Satellite Industry Expected to Remain Stable During Downturn
The satellite industry can expect to feel the full impact of the recession within a year, said Peggy Slye, director of space and telecommunications for Futron. “Our industry tends to lag the general economy by about two years,” Slye said at Satellite Week 2009. She said she also doesn’t expect the impact to last long due to a myriad of economic growth opportunities.
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The satellite ground segment is one aspect of the satellite business where analysts see growth. Another source of income expected in the near future will be military contracts. “The world is still a dangerous place,” said Hoyt Davidson, managing partner at Near Earth. “We're going to Afghanistan and there are lots of reasons to expect the commercial sector will go up.”
Finding funding in this economy is still possible, but paying attention to detail and being thorough with a request is key, speakers said. “Business plans are going to be looked at very carefully,” said Dana Panahy, partner at Milbank, Tweed, Hadley & McCoy. “Filings have to be clean. Any problems or weakness may result in additional scrutiny or the project not being funded.” Also, projects with quicker turnaround times are preferred.
Receiving money from the broadband stimulus is also necessary to keep the satellite industry finances bright, some said. To be eligible for the funds, the satellites need to find a way to prove to the government they are able to provide the same quality of service as other telecommunications industries, they said. “What would it take for the Obama administration to figure out that the satellite industry has a major role in delivery of broadband universal service?” asked Thomas Watts of Watts Capital. Watts also said slow regulatory changes could impede financial advancement in some areas of the satellite business. He used the XM/Sirius merger as an example: “Our regulators need to recognize that information moves at the speed of light but our regulatory process has grown slower.”