Telesat View of Key Markets Bucks Conventional Wisdom

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Conventional wisdom among the principal satellite fleet operators is that the North American market will not see much growth in the coming years, whereas East Asia is ripe for consolidation among the region’s multiple satellite owners, some of which are on shaky financial ground.

Telesat of Canada takes the opposite view on both matters. Telesat Chief Executive Daniel S. Goldberg said all the company’s recent growth has come from North America, particularly the direct-broadcast satellite television business, and that this growth is continuing. Telesat has leased capacity to U.S. and Canadian satellite television broadcasters.

Telesat has three satellites under construction. Two of them, for the North American television market, are sold out for their full 15-year service lives. “We’re full on our DTH satellites,” Goldberg said of the direct-to-home spacecraft in orbit and planned. “Eighty percent of our revenue comes from North America.”

Some market observers, including several on Wall Street, have been waiting for a consolidation of what appears to be an overcrowded satellite operator market in East Asia. Most observers still expect one or more single-satellite operators to merge or to be acquired as they face satellite-replacement decisions.

But East Asia also has witnessed the arrival of new satellite operators in the past couple of years, including ABS of Hong Kong and Vinasat of Vietnam, both of which are growing.

“It is the one market in the world where I believe in 10 years there will be more operators than there are today,” Goldberg said.

Referring to the four largest commercial satellite fleet operators — Intelsat, SES, Eutelsat and Telesat — SES Chief Executive Romain Bausch said East Asia “is the only place where none of us has a very significant market share.”