PARIS — The global satellite communications industry grew overall in 2006, with the classic fixed satellite services businesses showing continued growth in the healthy markets of Europe and North America, and signs of a rebound in East Asia and South America.
Among the year’s highlights was the return to the stock market of two once-scorned low-orbiting satellite communications constellations, the Globalstar satellite-telephone company and the Orbcomm data-messaging business. Both raised sufficient capital on the U.S. Nasdaq market to permit them to move forward on second-generation satellite constellations.
On the fixed satellite services front, several predictions made by numerous market analysts did not pan out. Among them:
�A predicted buyout of satellite-fleet operator Eutelsat of Paris did not occur. Instead, several existing shareholders sold their stakes to different companies in deals totaling nearly 60 percent of Eutelsat’s equity.
�The purchase of Telesat Canada by a strategic partner did not occur, nor was a minority stake in the satellite operator floated on the Canadian stock market, as its owner, BCE Inc., had hoped. It remains unclear in which direction BCE’s sale of Telesat will turn.
�Loral Space and Communications made no acquisitions — a surprise to many in the market. Loral’s new chief executive, Michael B. Targoff, told shareholders in November that Loral’s Skynet satellite services business needs to grow or to be sold.
�No consolidation occurred in the still-crowded Asia-Pacific market. In fact, two new entrants — Protostar and Asia Broadcast Satellite — moved forward with plans to use already built spacecraft to enter the market.
One of the year’s surprising absences was the lack of a strategic partnership or acquisition involving the S- or L-band satellite companies building systems for two-way communications using ground-based signal boosters called Ancillary Terrestrial Components, or ATCs. In Europe, ATCs are called Complementary Ground Components, but the different appellation did not change the story: Despite the agreement by competitors Eutelsat of Paris and SES Global of Luxembourg to join forces on an S-band satellite, no investors emerged to take charge of the ATC network that will need to accompany the system.
TerreStar Networks, ICO Global and Mobile Satellite Ventures all moved forward on their satellite systems. McLean, Va.-based TerreStar announced a contract with Space Systems/Loral for the construction of a second S-band satellite for its S-band system. Loral also is building a satellite for ICO Global, which plans to launch an S-band system in late 2007. Reston, Va.-based Mobile Satellite Ventures’ two-satellite L-band project is under construction at Boeing Satellite Systems International. London-based Inmarsat, which also is weighing the ATC market entry if an investor shows up, expects to launch its third L-band Inmarsat-4 satellite in 2007. Inmarsat in 2006 announced it is taking over Indonesia’s Asia Cellular, or Aces, business as a way to speed Inmarsat’s entry into the hand-held satellite-telephone business.
All these companies said the results of a U.S. government auction of spectrum in mid-2006 for what are called Advanced Wireless Services confirmed the value of the spectrum resources these ATC-candidate satellite companies already have in their possession.
Not everyone agrees. Roger Rusch of TeleAstra, a consultancy, said the spectrum auction’s final per-megahertz price fell short of predictions and should not be seen as a blanket endorsement of satellite ATC.
While disagreeing with Rusch, Inmarsat Chief Executive Andrew Sukawaty said the several billion dollars needed to deploy an ATC network in the United States makes it far from certain that such a system will be deployed.