Management teams that fail to meet the needs of their customers are destined to lose them. Indeed, companies that once promoted their state-of-the art satellite communications capabilities now increasingly focus on using whatever technologies are best suited to meet a particular customer’s needs. The change is understandable and necessary to survive and to thrive in business today.
A key lesson can be learned from high-profile bankruptcies involving brand-name satellite communications companies such as Iridium and Globalstar. Those multibillion-dollar ventures never came close to producing enough revenue to cover their costs before they each needed to restructure through bankruptcies. They also focused solely on offering high-cost satellite communications services and took so many years to launch services that cellular technology became much more affordable and practical for a mass audience. As a result, the satellite voice companies failed while cellular growth skyrocketed.
The fallout corresponded with a loss of luster for space-based solutions that has led a number of surviving companies to offer a variety of technologies. Satellite communications generally holds a technical advantage in serving remote and rural users who need point-to-point or point-to-multipoint communications. In those instances, satellite communications make a compelling business case.
However, such instances are the proverbial exception rather than the rule. A clear and unmistaken trend has emerged for providers of space-based communications to offer “managed services” that use whatever technologies best fit the unique circumstances of each customer. Companies that fail to adapt will find themselves struggling to retain customers who care little about how services are provided. Those users of services simply want cost-effective and reliable communications.
Harris CapRock President Tom Eaton told dozens of attendees at the recent Washington Space Business Roundtable about the value of deploying a variety of technologies to provide communications services to niche markets. Eaton, who recapped how his company’s growth in the past several years was spurred through acquisitions, explained that satellite, cable and wireless technologies now are used seamlessly by his company to serve its customers.
The reality is that satellite service providers must keep pace with the business needs of customers. In the case of serving energy sector companies, Harris CapRock has been required to adjust to customers who constantly seem to be adding services and applications to their remote operations. Open architecture, high-throughput satellite solutions have been deployed to support increasingly application-centric digital oilfield users. High-throughput provides an important enhancement because it offers much greater flexibility and increased control than was available in the past, especially in tapping open architecture solutions to support service to remote and harsh service requirements.
The key is to tailor the right technology for a given customer. A service provider these days needs to be technology- and frequency-band agnostic. In sum, focus solely on designing a solution for its performance and operational efficiency.
Another company that has transformed the way it operates is Intelsat, one of the world’s largest satellite operators. Intelsat underwent a rebranding many years ago to shed its previous identify as a space-based services provider. It has pursued a broadened mission as a communications company that could tap several different technologies to provide a needed service.
“Customers value the benefits of a satellite and terrestrial architecture that enables them to maximize their services,” said Ken Takagi, Intelsat’s director of managed video services. Intelsat’s aim in becoming a communications company rather than simply a global satellite operator led it to make changes that include investing in an Internet Protocol/Multiprotocol Label Switching fiber network that combines the capabilities of its eight teleports and global satellite fleet to support end-to-end, hybrid satellite-terrestrial services.
Intelsat now offers a network that lets customers choose among a combination of media, mobility and broadband service applications. The intent is to be able to support customers as their networks evolve.
It seems clear that satellite services are not the sole solution that many, or even most, customers seek these days. Management teams that recognize the situation will try to offer the best technology to help their customers. The companies that follow that approach will have the greatest chances of prospering.
The business environment is littered with far more companies than Iridium and Globalstar that needed to file bankruptcy to restructure their finances or that failed to survive at all. Executives who do not shift their strategies to fit the requirements of their customers by using the most cost-effective technology for each situation are leading their companies off a financial cliff.
Paul Dykewicz is a seasoned journalist who has covered the development of satellite television, satellite radio, satellite broadband, hosted payloads and space situational awareness.
