New Capacity, Emerging Markets Key to Satellite Growth, Executives Say
The satellite operating community can create more revenue by providing capacity in emerging markets, satellite executives said Tuesday at the Satellite 2014 conference in Washington. New capacity and continuing to find ways of bringing down costs will make the industry more efficient and effective, they said.
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There’s growth in Africa, Asia, Latin America and the Middle East, said Michel de Rosen, Eutelsat CEO. “If we can go to these markets, then we can generate more growth.” Eutelsat intends to bring capacity to emerging markets, he said. Over the next two years, the company plans to expand revenue more than 5 percent per year, he said.
The industry has to be more efficient and it has to push boundaries, said Intelsat CEO David McGlade. “Growing in single digits is still good for our investors,” he said. “For us, the challenge is how do we … push through some of those barriers."
Telesat had strong growth last year “on the back of new capacity,” said CEO Daniel Goldberg. It plans to add new capacity and launch additional satellites next year, he said. Growth “will be tied to the capacity we bring in,” he said.
The satellite market can be expanded by changing the economics of the industry, said McGlade. “If we can find ways to bring costs of manufacturing satellites down and drive throughput … we can expand our market.” Satellite operators also must continue to innovate and become more efficient, he said. As smartphones become less expensive in emerging markets and the demand for broadband expands, the satellite industry will have to redefine what the market is and expand it, he said. The industry must innovate “to be relevant in the telecom and media landscapes,” he added.
It’s imperative for the satellite industry to gear up for the World Radiocommunication Conference (WRC-15) next year, executives said. “We have to understand our competitors and what they're trying to do,” said McGlade. The industry must share with others “the real impact we have today with our services,” he said. Satellite capacity enables broadcasting, the delivery of content around the world and military communications, and it brings communications to rural areas, he said. “You can’t do that effectively without satellite.” The industry needs to push that message forward, he said. Operations in the C band are expected to be discussed, but the discussions could turn to other frequencies, he added. “We need to demonstrate how intelligently we use every megahertz of capacity."
Satellite operators need to explain that what they do is very “useful and precious” for civilians and the military, said de Rosen. “We must explain that the study currently used by ITU to estimate the demand of spectrum for the mobile industry is simply flawed.” There’s a major exaggeration of needs of spectrum other than for satellites, he added. “Where other people would like to take our lunch, they don’t care that what we do is very useful.” Some companies in other industries using spectrum capacity want to expand their business in a limitless way, he said: “They will say whatever it takes to convince people who don’t know enough.” The ITU is “quite neutral” and gives consideration to the interests of satellite, said Romain Bausch, SES CEO.
The demand for C-band services remains robust, executives said. “There’s a large segment of the user community that not only likes, but strongly prefers, C band,” said Telesat’s Goldberg. For applications in energy and the global system for mobile communications segment, there’s a heavy demand for C band, he said. “There’s a lot of talk about Ka band, but demand for C band is robust.” C band also remains relevant for SES customers, except in the European market, Bausch said.
Electric propulsion is a major technology for the satellite industry, said de Rosen. The cost per transponder will be reduced, and manufacturers are already working to develop technologies for electric propulsion, he said. Electric propulsion is an important part of the equation, “but it’s not the only game in town,” said McGlade. Other innovations, like laser tech, antenna development and digital tech with software configurable approaches, also are important, he said.