Intelsat’s Q3 revenue of $652 million slipped slightly...
Intelsat’s Q3 revenue of $652 million slipped slightly from $655 million in the same period last year. The business is doing well, “although pressures from the U.S. government budget, sequestration, and to a lesser extent, the effects of increased competition…
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in the Africa region are impacting our growth rates,” Intelsat CEO Dave McGlade said Thursday during a webinar on the company’s Q3 earnings. Network services revenue is up 1 percent at $300 million for Q3, he said. Transponder service growth was driven by cellular backhaul applications in Latin America, he said. Growth in managed services is a result of new service activations from maritime and aeronautical service providers in the U.S. and Europe, and cellular backhaul services in Asia, he said. Revenue in these applications and in those regions was offset by declines in some network services in Africa, McGlade said. Current trends there, like expanding deployments in terrestrial fiber and increased supply from traditional satellite operators that have more recently entered the region, have impacted the market, he said. The growth profile on the continent has drawn other satellite operators that compensate for their smaller position “by using price to gain market share with a customer that, for certain applications, is very price conscious,” he said. “These trends are having a more volatile impact on the lower end of the market, where some of our service provider customers have struggled to adopt a viable cost structure.” Intelsat expects sequestration and further reductions in government spending to have a direct impact on its government business, he said. This concern will remain for the balance of 2013 and 2014, he said. McGlade said Intelsat is open to merger and acquisition opportunities: “If a company fits well within our coverage footprint and it could add to our capacity for key regions that we think are useful for certain customer applications, like direct-to-home … we certainly could have an interest.”