Emerging Markets, Improved Launch Options, Meeting Bandwidth Demand on Tap for Satellite Industry, CEOs Say
The commercial satellite industry must figure out how to overcome challenges, including launch service options, government budget constraints and expanding services in emerging markets, said executives Tuesday at Satellite 2013 in Washington. The real challenge for satellite is to become part of the telecom ecosystem and to be meaningful from a communications perspective, said Romain Bausch, SES CEO. Launch services must improve overall and some opportunities need to become more available, said executives from Intelsat and Eutelsat.
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Intelsat had issues with Russian launchers, said CEO David McGlade. Last month, the Intelsat 27 launch failed after liftoff on a Russian rocket (CD Feb 4 p15). There are workmanship issues that could have been avoided, he said. The process, workforce and other aspects “should be kept as fresh as possible and they need to do what they can to improve reliability,” he said. Intelsat plans to build a replacement, he said.
The Atlas 5 rocket has been too expensive, said McGlade. “They need to bring costs down,” he said. “If we can see a more competitive ULA [United Launch Alliance] where they launch more rockets and do it on time, that’s an option.” Sea Launch and International Launch Services (ILS) need to prove their reliability, he added. The launch industry has had its ups and downs, said Michel de Rosen, Eutelsat CEO. Arianespace’s Ariane 5 had its issues 11 years ago, he said. “Now they're the most reliable,” he said. “We need good launchers and choice, because you never know what will happen.” A good launcher has reliability, quality, availability and a low cost, de Rosen said.
Telesat CEO Daniel Goldberg sees Atlas and Delta as “out of reach, to commercial operators.” “We'd like to see them become more available,” he said. “The Russians need to get back on track.” He also said he'd like to see the SpaceX Falcon mission have successful launches and U.S. vehicles be more commercially competitive.
Under sequestration, the market is difficult and unpredictable, said McGlade. Ultimately, “we're involved in mission critical activities that will continue over time, and demand is increasing and not diminishing,” he said. “Many military contractors are trying to hold onto their revenues.” It’s difficult to get new contracts out with the reductions that are occurring, he said. The market will grow, said de Rosen. On the demand side, “there is a clear vision for DOD [Department of Defense], which is less tanks, planes and boats,” he said. “But they want to have more eyes in the sky.” Because DOD is reducing spending, on the supply side, it will impact other parts of DOD and will impact satellites that the department was thinking of acquiring, he said. In the short-term, it’s a challenging year, “but the outlook is a good one,” he said.
The emergence of over-the-top services is a nascent threat to fixed satellite services, said Goldberg. “The magnitude of the threat has been a little bit overblown.” OTT services provide an opportunity for Intelsat in the developing world, “where we have the infrastructure to support it,” said McGlade. In the U.S., it’s a negative “because it’s the most mature market,” he said. But the effect has been very small, he said. “They haven’t been able to monetize it.” Fixed services and OTT can live side-by-side, “but over time OTT will get bigger,” he added.
It’s key for companies to expand in all emerging markets, like Africa, Asia and Latin America, said speakers at the satellite conference. SES has 22 percent of additional capacity in its fleet, said Bausch. “Ninety percent is going to emerging markets … You need to be present in those markets.”