Nearly Booked Hispasat Plans To Double Capacity

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PARIS — Spanish satellite firm Hispasat is reporting that its three operational satellites are more than 99 percent booked, a nearly unheard-of fill rate for a commercial operator and one that explains why Hispasat plans to double its capacity by 2012 and may go further than that, Hispasat Chairwoman Petra Mateos said.

Highly profitable with a gross profit margin of 80.5 percent, and with little debt, Hispasat has been the subject of much speculation about whether it would purchase one or more satellites that are currently in orbit but for sale by their owners.

Mateos declined to speculate on whether Hispasat — whose major shareholder, Abertis Telecom of Spain, also has a sizable equity stake in satellite operator Eutelsat of Paris — would stick with the organic-growth model it has pursued so far or would seek to make an acquisition.

Carlos Sagasta, finance director for Abertis Telecom, said the Abertis investments in Hispasat and Eutelsat look especially good given the poor returns of other industries in the past three years.

“A company reporting 6 percent to 8 percent revenue growth looks like a great business compared to the minus 3 percent or minus 4 percent we have seen in other sectors,” Sagasta said. “We are seeing widespread demand [for satellite capacity] now. … Larger players have a substantial advantage over smaller players.”

Abertis owns 32 percent of Eutelsat, and Eutelsat owns 27.7 percent of Hispasat. Abertis separately owns 33.4 percent of Hispasat. Abertis and Eutelsat have both been blocked by the Spanish government from taking a controlling stake in the Spanish operator.

Hispasat is continuing to build up its original 30 degrees west longitude orbital slot, with a third satellite, Hispasat 1E, to be launched there in 2010. At the same time it is developing its 61 degrees west orbital position, which serves Latin America and also provides trans-Atlantic links, with the launch of an Amazonas 2 satellite set for late this year.

The company has yet to announce where it will put its Hispasat AG1 satellite, which will  carry 20 Ku-band and three Ka-band transponders and is scheduled to enter service in 2012. Hispasat AG1 will inaugurate a new satellite platform built by OHB of Germany with funds from the European Space Agency.

Hispasat continues to debate when to order an Amazonas-3 satellite with a C-, Ku- and Ka-band payload, to add still more capacity at 61 degrees.

Hispasat also has a minority stake in two mainly X-band satellites, Xtar-Eur and Spainsat, which are intended to sell capacity to allied governments through the Hispasat and Xtar companies.

Like its larger rivals in Europe — SES of Luxembourg and Paris-based Eutelsat — Hispasat’s success thus far has been propelled in large part by the direct-to-home satellite television business.

More than 1,100 TV and radio channels were carried on Hispasat satellites at the end of 2008, double the traffic of mid-2006.

At its 30 degrees west slot, occupied by the Hispasat 1C and Hispasat 1D satellites, with the larger Hispasat 1E to arrive there in 2010, 40 percent of the capacity is used for digital television distribution. Another 23 percent is used to distribute television and radio programming in Europe, while 11.5 percent is used to send television programming to the Americas.

But at the 61 degrees west slot, the majority of the traffic is for very small aperture terminal, or VSAT, networks for business and government communications including government-sponsored efforts to provide connectivity to rural areas.

About 31 percent of the capacity at 61 degrees is for digital television broadcasts.