Satellite operators active in Latin America say transponder-lease prices still are lower than they would like but appear to be stabilizing, in part because of the consolidation among the major players.
Consolidation has reduced the number of satellite-fleet operators in the region from a high of about 11 to six following the merger of Intelsat with PanAmSat; Telesat Canada with Loral Skynet; and SES with New Skies, said Delores Martos, vice president for Latin America at SES New Skies.
“Around 2001-2002 we saw prices fall below levels needed to make a profit,” Martos said Feb. 27 during a discussion of the Latin American market at Satellite 2008 in Washington. “That led to lower investment by some companies, and this has helped stabilize prices. Prices are now getting to levels that make it reasonable for operators to invest.”
Arguing that the economic growth in several Latin American nations makes the region promising once more, Martos said SES New Skies plans to double the amount of Ku-band capacity it has available over Latin America, while the C-band capacity will nearly triple.
Satellite-fleet operator Star One of Brazil
also is expanding, with two large satellites – Star One C1 and Star One C2 – expected to begin commercial service this year. Mauro Wajnberg, Star One’s chief marketing officer, said the company gradually is migrating to multi
band satellites instead of C-band-only spacecraft.
The Star One C1 satellite launched in November, and the C2 scheduled for launch in mid
April, carry 28 C-band transponders each and 16 and 14 Ku-band transponders, respectively. Each also has one X-band transponder for government communications. Wajnberg said Brazil’s domestic market for satellite communications is relatively strong, and Star One sees major market opportunities in providing backhaul services for cellular telephone networks.
Miguel Angel Redondo, commercial director at Hispasat of Spain, which has made Latin American expansion a key to its growth in recent years, agreed that prices are nudging up, “but only after years during which they were too low.” He said the expected average Latin American economic growth of about
3.1 percent annually over
the next few years
�should provide sufficient demand to justify investment in the region.
Amazonas-2 satellite, with 54 Ku-band and 10 C-band transponders, is scheduled for launch in 2009 or 2010 and will be co-located with Amazonas-1 at 61 degrees west longitude. Hispasat has said that the nearly 90 percent fill rate of the current Amazonas-1 justifies Amazonas-2.
Amazonas-1, launched in 2004, has a small fuel-pressurization leak that will reduce its expected operating life to about 10 years. Redondo said Amazonas-2 should be available by late 2010, giving the company more than enough time to compensate for an early retirement of Amazonas-1.
Redondo said the healthiest satellite markets in Latin America are services to telecommunications networks, two-way broadband services for government-backed projects in rural areas, and regional television broadcasting.
also is reviewing possible new investment in Latin America given the firmer pricing environment, said EstevaoGhizoni, Intelsat’s sales director for Latin America and the Caribbean.
Intelsat has three satellites dedicated to video broadcasts in Latin America, but Ghizoni stressed the opportunities related to cellular network extension. He said Brazil’s Anatel telecommunications regulator has made it mandatory for winners of 3G wireless licenses to provide service in rural regions outside the existing telecommunications grid, a ruling that will benefit satellite providers.
“We can take the burden off of these [network operators] by designing and installing the [rural telecommunications] networks for them,” Ghizoni said. “Some of these areas can only be served by satellite. They will never make money for the cellular operators. By using us, they eliminate the capex [capital expenditure] burden and only pay us according to the number of minutes they use.”