Transponder Demand Helps Restore Market Balance in Latin America

by

WASHINGTON — After years of worry that their region was about to suffer an excess of capacity, Latin American satellite operators now say rising demand and the cancellation of several proposed satellite projects has brought supply and demand into better balance.

In a March 26 discussion of their market here during Satellite 2009, satellite fleet operators active in Central and South America went so far as to speculate on at least a temporary shortage of satellite capacity given forecasts of growing demand for standard- and high-definition television and broadband data transmissions.

Delores Martos, vice president of sales for SES Americom/New Skies, a division of SES of Luxembourg, said even the predicted growth in C- and Ku-band capacity in the next two years may not be enough to handle the rising appetite for direct-to-home television and government-sponsored projects to promote rural connectivity.

“There are more than 180 million Internet users in Latin America – up 18 percent in 2008 compared to 2007,” Martos said. “The government-sponsored [broadband] projects have surpassed expectations and are expected to occupy much of the Ku-band capacity in the next two to three years. Broadband is going to be a real catalyst for the region.”

Ruben Lecovitz, director of Hispamar, a joint venture of Spanish satellite fleet operator Hispasat and fixed-line telephone operator Oi of Brazil, said his company’s Amazonas satellite, launched in mid-2004 carrying a mixed C- and Ku-band payload and operated from 61 degrees west longitude, is sold out. Pre-launch sales for Amazonas-2, he said, have been better than expected. Amazonas-2 is scheduled for launch late this year.

“I am also concerned about the potential lack of capacity” in the region, Lecovitz said. “Ku-band is highly in demand, and C-band is too. The extension of digital access to schools, hospitals and government agencies is one reason.”

Lecovitz said one challenge for satellite operators is breaking down the barriers between the different cultures in Latin America to permit an efficient broadcast of television programming through a single Ku-beam over the whole of the continent rather than spot beams over selected areas.

Carmen Gonzales-Sanfeliu, vice president for Latin America at Washington- and Bermuda-based Intelsat, said Intelsat’s business in the region grew by 14 percent in 2008 compared to the previous year.

Pablo Andres Recalt, regional sales director for Telespazio Argentina, a subsidiary of the Rome-based provider of satellite ground systems, said there are still regions in Latin America where satellite prices remain below market. But as a general rule, in Ku-band “we are now looking at more demand than supply.”

Several planned satellite projects in the region, including part of an expansion program planned by Star One of Brazil, and by Satmex of Mexico, have been put on hold, while several other satellites with one or more beams over the region have not been replaced at retirement, these regional officials said.

The large new Venesat-1 satellite ordered by the Venezuelan government and launched last October has apparently not yet had an impact, and it remains unclear how Venezuelan authorities will position the satellite in the regional market.

But Argentina’s Arsatcompany is coordinating government-approved investment in an Arsat-1 telecommunications satellite for launch in 2012, according to Mariano Goldschmidt, Arsat’s commercial director. The Arsat-1 project’s goal is to stimulate development of a domestic satellite manufacturing industry. Goldschmidt said Arsat-2 and Arsat-3 satellites also are planned.

Arsat uses Argentina’s Nahuel-1 satellite at 72 degrees west, which Arsat-1 will replace, and the company has entered into leasing agreements with other satellite operators to fill capacity gaps and to help protect Argentina’s rights to the 81 degrees west orbital slot while waiting for the second and third Arsat satellites.

“We are not planning to compete against the big guys like Intelsat or SES,” Goldschmidt said. “We want to make sure there is sufficient bandwidth provided locally.”