Eutelsat’s formidable bandwidth covering the Middle East and Central Asia made the company a rock star for the U.S. Defense Department as military demand for capacity in those regions surged.
The music is different now, and Eutelsat has told investors that its overall revenue growth rate will slow to no more than 6 percent per year between 2013 and 2015 versus the 6-7 percent previously forecast.
How far and how fast U.S. military use of commercial bandwidth in the Middle East will decline is uncertain. Eutelsat estimates that around 25 percent of its military sales, much of it through intermediaries, is of noncritical communications and thus most exposed to budget cuts.
The decline in military demand may turn out to be no more than a decline in the growth rate, which in the past few years has been at a double-digit clip — up nearly 17 percent for the 12 months ending June 30, 2012.
Also slowing Eutelsat’s growth is what company officials say is a temporary slowdown in demand from Africa, where undersea cable on the coasts, and multiple satellite operators in-country, are providing more competition.
Eutelsat’s core business of providing satellite television continues to grow, and the continued progress of high-definition television makes that business look solid for the coming years.
Eutelsat in 2012 expanded its geographic reach by purchasing a satellite over the Pacific Ocean region, giving the company a growth path there. It also purchased rights to an orbital slot over South America, but has not given clear signals of what it will do with it.
In an indirect investment in Latin America, Eutelsat increased its ownership stake in Spanish satellite fleet operator Hispasat, which has made Latin America the core of its growth strategy.
Eutelsat has revamped its sales strategy for consumer Ka-band broadband in Europe from the Ka-Sat all-Ka-band satellite, and company officials said early results in 2013 have validated the new approach. Hard numbers should be forthcoming when Eutelsat reports its full-year financial results, for the fiscal year ending June 30, at the end of July.
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