Direct-to-Home (DTH) subscribers in Germany surpassed cable for the first time, with over 7 homes signed up for satellite services.
Three out of the four CEOs say there's little overcapacity in fixed satellite services. Instead, they expect more capacity to come on line with new spectrum like Ka-band. McGlade said while “supply and demand get out of kilter in the short term,” longer term there will be demand for all types of capacity around the world, especially in media around Africa.
Goldberg believes overcapacity is more driven by the “idiosyncratic traits” of operators. He expects some fall off from U.S. government activities, but Latin American demand continues to grow, a sentiment shared by de Rosen. Eutelsat (News - Alert) is “continuing to look at an inorganic way” to increase its presence in Asia, as well as continue to expand capacity and establish its own presence in Latin America; it currently works through Satmex.
SES is seeing oversupply in the African market and believes it might happen in other regions of the world, said Bauch. “We have to take into account the desire of emerging countries to have more a equitable access to space,” Bauch stated. The overall market share of the Big Four will likely decrease as new national and regional satellite operators are being created.
Edited by Jennifer Russell