Satellite TV Demand Sees Rapid Rise in Latin America

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Latin American satellite television demand is growing so fast that veteran regional broadcaster TIBA has seen fit to book substantial satellite capacity from operators Intelsat and SES, among others, through 2028 to ensure that it has sufficient capacity, TIBA Chief Executive Norberto Alvarez Vitale said.

In a Sept. 12 presentation, Vitale said Argentina-based TIBA made its move despite the fact that new satellites are coming into the region, causing concerns among existing operators that the region may be heading into a period of oversupply. That would be good news for broadcasters like TIBA as it would put downward pressure on transponder lease costs.

Vitale agreed that new satellite capacity is being brought into the region. But he said not all of it is of the same value to broadcasters.

“You could have two identical satellites and, because of its coverage, one would be selling for twice the price per transponder as the other,” Vitale said. “It all depends on who is looking at the satellite. For certain coverage between the U.S. and Latin America, there are only four satellites that are available and they are all sold out.

“We transmit to 4,000 cable head-ends in the region. A new satellite arriving will not have so easy a time finding a place.”

TIBA expects to report about $33 million in revenue in 2011 and has $127 million in backlog.

Vitale pointed to figures produced by the largest U.S. satellite television broadcaster, DirecTV Group of El Segundo, Calif., showing that DirecTV Latin America is now posting higher gross-profit margins than DirecTV’s U.S. business.

The growth in satellite television in Latin America in recent years, he said, does not account for the coming demand for high-definition television and its demand for more satellite bandwidth.