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October 2005 SATMAGAZINE.COM

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Vol. 3 No. 8, October 2005

TABLE OF CONTENTSClick on the title to go

directly to the story

COVER STORYCOVER STORYCOVER STORYCOVER STORYCOVER STORY FEAFEAFEAFEAFEATURESTURETURETURETURE

Broadband internet is nowavailable on someinternational flights and thissegment of the satelliteservices market is showinggreat potential.

REGULAR DEPREGULAR DEPREGULAR DEPREGULAR DEPREGULAR DEPARTMENTARTMENTARTMENTARTMENTARTMENTSSSSS

By Virgil Labrador by Chris Forrester

17 / “In-FlightSatelliteServices TakeOff!

22 / Europe 2006: The Year of High- Def ...

VIEWPOINTVIEWPOINTVIEWPOINTVIEWPOINTVIEWPOINT

Europe’s jigsaw of countriesis rapidly adopting high-definition television, with allof its major markets exceptSpain and Portugal eitherable to receivetransmissions, or withpromised HD services for2006.

26 / Intelsat Acquisi-tion of PanAmSat:Global andRegional Impacts

Futron analyst BernardoSchneiderman looks atthe implications globallyand regionally of therecently announcedpurchase of PanAmSatby Intelsat.

SatMagazine ManagingEditor Virgil Labrador spokewith Mainstream Data CEOScott Calder on how heturned the company aroundand other issues.

32 / Inteview with Mainstrean Data

CEO Scott Calder

Bruce Elbert shares hisimpressions on thesatellite industry coverageof IBC 2005 held inAmsterdam.

29 / Viewing IBC 2005from a SatellitePerspective

by Bruce Elbert

FEAFAETURETURE

EXECUTIVEEXECUTIVEEXECUTIVEEXECUTIVEEXECUTIVESPOTLIGHTSPOTLIGHTSPOTLIGHTSPOTLIGHTSPOTLIGHT

by Bernardo Schneiderman

3 / Notes from the Editor

4 / Calendar of Events

5 / Industry News

12 / Executive Moves

15 / New Products and Services

34 / Vital Statistics presented

35 / Market Intelligence

38 / Advertisers’ Index/Stock Quotes

by Futron Corp.

SATMAGAZINE.COM

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October 2005

Satnews Publishers is the leadingprovider of information on theworldwide satellite industry. Foremore information, go towww.satnews.com

Cover Design by: Simon Payne

Published monthly bySatnews Publishers800 Siesta Way,Sonoma, CA 95476 USAPhone (707) 939-9306Fax (707) 939-9235E-mail: [email protected]: www.satmagazine.com

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Copyright © 2005Satnews PublishersAll rights reserved.

EDITORIALSilvano PaynePublisher

Virgil LabradorManaging Editorand Editor, North America

Chris ForresterEditor, Europe, Middle Eastand Africa

Bernardo SchneidermanEditor, Latin America

Peter GalaceEditor, Asia-Pacific

John Puetz, Bruce ElbertDan Freyer, Howard GreenfieldContributing Writers,The Americas

David Hartshorn, Martin JarroldContributing Writers, Europe

NOTE FROM THE EDITOR

Satellite Companies Pitch in HurricaneRelief Efforts

The satellite industry responded with an outpouring of support in the aftermath of the devastatingHurricanes Katrina and Rita that recently struck theSouthestern part of the United States. Companiesdonated cash, equipment, transponder capacity andservices (see story on page 7 “Satellite Companies Pitch In

Hurricane Katrina Efforts). Many employees of satellitecompanies donated cash and goods as well as their own services in reliefefforts.

While the US Federal Emergency Management Administration (FEMA)took a lot of flack for its handling of the disaster, one of the most obviouseffects of such an emergency of such magnitude is the vulnerability ofterrestial networks. The role of satellite services before and after a naturaldisaster is evident. Testifying last September 22 before a SenateCommerce Commitee investigating the response to the disaster, FederalCommunications Commission (FCC) Chairman Kevin Martin affirmed theimportance of satellite technology. “If we learned anything from HurricaneKatrina, is that we cannot rely solely on terrestial communications. Whenradio towers are knocked down, satellite communications are, in someinstances, the most effective means of communicating,” said ChairmanMartin.

After the tsunami struck late last year in Asia, the role of satellitetechnology also came to the fore in preventing the disaster as well as inrelief efforts. Let’s hope the lessons learned from these recent experienceswill not go unheeded.

We will be covering the role of satellite communications in emergencyoperations and disaster preparedness more in depth in our forthcomingNovember issue. Watch out for that.

Meanwhile, this issue focuses on a hot new application, In-FlightSatellite Services. We also look at the recent Intelsat/PanAmSat mergerand BruceElbert writes about his observations on what’s hot in therecently-concluded IBC 2005 in Amsterdam.

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October 1, Vicenza, ItalySAT EXPO 2005Rosalia D’ApranoTel: + 39 0444 543133 / Email: [email protected]: http://www.satexpo.it/en

October 3-6, Salvador da Bahia, BrazilITU Telecom Americas 2005John JacobsTel: + 41 22 730 5401 / Email: [email protected]: itu.int/AMERICAS2005/index.html

October 4-6, Omaha, Nebraska USAStrategic Space 2005Tel: (719) 576-8000Website: http://www.stratspace.org

October 17-20, Atlantic City, NJMILCOM 2005Steve WalleyTel: 408-213-3000 / Fax: 408-213-3001Website: http://www.milcom.org

October 25-27, Mumbai, IndiaSATELLITE & CABLE TV INDIA TRADE SHOW 2005Mr. Dinyar ContractorTel: + 91 - 22 - 24948280 / 2498 4273Email: [email protected] / Website: www.scatindia.com

October 25, Park Central Hotel, New York, NYGVF Satellite Summit & Annual GeneralAssembly 2005David HartshornEmail: [email protected]

October 26 - 27, New York, NYSATCON - Satellite Applications and ContentDelivery Conference & ExpoMichael DriscollTel: + 203 371 6322 / Email: [email protected]: www.satconexpo.com

Oct. 31 -Nov. 1, Marriot Grand Hotel, Moscow, Russia2nd Russia and CIS Broadband Summitand MITEL 2005 ExhibitionElena PeredelskaiaTel: + 44 (0)20 7596 5205 / 5000Fax: + 44 (0)20 7596 5208 (direct line)Email: [email protected]: http://www.broadband-conference.com ;http://www.ite-exhibitions.com

November 1-4, Houston, TexasOffshore Communications 2005Inger PetersonTel: + 772-221-7720 ext. 112Fax: 772-221-7715Email: [email protected]: www.offshorecoms.com

November 2-4, Beijing New Century Hotel Beijing, ChinaChina Satellite 2005Richard Theodor (Wozniak) KusiolekTel: + 650-428-1872 / Mobile: 650-504-2978Email: [email protected]: www.transglobalnet.com/

November 7-9, London, UKGlobal MilSatCom 2005Tel: + 44 (0) 20 7827Fax: + 44 (0) 20 7827 6001Email: [email protected]: www.globalmilsatcom.com

November 8-11, Melia Hotel Hanoi, Hanoi, VietnamThe 2nd Asian Space ConferenceDavid SooT el: 31-(0)71-527 22 27Fax: + 31-(0)71-527 41 62 /Email: [email protected]: http://www.iias.nl/space

OCTOBER NOVEMBER

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INDUSTRY NEWS

Boeing and Lockheed to ResubmitFiling for United Launch Alliance CHICAGO and BETHESDA, MD — Lockheed Martin Corp. andBoeing Co. announced on Sept. 21 that they have withdrawntheir filing at the Federal Trade Commission (FTC) regarding theformation of the United Launch Alliance, LLC (ULA). The companies said in a news release they intend to resubmittheir filing, pursuant to the Hart-Scott-Rodino Anti-TrustImprovements Act of 1976, later this week. The said they areresubmitting their filing to provide additional time for review ofthe proposed transaction. Upon resubmission, the 30-day clockfor FTC consideration will restart. ULA is a contemplated joint venture to be established byLockheed Martin and Boeing to provide two families of expend-able launch vehicles to U.S. Government customers. Last month in Brussels, the European Commission cleared thecreation of ULA. European Union said the approval was madeunder the EU Merger Regulation, which concluded the proposedtransaction will not significantly impede effective competition inthe European Union. Both Boeing and Lockheed provide space launch services togovernment and commercial customers. Lockheed is active onthe market with its Atlas family of launch vehicles as well as withProton, a launcher produced in a joint venture with Russianpartners. Boeing offers the Delta launch vehicles as well aslaunchers produced by Sea Launch, also a joint venture withRussian partners. Both Boeing and Lockheed also produce andmarket satellites.

Northern Sky: IPTV via Satellite toGenerate $1.6-B in Total RevenuesFrom 2005-2010

CAMBRIDGE, MA — The IPTV viasatellite market accounts for a rela-tively small percentage share of themarket potential that terrestrial-basedplatforms are likely to generate.Although satellite-based total rev-enues from 2005 to 2010 are expectedto exceed $1.6 billion, the marketestimates expected from terrestrial-

based services, as touted by some forecasters, rest in the area of

over $7 billion for the year 2010 alone, concludes a new report byNorthern Sky Research. Nevertheless, NSR said, IPTV does provide a unique andgrowing opportunity for the satellite industry to target. Thegrowing preference for IP that satellite service providers areincorporating in their offerings, and the compelling role ofsatellite services in the video markets worldwide, make IPTV viasatellite services a compelling value proposition for selectregions. “Given the proven broadcast economics of satellites in deliveringcontent cost-effectively to large geographic footprints, particu-larly in underserved areas, growth of IPTV via satellite servicesshould increase at a steady rate,” states Jose del Rosario, senioranalyst of NSR and author of the report. According to NSR’s newest market survey and forecast report onIPTV via Satellite, initial demand is expected to be generatedlargely by entities that are setting up infrastructure to enableIPTV via satellite services. These services mainly requiretransponder lease contracts from satellite operators for thedelivery of content to IPTV gateways. Once the infrastructure isin place, the market is expected to move quickly to retail businessmodels where revenue-sharing arrangements between satellitecompanies and the owners of content will lead to higher marginsas satellite players participate in revenue sharing from thesubscribers’ monthly service fees.

Orbimage Buys Space Imagingfor $58.5M DULLES, Va.— Orbimage Holdings Inc. announced on Sept. 16 ithad entered into a definitive agreement to acquire the assets of

its rival Space Imaging LLC for $58.5million. The combined company will have a keygovernment contract, two satellitesand 14 affiliates and ground stationsaround the world. Subject to govern-ment regulatory approvals and othercustomary closing conditions,Orbimage said it is optimistic that suchconditions will be satisfied in time forthe closing to occur on or beforeDecember 31, 2005. Denver, Colorado-based Space

An artist’s render-ing of ORBIMAGE’splanned OrbView-5satellite. (Imagecourtesy of GeneralDynamics Corpora-tion)

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Imaging is a leading supplier of visual information products andservices derived from space imagery. Space Imaging launched theworld’s first one-meter resolution, commercial Earth imagingsatellite, Ikonos, on Sept. 24, 1999. Space Imaging’s owners, Lockheed Martin Corp. and RaytheonCo., put the company up for sale earlier this year when it failed towin a $500 million contract from National Geospatial-IntelligenceAgency. Instead, the contracts were awarded to Orbimage andDigitalGlobe. Orbimage currently operators OrbView-3 satellite, which iscapable of measuring, mapping and monitoring objects smallerthan automobiles and the OrbView-2 ocean and land multispectralimaging satellite and the SeaStar Fisheries Information Service,which provides maps derived from essential oceanographicinformation to aid in commercial fishing.

The company is currently building a next-generation satellite,OrbView-5, to support the National Geospatial-IntelligenceAgency’s NextView image acquisition program. When OrbView-5is launched in 2007, this next-generation commercial imagingsatellite will acquire up to 700,000 square kilometers of imageryeach day at the unprecedented resolution of 0.41-meters. Space Imaging chief executive officer Robert Dalal said thecombination of Space Imaging and Orbimage will expand andgrow the business. “This match is a winner for all of our custom-ers and employees,” he said.

Arianespace Wins Contract toLaunch Thaicom 5 EVRY, France — Private Thai operator Shin Satellite andArianespace signed on Sept. 6 a launch contract for the Thaicom

http://www.ptc06.org

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5 satellite. The contract was signed at World Satellite Business Week 2005by Dr. Dumrong Kasemset, executive chairman of Shin SatellitePlc, and Jean-Yves Le Gall, chief executive officer ofArianespace. Christine Lagarde, French Minister for ForeignTrade, was present at the signing. Coming less than four weeks after the successful launch ofThaicom 4 (IPSTAR), Arianespace said the contract reflects boththe strategic space partnership between France and Thailandand French government support for the Thai space industry.

Thaicom 5 is slated for an Ariane 5 launch in 2006 from Europe’sSpaceport in Kourou, French Guiana.

It will be the fifth satellite launched by Arianespace for the Thaioperator, following Thaicom 1 in December 1993, Thaicom 2 inOctober 1994, Thaicom 3 in April 1997 and Thaicom 4 (IPSTAR)on August 11, 2005

PanAmSat, JSAT JV Orders Horizons-2 Satellite from Orbital

DULLES, Va.— Horizons-2Satellite, LLC, a 50/50 jointventure between PanAmSatCorp. and JSAT Corp., hasordered one geosynchro-nous (GEO) communica-tions satellite from OrbitalSciences Corp. Based on Orbital’s STARsmall satellite platform, thespacecraft will be calledHorizons-2 and will belaunched into a PanAmSat-licensed orbital slot at 74degrees West Longitude

over the United States. The new order calls for a 22-month on-ground delivery schedule. Financial terms of the contract werenot disclosed. “We are delighted to add JSAT to the list of blue-chip customerswho have adopted the ‘STAR small satellite solution,’ anindustry trend of which PanAmSat has been the leading propo-nent,” said Dr. Ali Atia, head of Orbital’s commercial GEOsatellite business unit. He said the smaller-sized STAR is an ideal

choice for satellite operators that seek an optimal balancebetween satellite capacity and customer demand The new satellite is the fifth that has been ordered through thecompany’s association with PanAmSat, which originally becamea customer in 2001. Prior to the Horizons-2 joint venture orderwith JSAT, PanAmSat had previously purchased from Orbitalthree C-band satellites for U.S. domestic communicationsservices, and a hybrid (C and Ku bands) satellite for internationalservices. Joe Wright, PanAmSat CEO, said the purchase of a new satellitewill double the capacity of the Horizons joint venture. “Thissatellite will provide Ku-band growth capacity in North Americafor PanAmSat in 2007 through the next decade,” he added. The first C-band satellite, Galaxy 12, was launched in 2003 andthe second, Galaxy 14, was launched earlier this month. The lastof the original three-satellite order, Galaxy 15, was recentlyshipped to the launch site in preparation for a launch in Septem-ber. A fourth satellite was ordered earlier this year, the hybridPAS-11, which is currently in the design and manufacturingphase. The Horizons-2 satellite will carry 20 active high-power Ku-bandtransponders. The satellite will generate approximately 3.5kilowatts of payload power and will weigh about 2,300 kg atlaunch.

Satellite Companies Pitch in HurricaneKatrina Relief Efforts In response to the unprecedented damage and disruption causedby Hurricane Katrina on Aug. 29, a number of satellite companieshave stepped up efforts to provide assistance in the relief effortsin the Gulf area. Aside from donating cash, many of them havealso contributed communications infrastructure to aid in a varietyof rescue and recovery missions throughout Louisiana andMississippi. Here is a rundown of some companies contributing to the reliefefforts:

• One of the first companies to extend assistance isNorthrop Grumman Corp. which contributed an initial $2million for relief assistance as early as two days after thehurricane struck. Northrop has since directed assistance toemployees impacted by Hurricane Katrina through the newNorthrop Grumman Employee Disaster Relief Fund, estab-

Artist’s concept of Orbital’sStar geostationary communi-cations satellite of which theHorizons-2 satellite will bebased. (Orbital SciencesCorp. photo

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lished by The Northrop Grumman Foundation. Northrop alsopledge to match, dollar for dollar, employee contributions tothe fund.

• Boeing Company donated on Sept. 1 $1 million to theAmerican Red Cross for Hurricane Katrina relief efforts andsaid it will match employee and retiree contributions to thatorganization through the company’sEmployees Community Fund. To-wards the end of the month, BoeingCo. said its projected corporate andemployee/retiree total contribution toKatrina victims has reached approxi-mately $7.3 million.

• News Corp. also pledged $1million to the Salvation Army tosupport its relief efforts. NewsCorporation added it will match –dollar-for-dollar – contributions madeby the company’s employees toaccredited charities to a total of $1million.

• SES Americom and AmericomGovernment Services (AGS) who areboth providing urgently neededcommunications links for reliefworkers and tent cities. SES Americomsaid AGS is providing free satellitecommunications through portableantennas, satellite bandwidth, andsystems that enable voice and datacommunications. AGS said itssystems and services have linkedrescue teams with each other and theircommand centers, provided Internetconnectivity, plus voice and datachannels, to field hospitals andstreamlined communications to reliefand rescue workers on the ground, inthe air and on the water.

• PanAmSat said last week it isdonating satellite capacity to aid in avariety of rescue and recoverymissions. The company has alreadygiven the American Red Cross sixmonths of free capacity for communi-cation purposes and is working with

the Army Core of Engineers, the South Carolina NationalGuard and FEMA to provide much needed connectivity.

• GlobeCast donated the use of its vast network of fiberand satellite transmission services to support the worldwidetelecast of “Shelter from the Storm: A Concert for the GulfCoast,” last Friday, September 9, with a live first feed at 8:00

http://www.comtechefdata.com

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ET (0000 - 0115 GMT)and a repeat feed 8:00PM PT (GMT 0300 -0415). In a coopera-tive and collaborativeeffort, six US broad-cast networkspresented thecommercial-freesimulcast as anappeal to raise fundsfor those affected bythe devastatingeffects of HurricaneKatrina.

• Eagle Broadband said it has provided its SatMAX non-line-of-sight, satellite communications technology at no costto the U.S. Army enabling satellite-based voice and datacommunications to facilitate rescue, relief and recoveryefforts for victims of hurricane Katrina. Eagle Broadbandsaid it provided its suitcase-sized, portable SatMAXtechnology to the U.S. Army enabling their disaster re-sponse teams to establish and maintain vital, Iridiumsatellite-based voice and data communications in any non-line-of-sight environment such as within buildings, com-mand centers or other locations where outdoor use is notpossible or practical. The company has also offered to sendadditional SatMAX units to other federal, state and localcivilian government and military agencies as well.

• EMS Technologies Inc. also supplied communicationshardware to support restoring communications. Three of thecompany’s divisions, EMS Satcom, EMS Satellite Networksand EMS Wireless, have responded with either mobilesatellite communications equipment or with wireless infra-structure equipment to restore cell phone coverage in thestricken areas.

• On Sept. 7, XM Satellite Radio launched “Red CrossRadio,” a station developed in cooperation with the Ameri-can Red Cross designed to provide help and information forHurricane Katrina victims, Red Cross staff and volunteersalong the Gulf Coast and other Red Cross workers across thecountry. Red Cross Radio (XM Channel 248) is now airingregular updates on relief efforts in the Gulf Coast, as well assites where victims have been relocated to receive Red Crossassistance. Listeners can find out how to receive help andhow to contribute to the relief efforts. XM is said it isdonating radios to the Red Cross for relief workers, shelters

and aid stations. XM Satellite said it will also air a series oflive concerts and benefits organized by various organiza-tions to raise money for Hurricane Katrina relief efforts.

• Stratos Global Corp. is also teaming with its partner,Inmarsat, to provide free-of-charge satellite-based communi-cations services to allow victims of Hurricane Katrina andrelief workers providing assistance in the area to contactfamily and loved ones. Stratos said it will deploy a mobilecommunications headquarters equipped with Inmarsat GAN(Global Areas Network) and mini-M mobile satellite terminalsto areas impacted by the storm, and to the staging areaswhere relief workers are concentrated. The GAN and mini-Mterminals will allow victims and workers in the area to callfamily and loved ones at no cost and regardless of the statusof the local telephone infrastructure. The GAN system willalso provide Internet, data, video and fax services to supportrelief efforts.

• SBC Communications Inc. announced on Sept. 9 it isdeploying technicians and equipment to assist in rebuildingthe telecommunications infrastructure in Louisiana, Missis-sippi and Alabama that was shattered by Hurricane Katrina.In response to requests from BellSouth, SBC companies willinitially deploy up to 140 technicians from across the nationto assist in the recovery effort. Additional technicians will beprovided on an as-needed basis. The team is workingthrough logistical issues, such as transportation, housingand medical immunizations, and is expected to begin worknext week and continue to be available through mid-December.

• Tachyon Networks has also joined in the HurricaneKatrina relief effort and is donating satellite broadbandequipment and services to the Naval PostgraduateSchool. The donation is seen as critical because of the needto enhance ground communications between shore-basedrelief personnel and field agents throughout the Gulf Coast.The joint effort, Tachyon said, clearly demonstrates hownon-government organizations can help the military providehumanitarian relief.

• Global Relief Technologies (GRT) and Telenor SatelliteServices have also joined forces to provide rapid datamanagement collection capabilities and mobile satellitecommunications to elements of the 2nd United States MarineExpeditionary Force (II MEF) and the Federal EmergencyManagement Agency (FEMA) that are currently assistingvictims of Hurricane Katrina.

Northrop Grumman employeesorganize and participate in “Opera-tion Freedom Relief” in Pascagoula,Miss., where those in need receivedfood, water, supplies and otherdonated relief items. (NorthropGrumman photo)

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· Hispasat satellitesare also contributing tothe disaster recovery inNew Orleans, providingemergency communica-tions. Hispasat saidusing the AmazonasSatellite high powerNorth America beam,emergency communica-tions links have beenestablished from theaffected area, using asmall transportableantenna. A bidirectionallink has been inoperation since lastweek, reconnecting theNew Orleans with theoutside world.

· GeoWireless, a wireless-anywhere provider, has also teamedwith Vivato, Inc., a provider of extended-range Wi-Fi solutions, todispatch mobile communications systems to the Mississippi Gulfcoast and surrounding areas to provide Hurricane Katrina reliefassistance.

Space Station Photos ShowKatrina’s Impact. NASA’sMichoud Test Facility in NewOrleans is located at right centerof this image taken from theInternational Space Station onSeptember 8. While the facilityitself is largely dry, the adjacentneighborhoods are extensivelyflooded. (NASA photo)

Telesat’s Anik F1R Satellite Launched

BAIKONUR COSMODROME, Kazakhstan — A Russian-builtProton Breeze M launch vehicle successfully placed Anik F1Rsatellite into orbit on Sept. 9 for Telesat, Canada’s leadingsatellite operator. The Proton vehicle lifted off from the Baikonur Cosmodrome at3:53 a.m. local time (5:53 p.m. Thursday EDT, 21:53 GMT). Thethree-stage Proton booster flew for approximately 10 minutesbefore separating from the Breeze M upper stage. The Breeze Mthen fired its on-board engine five times over the next nine hoursto place the satellite into a geosynchronous transfer orbit. AnikF1R, an EADS Astrium-built E3000 model, will be maneuveredover the next few weeks into its final orbit 36,000 km above theequator. From its operating position of 107.3 degrees West longitude,Anik F1R will deliver broadcasting, communications and airnavigation services in Canada and the United States, on behalf ofTelesat. “Anik” is an Inuit word meaning “little brother.” “Anik F1R is the latest in a long line of Telesat satellites to

An early morningliftoff for Telesat’sAnik F1R satellitefrom BaikonurCosmodrome inKazakhstan.

pioneer critical services that benefitmillions of people across NorthAmerica every day,” said LarryBoisvert, Telesat’s president andCEO. The launch of the new Anik F1Rsatellite was the sixth mission of theyear for International Launch Services(ILS), a joint venture of Proton builderKhrunichev State Research andProduction Space Center, andLockheed Martin (NYSE: LMT),builder of the Atlas launcher. EADS Astrium designed and built thespacecraft and supplied both thepayloads and the platform. Canadiancompanies EMS Technologies andCOM DEV also supplied a significant part of the spacecraftequipment and technology.

SM

Canada’s Federal Cabinet AffirmsSatellite Radio in Canada WASHINGTON — Canada’s Federal Cabinet upheld on Sept. 9 adecision by the federal broadcast regulator to grant two licensesfor the launch of satellite radio services in Canada. Sirius Canada and the Canadian Satellite Radio said they aredelighted with government’s confirmation of Canadian Radio-Television and Telecommunications Commission (CRTC) satelliteradio decision in June adding they will bring subscriptionsatellite radio service to market in Canada shortly Kevin Shea, president and CEO of Sirius Canada said SiriusCanada is delighted that cabinet has confirmed the CRTC’sdecision and we look forward to bringing satellite radio service toCanadians as quickly as possible. “Having listened and re-sponded to the concerns expressed over the recent weeks, we areconfident that will be bringing a stronger product to market, aproduct that meets the unique needs of Canadian listeners, andartists,” he added. CRTC had approved applications on June 16 from the twocompanies. The two groups have partnered with the two biggestU.S. satellite-radio companies to launch subscription-baseddigital radio services in Canada.

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Howard Chambers Named VicePresident/GM of Boeing Space &Intelligence Systems ST. LOUIS — Boeing has named Howard E. Chambers vicepresident and general manager of Space & Intelligence Systems(S&IS), an operating division of Integrated Defense Systems(IDS). Chambers reports to Jim Albaugh, president and chiefexecutive officer of Boeing’s Integrated Defense Systems. Chambers is responsible for leading the people, programs andassets of the company’s intelligence and space programs. Theseinclude Boeing’s Satellite Development Center, InformationSystems, Mission Systems and critical elements of the FutureImagery Architecture program. He also is Chief Executive Officerof Boeing Satellite Systems International, Inc.

Chambers has served since August as an interim leader of S&IS.Previously, he was vice president of Program Management andIndependent Review for IDS, where he was responsible for thedevelopment and deployment of program management bestpractices, providing training and development for programmanagers and performing independent assessments of criticalIDS programs. Before that, he served as VP/GM of the Airlift andTanker Programs business unit and the C-17 Globemaster IIITransport Program. Chambers joined Rockwell International in 1969 after service inthe U.S. Air Force. At Rockwell he served in senior managementpositions in test, logistics, business development and programmanagement.

http://www.miteq.com

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EXECUTIVE MOVES

Intelsat General Names RichardDalbello Vice President ofGovernment Relations

BETHESDA, Md. — Intelsat GeneralCorp. (IGC) has chosen RichardDalBello as vice president of govern-ment relations. DalBello will beresponsible for informing and educat-ing policy and decision makers infederal, state, local and other govern-ment-related organizations. With more than 20 years of experience,DalBello is well known in satellitecommunications and governmentcircles. He served previously as

president of the Satellite Broadcasting and CommunicationsAssociation, and for more than three years as the president ofthe Satellite Industry Association, the voice of the U.S. commer-cial satellite industry on policy, regulatory and legislative matters. Earlier, DalBello was general counsel for Spotcast Communica-tions Inc., and vice president of government affairs, NorthAmerica, for ICO Global Communications, a provider of mobilesatellite communications services. He also served as assistantdirector for aeronautics and space in the White House Office ofScience and Technology Policy (OSTP), and drove increasingcompetition in the international satellite industry and commercialuse of the satellite Global Positioning System (GPS). DalBello started his career in Washington in the Office ofTechnology Assessment for the U.S. Congress. Later he wasdirector of commercial communications at NASA where he wasresponsible for private sector experiments on the ACTS (Ad-vanced Communications Technology Satellite) program, whichpaved the way for the expanded use of Ka-band satellite frequen-cies. He was also director of the office of space commercializationfor the Department of Commerce.

Mobile Satellite Ventures AppointsFaris as Chief Operating Officer;Ali Asghar as VP of CorporateDevelopment

RESTON, Va. — Mobile Satellite Ventures (MSV) has hired MarkFaris, a thirty-year veteran network operator, as chief operating

officer responsible for the design, development, procurement,deployment and operation of MSV’s nationwide integratedsatellite and terrestrial network. Faris has extensive experience in wireless operations andmanagement at SBC and its wireless holdings. Faris is experi-enced in both wireless and Internet protocol technology, drivingsystem architecture and deployment from the start-up phasethrough system maturation. Faris holds a Bachelor of Science in Business Administrationfrom Texas Tech University and attended Yale University’sExecutive Management Program.

MSV has also appointed Ali Asghar as vice president of Corpo-rate Development.

Asghar joins MSV from America Online where he led theiralternative broadband development. Previously, Asghar was withMorgan Stanley, McKinsey & Company, and E.M. WarburgPincus in their technology venture capital group.

International DatacastingAppoints New CFO

OTTAWA — International DatacastingCorp. has appointed Susan RobbinsParsons as its new chief financial officerand corporate secretary. Robbins Parsons has many years ofexperience in corporate senior manage-ment—most recently serving as vicepresident of finance and corporateservices with Kinaxis Corp. headquarteredin Kanata, Ontario. She is proficient with

both US and Canadian GAAP and holds an MBA from DalhousieUniversity. Robbins Parsons was also named one of the OttawaBusiness Journal’s prestigious “Top Forty under Forty” in 2004. Robbins Parsons will replace Marc Santerre who has decided toleave IDC to join a startup company in Quebec

FoxcomAppoints Miles G. Thomas,Western Regional Sales Director, USA

Foxcom announced the appointment of Miles G. Thomas to theposition of US Western Regional Sales Director for Sat Light

Richard DalBello

Susan RobbinsParsons

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products. Miles began his satellite career at Globecast whenthey were known as IDB Communications.

Miles served as the Director of Audio Services and then Directorof New Business and Sales for Globecast. He later joinedVerestar, Inc. (now SES-Americom) as International AccountsManager where he sold international services utilizing satellitetransmission and fiber optic networks for corporate privatenetworks, VOIP, and U. S. government services.

Vista Names Jason Land VPof Global Services

HOLLYWOOD, Fla. — Vista Satellite Communications Inc. haschosen Jason Land as vice president of global services. Land hasmore than 10 years’ experience in global satellite communications,technical coordination and broadcast television production. He comes to Vista from Strategic Television Inc. in Thousand

Oaks, California, where he served for fiveyears, most recently as vice president ofoperations. He was in charge of televi-sion transmission of live sports, enter-tainment and corporate events world-wide. These included the AcademyAwards, Golden Globe Awards, champi-onship boxing events, and for companiessuch as Symantec, Allergan and theMayo Clinic.

Earlier, Land spent more than five years with PanAmSat Corp. inGreenwich, Connecticut. As senior manager of special events, hefacilitated broadcasts of the Olympic Games, Millennium Eve, andWorld Cup Soccer. Land earned a bachelor of science degree in broadcast communi-cations from Florida International University in Miami and wasawarded a National Academy of Television Arts and Sciences(NATAS) Scholarship.

Jason Land

SM

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NEW PRODUCTS

Swe-Dish Launches New Suitcase STOCKHOLM — Swe-DishSatellite Systems has an-nounced its Suitcase has beenupgraded with a 35W amplifierfrom previous 25W giving thesatellite terminal increasedperformance and efficiencyduring transmission.

The company said with the new amplifier, the user will benefitfrom 30% increased bandwidth enabling the Suitcase to closelinks to exceed 5 Mbps. According to Swe-Dish, the upgrade will mean an increase in thenumber of possible applications that demand higher bandwidth,such as live broadcast. It will also give the user better linkmargins and, therefore, higher reliability in case of harsh environ-mental conditions.

Lars Jehrlander, CEO of Swe-Dish, said the increased power hasbeen achieved without increasing the Suitcase weight, size orprime power consumption.

MCL Offers 750W DBS-Band TWTA

MCL introduces anotherindustry first – the MT4400weather-resistant, antennamount TWT amplifier is nowavailable for DBS-Bandapplications at 750 and 500watts. In addition, the MT4400is available for C, X or Ku-Band applications at 750 watts.Tri-Band is available uponrequest.

Some of the MT4400’s features include advanced thermal design,rugged construction for extreme environments, optional hand-held controller for complete local monitoring and control, primepower interfaces to a wide variety of voltages and frequencies,field replaceable modules for unsurpassed serviceability, andmuch more. There are also a number of amplifier options,including a block upconverter, linearizer and fiber optic L-Bandinterface, as well as a number of redundant system configura-tions available.

Comtech EF Data Awarded Patentfor Selectively Accelerating NetworkCommunications TEMPE, Arizona — Comtech EF Data Corp., a subsidiary ofComtech Telecommunications Corp., announced on Sept. 16 theaward of a U.S. patent number for its “Method and apparatus forselectively accelerating network communications.” Integral to Comtech EF Data’s turboIP and turboVR line of TCP/IP performance enhancement proxies, Comtech said this technol-ogy provides improved operation of network communicationsthrough distressed communication channels with long latencyand high bit error rate, such as satellite communications links.Comtech said the “Selective Acceleration” feature in the turboIPand turboVR enables a mechanism of selectively accelerating orbypassing TCP/IP sessions based on user-specified parameters. In addition, it provides a method of Quality of Service (QoS) forInternet Protocol datagrams that are received on the local areanetwork (LAN) interface and forwarded to the wide area network(WAN) interface, Comtech claims. Policies can be established to filter and process traffic based onspecific characteristics, including particular addresses or classesof devices. Thus, prioritization can be assigned that establishestraffic precedence, Comtech said.

Loral Skynet Completes WorldwideDeployment of SkyReach BEDMINSTER, N.J. — Loral Skynet announced on Sept. 12 thatit has reached an agreement with Telekom Austria that wouldcomplete the full initial infrastructure rollout of SkyReach IP-enabled communications services. Under the agreement, Loral Skynet will install an iDirect IP hub atTelekom Austria’s state-of-the-art Aflenz teleport, expandingSkyReach’s coverage area across Europe, the Middle East andAfrica. SkyReach customers across the region will have access toregional and global private networking and public Internetservices, including broadband WAN extension for terrestrialproviders, Internet access for ISPs, voice over IP (VoIP) andmanaged data services.

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NEW PRODUCTS

Loral Skynet’s new European-based SkyReach hub will also allowfor multiple points of connectivity through satellites spanningfrom Europe to Asia and through terrestrial facilities. Skynet willcombine satellite capacity on its own Telstar 12 and Telstar 10satellites, with other regional satellites to establish a robust, far-reaching IP-based network. SkyReach’s service in Europe isavailable today using other teleport facility partnerships. Full service on Skynet’s hub at Telekom Austria’s Aflenz teleportwill be available by December 2005, Loral said

Glowlink Rolls-Out WebAccess forModel 1000 Spectrum MonitoringSystem BANGALORE — Glowlink has announced the product roll-out

of its WebAccess at the Satellite User Interference ReductionGroup (SUIRG) annual meeting held in Bangalore, India fromSeptember 20 to 22, 2005. The WebAccess uses the latest Internet browser technology toprovide a web-based access overlay to the Glowlink Model 1000satellite spectrum monitoring system user interface. WithWebAccess, users can access the Model 1000 and all its keyfeatures from anywhere where a web browser is available, in ahighly secure and managed way. This access is device-neutral and geography-independent.

Model 1000 is a state-of-the-art, Digital Signal Processing(DSP) based spectrum monitoring system. Using powerful,proven digital signal processing technologies, Model 1000provides better performance, functions, and reliability than thetraditional swept-frequency spectrum analyzers, according to

http://www.arabsat.com

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NEW PRODUCTSGlowlink. Jeffrey C. Chu, president and CEO of Glowlink, said that withWebAccess, satellite operators and their customers can now lookat the same spectral displays while trouble-shooting problems.

MMT Unveils the World’s SmallestGPS Receiver

LONG BEACH, Calif. ̄ MMT announced on Sept. 14 theavailability of its MN1010 Module, which it claims to be theworld’s smallest complete global positioning system (GPS)receiver. The ultra small design is packaged into a 10x10x1.8mm, RFshielded 36 pin package. This module is a low power, highperformance GPS Receiver solution designed for portableconsumer electronic applications. It draws less than 75mWmaking it an ideal solution for battery operated, PDA and wirelessapplications devices. It is a complete 12 channel GPS receiver

that only requires power and an antenna to operate. The 12channel receiver allows all satellites in view to be tracked,providing a solution to minimize position jumps caused byindividual satellite blockage. The GPS chipset integrated into the MN1010 is from u-Navmicroelectronics and features the uN1008 CMOS RF Front-Endand the highly integrated uN8130 Base-band Processor. Thischipset provides a low power, high performance cost competitivesolution. The MN1010 is supported by an evaluation kit which includessoftware and references designs to reduce time and cost for theOEM development. Samples are currently available with fullproduction quantities scheduled for October 2005.

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http://eccincorp.com

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COVER STORY

by Virgil Labrador

On May 17, 2004 passengers onLufthansa flight 452 fromMunich to Los Angeles were in

for a unique treat—they were on the firstcommercial flight to provide broadbandinternet services through the wonders ofsatellite technology. After more thanthree years of initial star-up, developmentand testing, Connexion by Boeing wasfinally launching its airborne, wi-fi –based,high-speed internet service on a commer-cial airline—the first company to do so.Despite the usual anxieties for such animportant launch—everything went verysmoothly. U.S. television journalist KurtKnutsson, known for his news features as“Kurt the Cyber Guy,” became the firstjournalist to conduct a live webcast fromflight. As flight 452 soared 36,000 feetover Greenland, Knutsson interacted witha TV anchor team in Los Angeles duringthe live broadcast of KTLA’s morningnews show. He also did live, in-flightreports for stations in Chicago andSeattle.

There were other journalists onboard, and journalists being a ratherdemanding audience, generally wereecstatic about the new service. Althoughone or two wrote in their subsequentreports that the connection sometimesbecame erratic and did not really match upto the promised DSL-like speeds.

Here we are almost 18 months laterand Connexion by Boeing is still the onlycompany providing broadband internetaccess on commercial airlines. Connexionby Boeing has signed up so far 11 airlinesnamely: Lufthansa, Japan Airlines,Singapore Airlines, Korean Air, All NiponAirways (ANA), Asiana, China Airlines,Austrian Airlines, SAS, El Al and Etihad.According to Boeing, they are currently

on 84 aircraft (both Boeing and Airbus)and 130 flight routes a day. Connexion byBoeing said that actual usage figures arestill not available given that their custom-ers normally report after a year of serviceand most of them have not bee in servicefor more than year yet. However, TimVinopal, Director of Service Delivery forConnexion by Boeing, said that “it’sdefinitely growing, the more people hearabout it, the more new users we’re getting.We get a lot of repeat users—oncesomeone uses it, they keep coming back.”

I tried the Connexion by Boeingservice myself incognito on a flight fromLos Angeles to Frankfurt. They werehaving a special promotional price on thatflight of $14.95 for the whole 11 hour flight

due to “network maintenance” work theyhad to perform (the normal price for along-haul flight is $29.95). However, Imust say, despite the maintenance work,my connection didn’t skip a beat. Iuploaded several large files as I managetwo websites and it went smoothly. Theonly problem I had was that I used up twobatteries of my laptop in 3 ½ hours anddidn’t get my full money’s worth for thewhole 11 hour flight that I paid for.

Since the launch last year,Connexion by Boeing has added livesatellite TV to its bouquet of services andis looking to go into in-flight mobiletelephony as well. Boeing recentlyintroduced on Singapore Airlines flightslive satellite TV from the BBC, CNBC,

In-Flight Satellite Services Take Off!

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COVER STORY

Eurosports News and MSNBC (viewedfrom the passengers’ laptop). Connexionby Boeing teamed up with wirelesstechnology company Qualcomm andsuccessfully tested and demonstrated anin-flight wireless telephony solution lastmonth on their specially equipped Boeing737-400 aircraft, Connexion One.

The only thing holding up theintroduction of mobile phones into aircraftin the U.S. is the Federal CommunicationsCommission (FCC) which has postponeddecision on the matter pending morehearings to get the public’s view on thematter (which seems to be mostly nega-tive). However, the argument againstmobile phone use on airlines might bemoot, since anyone with wireless internetconnection can make internet calls ontheir laptops through such providers as

SKYPE.

Market Size

It doesn’t take much insight to seethat there is great potential for broadbandsatellite services in the sky, especiallywhen demand on the ground has beenrather flat due to the downturn that thesatellite industry has been experiencingfor the past few years. According to theInternational Air Transport Association(IATA), airline passenger traffic has beengrowing an average of 7 per cent yearly inthe last decade and will continue to growan average of 6.6 per cent annually to theend of this decade. To give you an idea ofthe size of the airline market, over 1.5billion passengers flew commercial flightslast year.

The size of the actual market for in-flight satellite services varies dependingon the source. But the average estimatehovers around $ 1.5 to 2 Billion per year.OnAir estimates the total market for in-flight satellite services to reach $1.6 Billionin 2010, of which $1.2 Billion will comefrom mobile telephony and $400 millionfrom wireless internet access. Of the totalestimated market globally for in-flightsatellite services, almost half will comefrom the U.S. domestic market.

One notable fact is that Lufthansadid a survey of the users of the Connexionby Boeing service after a year and foundthat 85 percent of the respondentsindicated the availability of high speedinternet access would have an impact ontheir future choice of airlines.

In-Flight Satellite Services: How It Works

Courtesy of Connexion by Boeing

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COVER STORY

The market is certainly there for in-flight broadband access. As JimmySchaeffler, Chairman and Senior ResearchAnalys of the think tank The CarmelGroup says: “We’ve become an anything toanybody, anytime society . Right nowthey are finding ways to get audio andvideo and internet into the car, they’refinding ways to bring it to people inmobile environments on the street or evenriding a bike, so it’s a logical transition toget it to millions of people who flyannually, especially frequent flyers.”

Increasing Competition

Before Connexion by Boeing’ssuccessful foray into the in-flight broad-band arena, U.S. budget carrier JetBluehas been providing for free 36 channels oflive satellite TV from DirecTV on all it’sdomestic flights in the U.S. since 2000.Jet Blue has since expanded their channelline-up to include a premium tier ofchannels for an added fee. It has alsobought the company in 2002 that de-signed it’s in-flight entertainment system,LiveTV , which like Connexion by Boeingis entering into service agreements withother airlines to use it’s system.

LiveTV has so far agreements withU.S. carriers Frontier Airlines and AirTranAirways, Canada’s West Jet andAustralia’s Virgin Blue. Apart fromDirecTV programming, LiveTV’s systemcan provide up to 100 channels of XMSatellite Radio, wireless aircraft data linkservices, digital servers for storedcontent, and cabin surveillance systemsfor commercial aircraft. However, it stilldoesn’t not offer broadband wirelessinternet access, at least not yet.

Echostar Communications has alsoentered the fray with the launch in 2003 ofit’s DISH network service on Songairlines, the budget carrier subsidiary ofDelta airlines. It has since expanded it’schannel line-up to include Sirius Satellite

Radio channels.

United Airlines Corp. (UAL) andVerizon Communications received FCCapproval in June for an in-flight wirelessinternet service suing ground-basedcellular technology. Service is expected tostart on UAL by the end of 2006.

Another star-up company calledAirTv announced last year a deal withArianespace to launch a satellite dedi-cated to providing in-flight broadbandand entertainment services. AiTV’swebsite said that they are looking forother funding for their venture with a 50/50 debt to equity ratio, contingent on theirraising the 50 percent of the equityportion. However, nothing has been heardsince this venture and calls to the NewYork office posted on the website were

not immediately returned.

Perhaps the most direct challenge toConnexion by Boeing will come from acompany of whom one of the majorinvestors is its parent company Boeing’smain competitor in the aircraft manufactur-ing business—Airbus. OnAir is a joint-venture between Airbus and one of theleading air transport applications and ITproviders, SITA Inc. OnAir also mergedwith Connexion by Boeing’s erstwhilecompetitor, Seattle-based Tenzing Commu-nications, which previously introduced in-flight e-mail services on some airlines.

Switzerland-based OnAir wasincorporated in February 2005 and hopesto introduce GSM-based mobile telephonysystems on commercial aircraft in thesecond half of 2006 and broadband

Service Availabilty (as of September 2005)

Coming Soon (service agreements signed):

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internet by 2007. Like in the US, however,mobile telephony on commercial flights isfacing regulatory scrutiny, but OnAir CEOGeorge Cooper says that they are happy

with progress with the theyare making with the Europeanbody regulating in-flightcommunications, the Centerfor Post and Telecommunica-tion Administrations whichgoes by their French initialsCEPT and they are veryconfident that mobile tele-phony will be allowed by theCEPT before their projectedlaunch date of mid-2006.

Although Boeing saidthat it is not their policy to

comment about theircompetition, itapparent that they have had a bigheadstart in the market and are slowlygaining critical mass among major interna-

tional airlines. Meanwhile, their successwith their in-flight service has led them toforay into other markets such as businessjets and also the maritime industry withthe signing of a contract lat June withTeekay Shipping to put its service on 50of its vessels.

ConclusionIn-flight satellite services is cer-

tainly showing tremendous potential andnot just a flash in the pan “killer app.” It’sgood for both the consumer as well as thesatellite industry as well as serviceproviders such as Connexion by Boeingand the others are using badly needtransponder capacity on various satellitesas well as ground services from third-

http://www.ilc.com/satellite.html

http://www.ilc.com/landingpages/satmag052505.html

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L-3 AD

COVER STORY

The historic launch of Connexionby Boeing Service on board aLufthansa flight from Munich toLos Angeles, May 17, 2004. (Photocourtesy of Connexion by Boeing)

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party providers.

“I think it’s a good strategy thatthey are pursuing, it’s just a matter ofdoing it until you can line up all of the keyelements which you need for success,which include a good technology; a goodcontent and good marketing and pricedright to the consumer,” said Schaeffer ofThe Carmel Group. He expects that allflights should have broadband access inless than 10 years.

Indeed, if there are any criticismsout there for broadband internet serviceon airlines, it’s the price. Connexion byBoeing cost $29.95 for long-haul flights ofover six hours and 14.95 for flights of 3hours (they also have a minimum $7.95charge for flights of 3 hours and $9.95 forflights more than 3 hours for the first 30minutes and 25 cents per minute thereaf-ter. LiveTV’s service on Frontier Airlinescost $5.00 per flight as opposed to it beingfree on JetBlue. “ I think the ultimatemodel is that it should be built-in with theprice of the ticket, a la Jet Blue. Even itmeans using it as a loss leader to get morepassengers traffic,” says Schaeffer.

I’m certain airline passengers will behappy if that happens.

Virgil Labrador is managing editor of SatMagazine and theindustry web portal, Satnews (www.satnews.com). He is co-author of the first book on the history of the satellite industry,Heavens Fill With Commerce. He has over 15 years experiencein the satellite industry, most recently as marketing director ofthe full service teleport, Asia Broadcast Center in Singapore. He holdsmaster’s degree in communications management from the University ofSouthern California’s Annenberg School for Communication. He can bereached at [email protected]

http://www.lnr.com

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FEATURE

Europe 2006: The Year of High-Def….By Chris Forrester

Europe’s jigsaw of countries israpidly adopting high-definitiontelevision, with all of its major

markets except Spain and Portugal eitherable to receive transmissions, or withpromised HD services for 2006. All theEuropean operators are using the MPEG4standard, combined with DVB-S2 satellitetransmission, and many of them areplanning to build their systems withStatistical Multiplexing of the signals, ofwhich more in a moment.

Sky Italia’s CEO Tom Mockridge isthe latest to throw his hat into the HD-ring, confirming his News Corp-ownedItalian pay-TV platform will launch a rangeof high-def services next year. This meansthat HDTV services are now guaranteedfor Germany, Austria, all of the Scandina-vian and Nordic markets, France, UK andIreland, and now Italy. “From the middle ofnext year, Sky Italia will use Eutelsat’s HotBird capacity to launch High DefinitionTV, a further revolution in the digital TVlandscape,” said Mockridge. As at June 30Sky Italy had 3.3m subscribing homes.The “middle of next year” date gives SkyItalia plenty of time to ready its coverageof the 2006-7 soccer season in high-def.

Incidentally, Sky Italia’s announce-ment also helps explain Eutelsat’s spec-tacular transponder order, mentioned byGiuliano Berretta at the recentEuroConsult conference in Paris. Berrettatalked of a •1bn increase in Eutelsat’sbacklog, Sky Italia has contracted, saysEutelsat, to new leases for 10 transpon-ders, plus an “ongoing renewal” to its 16exiting leases. Berretta, in Paris, specifi-cally referred to a 26-year deal, although aSeptember 15 press statement trimmed thisback to just 20 years. Assuming around

•2m a year of transponder rental (atdiscounted Hot Bird rates), and a freshcontract for 20-years of rental spread overa total of 26 transponders, the end result is•1.04bn. That’s not such a bad return oninvestment of (more or less) one satellite,and certainly justifies Berretta’s claim inboosting Eutelsat’s backlog.

Italy’s HD news is also good forEutelsat, and takes the platform one steponward to a wider high-def offering. It stillleaves Eutelsat well behind arch-rival SESAstra in this wholly artificial ‘HD Race’,but Astra’s tally now includes both payand commercial channels for Germany,

France, Scandinavia and theUK all committed. Eutelsatalso has expectations of aservice from TPS in France.

Eutelsat’s onlyremaining HD contract ofany note can be expected tocome from Italian statebroadcaster RAI, while SESAstra can win considerablefurther HD business frommost of Europe’s publicbroadcasters, not least theBBC and other UK networkchannels, France Televi-sions as well as other pay-TV channels coming out ofFrance, and the biggestpotential prize of all beingGermany, and its cluster ofpublicly-funded andcommercial channels. RTL,for example, is known to beconsidering a HD responseto those already announcedby commercial rival Pro7/SAT1.

Freesat vs FreesatHowever, the UK’s satellite picture

is getting more confused by the day.Indeed, would-be satellite viewers inBritain are about to be faced with asecond ‘Freesat’ offering. The currentposition is that BSkyB has a freesatoffering, whereby viewers can buy a fully-functioning Sky digital set-top box, plusinstallation, and yet without any obliga-tion to subscribe, for about £150 (some$270). The precise figure can vary fromhome to home dependent on the complex-ity of dish rigging and installation. Skyhas been marketing this as ‘Freesat from

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FEATURE

Sky’ since October 2004.

Then, on September 7 publicbroadcaster BBC and UK commercialnetwork ITV confirmed their own much-rumoured plans for a freesat-brandedservice “in 2006”. Charles Allen, CEO ofITV expanded on the plans last week at aBroadcasting Press Guild lunch, when hesaid that ITV would shortly cease encryp-tion of its services and start transmittingin-the-clear on satellite. The BBC isalready unencrypted (since 2003), andmakes considerable use of Astra 2D andits tightly focussed beam to the BritishIsles.

Quite how Hollywood will react to

with BSkyB.

According to Charles Allen, theBBC/ITV version of Freesat fills in theterrestrial gaps that ‘Freeview’, the UK’sdigital terrestrial service, will never be ableto reach. These might number some 25%of the viewing population. It is hoped thatFreesat will be up and running in the first

ITV’s showing ‘in the clear’ of LA’ movieoutput over much of Europe is not yetknown. Freesat (from the BBC), which theBBC admits is a “working title name forthe proposed service”, will operatewithout Britain’s two other main networkbroadcasters, Channels 4 and Five,because both are currently locked intotransmission – and encryption - contracts


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FEATURE

half of next year, said the BBC. He said:“We want our channels to be available toas many people as possible, regardless oftechnological and geographical con-straints. As we move from analogue to adigital environment, Freesat - andFreeview - will enable every family in theUK to enjoy a wide range of qualitychannels for free.” BBC Director-generalMark Thompson said: “We welcome ITVas partners in the project to develop aconsumer-friendly, subscription-freesatellite proposition. “This is great newsfor viewers. It paves the way to providesubscription-free digital television acrossthe whole country.”

According to regulator Ofcom,BSkyB has a market share of 47.2% ofdigital homes (as at the end of August),with a further 3.1% watching some form of‘freesat’, that is they have either bought afree-to-air system, or have churned out ofSky’s pay-TV offering and are still usingtheir Sky digi-box for free viewing ofcertain unencrypted channels. DTT(Freeview) has a 32.9% share and digitalcable 16.6% of digital homes. Freeviewcontinues to dominate UK box sales,selling 700,000 in Q2/05, compared with496,000 in the same quarter last year.However, Ofcom states that just under30% (or 2.25m) of all Freeview boxes soldare being used in second rooms. Another360,000 boxes have been sold – and areinactive because of reception difficulties.Freeview’s April-June sales of 700,000more than dominates Sky’s net sales ofjust 75,000, boosting its subs base to7.4m. Cable companies Telewest and NTLadded 57,000 net new subscribers duringthe quarter.

Charles Allen summed up thedilemma facing UK broadcasters lastweek, saying the challenge was to convertthe UK’s digital ‘refusniks’. “Our research,and it matches that of the BBC, showsthat some 35% of the population abso-lutely refuse to pay any more for their TV.

• On October 26 2005 German commercial broadcasters will startsimulcasting in MPEG4 high-definition its Pro7/SAT1 pair of chan-nels. A few days later (November 19) Munich-based Premiere willstart transmissions of its three HDTV pay-TV channels (sport, moviesand documentaries).

• On September 1 C:More Entertainment (formerly Canal PlusScandinavia) launched their 1st HD channel over the Nordic region.C:More will add more channels in 2006.

• In September the BBC started long-term test transmissions onsatellite of an MPEG4 high-def signal from London.

• In September 2005 Sky Italia signed a massive transponder contractwith Eutelsat to secure satellite capacity for their cluster of HDchannels, promised for the middle of 2006.

• On September 13 Dolby Laboratories confirmed that Canal Plus,Premiere and BSkyB would all be using Dolby Digital 5.1 SurroundSound on their HD transmissions.

• In December BSkyB will launch their ‘barker’ HD channel, withEurope’s most comprehensive HD package expected to launch inFebruary 2006.

• France’s Canal Plus is promising it will start HDTV transmissions“early” in 2006 using the Astra satellite platform.

• France’s TPS pay-TV platform will launch its TPS Star channel in HDthis winter.

They don’t want pay-TV.”Allen admitted that his firstthrust was to promoteFreeview. “Eight out of 10people who can receiveFreeview do buy Freeview.Freesat just fills in thegaps in reception. Ourresearch shows thatyoungsters aged 16 andunder are the true digitalinhabitants. Over 16 yearsof age and you’re likely tobe a digital immigrant. Weneed to learn how tomanage this radical

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FEATURE

change.”

The pressure is now on ITV (and theBBC) to prepare for the day when the UKswitches off its analogue signals, startingin some regions in barely 36 months time(2008), and for a complete shut down by2012.

But where does this leave the rivalfreesats? In September, speaking at theCambridge (UK) Royal Television Societybroadcasting convention, Sky’s COORichard Freudenstein declared that thesatellite broadcaster had “no intention, noneed” to give away free digital Sky+boxes. Freudenstein instead promisedEthernet connections in every future Sky+box, allowing video-on-demand, livestreaming of sports events and movies viadevices other than television and theability to set Sky+ recordings from mobilephones. He stressed that despite the rivalofferings he had no intention of givingboxes away for free. This unequivocal

statement douses comments from thefinancial community that Sky would,during 2006, liberally sprinkle the stillreluctant market with free equipment.

Charles Allen said that ITV and theBBC were considering a “minimum”specification for ‘Freesat’ endorsed boxes.But he also conceded that the consortiumcould not ban low-cost ‘zap-boxes’coming into the market. The risk is thatthese boxes, available in other markets foras little as $60, come without a ConditionalAccess slot, or the hardware being it, andfrequently withonly minimummiddleware tosupport over-the-air interactivity.UK box makersPace Micro say itwould find itdifficult to enterthe UK marketwith a BBC-

version freesat box. Graham North, HumaxUK’s commercial director said he wouldprefer to concentrate on higher-value PVRunits.

There’s another problem in the airfor BSkyB. Sky’s rationale behind their‘freesat’ offer is that once installed the boxoffers daily temptations to viewers totrade up, either to Sky’s ‘big basic’ orpremium services. Dawn Airey, Sky’sprogramming head, described it as pay-TV’s equivalent of “crack cocaine”.

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While ITV’s Charles Allen saysFreeview will never adequately reachsome 25% of the population, regulatorOfcom’s numbers are more modest. Theysay that once analogue is switched offthey can crank up the digital signal tosuch an extent that only a mere 370,000UK homes will be deprived of a terrestrialsignal. Time will tell, but it’s all terriblyconfusing for UK viewers and consumers,and a problem for any other large nationabout to walk the same road.

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FEATURE

The announcement at the end ofAugust of Intelsat’s plan to acquirePanAmSat for $3.2 billion will

createthe world’s largest commercial-satellite fleet with unparalleled influenceover the global and regional satellitemarkets.

For some years now, among satelliteoperators consolidation has been alwaysa question among analysts of who willbuy who next in the market. But this latesmove by Intelsat caught many satelliteanalysts unawares. The move was morerelated with asset consolidation by themajor investors that owned these two keycorporations. The satellite market overallis struggling with weak demand coupledwith the increasing costs of launching andoperating spacecraft designed to providedata, internet, video, voice for corporateand government agencies.

Futron Corp issued a white paper“What’s up with Satellite Consolidation?”that I have incorporated in this articleshowing the level of consolidation thatthe market will have in the C and Ku-Bandcapacity now currently on- orbit aroundthe globe by the major players in themarket. (See sidebar)

Following the news of Intelsat’sacquisition of PanAmSat, there has been alot of speculation about the size andimpact of this new combined entity, inparticular in relation to the rest of thesatellite industry. In order to put this intosome perspective, Futron has compiled areview of the C-Band and Ku-Bandcapacity now on orbit around the globe

Intelsat Acquisition of PanAmSat:Global and Regional ImpactsBy Bernardo Schneiderman

Key Facts of the Intelsat Acquisition of PanAmSat

Intelsat PanAmSat

Headquarters: Bermuda Wilton, ConnSatellites: 28 252004 Revenue: $1.04 billion $827 millionEmployees: 800 600Investors: Apax Partners, Apollo Kohlberg Kravis

Management, MDP Roberts, Carlyle Group,Permira AdvisorsPartners

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FEATURE

operated by the following:

· Intelsat/PanAmSat combined· SESGlobal (including Americom,

Astra and other operators in whichSES has a significant investment,i.e., AsiaSat, Nahuelsat, StarOne,Sirius)

· Eutelsat· New Skies Satellites· Loral Skynet· Other (all other national/regional

monopoly or even a duopoly.The acquisition will create the

world’s largest satellite company, with 53satellites that serve customers in about220 countries.

Intelsat, which is nominally based inBermuda with headquarters in Washing-ton, D.C. could issue as much as $4.2billion in junk bonds to back its purchaseof PanAmSat, the SEC filings showed.Details about the bond offering are notfinalized. But Intelsat has received debtfinancing commitments from six lenders:Deutsche Bank AG, Citigroup GlobalMarkets, Lehman Commercial Paper Inc.,

FSS and BSS operators)

This data has been taken fromFutron’s database of commercial GEOsatellite supply and reflects a currentsnapshot, recognizing that some of thecapacity is on moveable spot beams or onbroader beams which can transfer servicebetween regions as demand requires.

While it is clear that in someregions, and for some types of capacitythe new Intelsat/PanAmSat will be adominant player, in other areas the largenumber of “independent” operatorsmaintains a competitive environment. Thislatter issue also demonstrates that there isstill room for further consolidation oneither a regional or global basis, withoutthe satellite industry being reduced to a

Major Regional Providers in Latin America

Satellite Carriers Country/Region Number of Satellite inCoverage) Operations

Star One Brazil 4Loral Skynet do Brasil Brazil 1Hispamar Brazil 1Nahuelsat Argentina 1Satmex Mexico 2

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FEATURE

Deutsche Bank Securities Inc., CreditSuisse First Boston and Lehman BrothersInc., regulatory filings showed.

In Latin America the impact of thisconsolidation shown in the Futrongraphic (Satellite capacity on orbit perregion, frequency band and operator) isthat the Intelsat/PanAmSat consolidationwill maintain control of almost 50% of thetransponder capacity in the region.

The key impact is in the videosegment where PanAmSat alreadydominating the video market for both DTHchannels in Latin America with Sky LatinAmerica and Direct TV Latin America.Intelsat in the region still a major playerfor the incumbent regional long distancecarriers and other major satellite servicesproviders (Comsat International, Impsatand Tiba) for voice and data traffic.

But Latin American major regionalsatellite carriers such as Star One, Satmexand Nahuelsat have their niche market andwill not be affected in the short term withthis consolidation.

Beside regional operators we havethe following international operators withcapacity available in the Latin Americamarket beside Intelsat and PanAmSat,namely: SES Global, Loral Skynet, NewSkies, Eutelsat, Hispasat and Telesat.

Latin America market still has aheavy C-Band focus and the trends is thatthe Brazilian, Venezuelan, Argentinian andMexican governments will launch theirown satellites in the next 5 years as theyare in the planning stage. But the videomarket (DTH) will continue to be domi-nated by consolidated operations ofIntelsat and PanAmSat because of theirexisting assets and clients. SM

Bernardo Schneiderman has over 30 years of experience in the

Satellite & Telecom Industry. He is the Businesss Development

and Technical Director of Space & Telecom Divison for Futron Corp

based in Irvine, CA. USA and is responsible for the West Coast

and the International Market. He has global experience in Marketing

and Eng. Consulting , Sat and Telecom Carriers, VSAT and Telecom

Manufacturers. Mr Schneiderman has been writing for the industry during the

last 12 years and can be contacted at [email protected]

http://www.panamsat.com

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VIEWPOINT

The International BroadcastingConference (IBC) was held inAmsterdam, the Netherlands,

during September 8 – 12, 2005 and had asits theme, The World of Content –Creation, Management, Delivery. Iexpected it would complement NAB bygiving a European perspective on televi-sion broadcasting. What I found is anevent that broadly addresses electronicmedia in all of the current and evolvingforms. This view was reflected in the widerange of exhibits by companies andorganizations from around the world,including some very interesting newofferings tied to the use of communica-tions satellites. These include highly-transportable Ku band terminals suitablefor almost any type of content transfer;innovative means to add two-way data toconventional DBS; expansion of the

Viewing IBC 2005 from a SatellitePerspectiveBy Bruce R. ElbertPresident, Application Technology Strategy, Inc.

GlobeCast SNG and NorSat portable Kuterminal.

HDTV format; realization of an improvedand enhanced DVB-S2 standard; andintroduction of broadband VSAT technol-ogy that goes beyond DSL and cablemodem capabilities.

Amsterdam is a fun city to visit andwas particularly enjoyable because ofsome of the nicest weather imaginable. Itis an excellent host to IBC, which is heldin the RAI Center to the south of theCentral district of this city of internationaltrade and commerce. Once you’re insidethe exhibit hall, which is where I spent themajority of my time, you could have beenat a similar venue in Las Vegas or Tokyo.My particular tour through the exhibitsfocused on satellite-enabled solutions andrelated technologies that could invigorateour industry.

Touring the exhibits – with a focus onsatellite communications technologies inthe broad media field

As with NAB, there were severalhalls and many exhibits, both large andsmall. There was also an excellent outdoorexhibit area with lots of SNG and trans-portable terminals to gawk at. GlobeCastdisplayed an interesting van with twoworking dishes, while Norsat presented aninnovative design of a 1+ meter Ku-bandtransportable that can be compressed intotwo 50-pound backpacks. SweDish, thecompany to beat in terms of engineeringdesign and compactness, showed howthey could transmit 35 watts from theiracclaimed .9 meter IPT, a terminal thatstows into something an able-body cancarry onto a commercial jetliner.

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VIEWPOINT

Looking ahead in the DTH field, astartup company from Israel calledWiNetworks showed how to use acommon mast to support a standard DBSantenna and a two-way broadband dataterminal. Using the terrestrial WiMAXstandard, this system allows the DTHoperator to offer what WiNetworks calls a“Triple Pay”, consisting of standardmultichannel digital television, high-speedInternet access, and interactive TV. ArielZur, Director of Sales, said their systemalso supports VoIP telephony.

HDTV, now moving toward the mainstream in the US market through DBS and

DBS Triple Play from WiNetworks

http://www.aaesys.com

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VIEWPOINT

Bruce Elbert has over 30 years of experience in satellitecommunications and is the President of Application TechnologyStrategy, Inc., which assists satellite operators, networkproviders and users in the public and private sectors. He is anauthor and educator in these fields, having produced seven titles andconducted technical and business training around the world. During 25 yearswith Hughes Electronics, he directed major technical projects and ledbusiness activities in the U.S. and overseas. He is the author of The SatelliteCommunication Applications Handbook, second edition (Artech House,2004). Web site: www.applicationstrategy.com / Email:[email protected]

SM

over-the-airbroadcasting,can potentiallyoffer evenbetter definitionon largerscreens. NTT ofJapan demon-strated this withtheir 6K by 1Kformat, provid-ing the experi-ence of actuallybeing at thesports stadium.Through apartnership with Hitachi of America, NTTis making available the appropriate codecsthat transfer this format; also availablethrough Hitachi is a standard HDTVcodec of extremely small size. Transmis-sion of both HDTV and standard defini-tion signals for the contribution anddistribution of video content was justmade easier through the advancedproperties of DVB-S2, a new standard thatcan combine MPEG-4 with advancedforward error correction and bandwidth-efficient modulation. I spoke withRaymond Pieck, President and CEO ofNewtech America Inc. about their newlines of modems that support DVB-S2.

Broadband VSATs were wellrepresented in the exhibit area. iDirect hada strong presence at IBC, building on thepopularity of their versatile TDMAimplementation. Just introduced in this“space” is another star VSAT networkfrom ND SatCom, already recognized forsolid transmission equipment for Euro-pean and US broadcasters and other high-end users. Dr. Gerhard Bommas, CTO ofND SatCom, presented their SkyVIPbroadband VSAT network consisting of anew, compact hub configuration alongwith updated VSAT remote equipment.This should provide an interestingdimension for users needing expandedbandwidths and flexible solutions to

communications problems.

Driving ElectronicInnovation to Reach NewMarkets.

It’s tempting to con-clude that our industryalready has sufficient technol-ogy “tools” to get the job done. But, thissample of what I saw in the RAI exhibithalls provides modest innovations to givea needed boost for a particular user group.In the right hands, the new techniquescould drive an application from a smallniche into the main stream. Time will tell ifthis is true or not, but attending eventslike IBC can only expand one’s thinkingabout what is possible using satellites andmodern electronic systems.

Broadband VSAT Hub and SkyVIPremote from ND SatCom.

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EXECUTIVE SPOTLIGHT

Interview with MainstreamData CEO Scott Calder

Q. This is your second term atMainstream Data, give us a littlebackground on the history of yourcompany?

A. I started the company back in1985 and built the company to about $20million in revenue and then left in 1996and returned in 2000 and upon my returnthe company had declined in size andrevenue. Since then we have turned itaround and grew it back to where we arenow about $10 million in sales and 40employees with facilites in Salt Lake City,New York and London.

Mainstream was acquired in 2000 byCidera from the people I had sold it. Sowe were part of Cidera (now defunct-ed.)at that time and were known as CideraMainstream and then it become apparentthat the direction that Cidera was goingwas quit different from the direction thatMainstream was going, so we spun outMainstream from Cidera by dividendingthe stock from the shareholders of Cidera,

For over twenty years, Salt Lake City-based MainstreamData has been providing communications solutions tocompanies like Bloomberg, Reuters and ESPN SportsTicker to find new sources of revenue and reduce operat-ing costs. It’s CEO and co-founder, Scott Calder grewMainstream Data from scratch and later sold the companyin 1996 to “pursue other interests.” In late 2000, he wasinvited back to the company and has since turned thecompany around. In a candid interview with SatMagazineManaging Editor Virgil Labrador, Calder spoke on how heturned around the company and the new business oppor-tunities that they are pursuing. Excerpts of the interview:

so they then had shares in both Cideraand Mainstream. That was started in 2001and was finalized in 2002. At that pointthe owners of Mainstream were effectivelythe same owners of Cidera because theyall owned stock. Since that time, we’veraised significant additional funding andnow management owns a significantportion of the company. I myself currentlycontrol about a quarter of the shares inMainstream.

Q. What are your main productlines?

Mainstream is both a serviceprovider and an application provider inthe satellite business. We view the recentchanges in communications as largely acommoditization in the resale of satellitecapacity. In order to add value to band-width, Mainstream has developed a set ofapplications that differentiate us fromthose companies which just buy capacityfrom satellite operators and cut it intosmaller pieces and resell it. We have very

specific applications that are recognizedas one of the best industry like in thefinancial news business—for examplecompanies such as Reuters, Bloomberg,PR Newswire and other use us not just fortransmission but also for applications tocapture, manipulate and display theircontent. If you go any major newspaperin the world, chances are pretty good thatits content (from Reuters or Bloomberg forinstance) are being delivered by Main-stream. The same goes for web content, ifthey get financial information fromReuters or Bloomberg, they get it fromMainstream.

We recently were successful inproviding a turnkey satellite solution forTechnicolor Digital Cinema which issubsidiary of Technicolor which is ownedby Thompson, to provide satellitedistribution initially of their ads andtrailers to thousands of theaters in NorthAmerica. It is expected that by sometimein 2006 they will also begin distributingmovies by satellite. This is a new busi-

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EXECUTIVE SPOTLIGHT

ness for us.

We also own and operate a LinkstarVSAT network with more than 2,000attached sites for both asymmetricdistribution of digital signage content aswell point-of-sales. We have a newcontract for 4,400-site network for restau-rants all over the country which will be atwo-way connection for their accountingsystems, credit verification and transac-tions and all of their broadband IPconnections. It’s a good piece of newbusiness.

So if you look at our business, wehave the traditional legacy broadcastcontent distribution which remainshealthy and growing and we have a newmajor foothold in the digital signage andcinema business.

Q. Mainstream Data is known forits work with clients in the informationand media distribution business, such asReuters and Bloomberg. What percent-age of your business is this segment?

A. Probably around 70 percent andit’s growing modestly and the newbusinesses such as digital signage anddigital cinema are about 30 percent andgrowing very rapidly.

Q. Do you see this percentagechanging in the short-term?

Absolutely—digital signage and

“…We expect to grow twice as much as we

have been. Which is not bad for a relatively

small company…”

digital cinema are the two most rapidlygrowing segments of our business and Isuspect that we will have a majority of ourbusiness coming from those segmentswithin a couple of years.

Q. Talk about your recent forma-tion of MDI Technologies?

MDI is a result of the resourceswhich we already had and because of our20 years experience in the satellitebusiness, an increasing number ofcompanies have come to us for help withthe IT side of their business. MDITechnologies will provide customers withservices including project management,phone and field support and installationand maintenance of satellite equipment.We’ve already had one contract with amajor company which we will be announc-ing shortly.

Q. Where do you see the mostgrowth coming from?

In terms of current profitability, thecontent distribution and applicationsbusiness clearly in the lead. In terms ofpredictable growth, I would say, digitalsignage and in terms of potentiallyexplosive growth, it would be digitalcinema.

Q. Since you are now a privatecompany, have you returned to profit-ability under the new set-up?

There was time after we broke offfrom Cidera that we .. had to trunaroundthe company and therefore we weren’tprofitable. However, we are back toprofitability.

Q. Do you see that continuing?

Yes, we certainly do andwe expect to grow twice as muchas we have been. Which is notbad for a relatively smallcompany.

SM

34Back to Contents


VITAL STATISTICS

Futron is a premier provider of decision support consulting services to the aerospace and telecommunications industries. Using ourproprietary methodologies, models, and in-depth data repositories, Futron transforms raw data into valuable intelligence. Ourresults help clients make higher quality business and technical decisions. Our consulting services include market and industryanalyses, safety and risk management, and communications and information management.

For more information contactSpace & Telecommunications Division, Futron Corporation – www.futron.com, Tel: +1- 347-3450 – [email protected]

Starting this month, we are introducing a new section called “VitalStatistics” which will be presented by Futron Corporation. This sectionwill provide snapshots of vital indicators on the satellite industry

35Back to Contents


MARKET INTELLIGENCE

It is now widely recognised that accessto information and knowledge throughaffordable communications represents

a significant opportunity for social andeconomic development, for regionalcooperation and integration, and forincreasing the participation of people inthe emerging global information society.Addressing deficiencies in access to low-cost communication services is thereforenow regarded as an urgent imperative forimproving the quality of life in Africancommunities, especially in remote andrural areas where the bulk of the popula-tion still resides.

Over the two days 23-24 November2005, in Abuja, the GVF will host thesecond of the NewCom – “New Communi-cation Technologies and Strategies toBridge the Digital Divide in Africa” –conferences, creating a forum withinwhich this imperative can be furtheraddressed with, on this occasion, a focuson West African Satellite Communica-tions. The West African Telecommunica-tions Regulators Assembly (WATRA) andNigerian Communication Commission(NCC) are endorsing the NewComWAFSAT event just as West Africa istaking centre stage in the telecoms arenawith advanced plans for a regionalsatellite to service unprecedented levelsof private sector demand for satellite-based voice, data and video solutions.

Africa is fragmented into many smallnational markets, and limited economies ofscale have combined with low-incomelevels to reduce the ability of telecommu-nication operators to provide services.

“Open and Closed Skies: Satellite Accessin Africa” … One Year On TowardNewCom WAFSAT By Martin Jarrold

Chief, International Programme Development

Traditionally compounded by lack ofcompetition in the sector, this has resultedin low levels of investment in infrastruc-ture. As a result, even where access isavailable, costs often remain extremelyhigh, especially outside urban areas.Although there are a growing number ofinitiatives to expand terrestrial infrastruc-ture, these are usually confined to themajor cities and along trunk routes. As aresult, the cost of bandwidth for Internetand other services has generally been 10-100 times higher than in North America orEurope.

Fortunately, as indicated above,satellite technology presents an immediatesolution to this bottleneck, even in thevast terrain of Africa’s regions. The IDRCPan-Africa Satellite Survey that providedthe basis for the Open and Closed Skies:Satellite Access in Africa report – nowwidely circulated throughout Africa andglobally since its September 2004 publica-tion – confirmed that systems using thenew high-power satellites over Africamake it possible to obtain bandwidthanywhere in the region about 10 timesmore inexpensively than in the past.

As will be further explored atNewCom WAFSAT in Abuja, a growingnumber of African Administrations havebegun to implement policies and regula-tions that seek to open telecommunicationmarkets to varying degrees of competi-tion. These policies are being applied totelecommunication structures that, on onelevel, have traditionally been remarkablyuniform. Without exception, the sector ofeach African country has been organisedon the principle of national operatingentities having responsibility for provid-ing telephone service. In some cases,international links were - and in somecountries still are - the responsibility of aseparate entity. Government ownership ofoperating entities has been the norm.

In some African countries that haveadopted a liberalised regulatory frame-work, private VSAT networks are allowedto function under the authority of theincumbent operator, while the latter stillretain a formal monopoly. There is alsousually a limitation on the provision ofvoice services

.Another common restriction in

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MARKET INTELLIGENCE

Africa involves limiting private VSATnetworks only to domestic use. VSATnetwork operators may be required toroute their private network transmissionsthrough the national hub of the incumbentoperator, regardless of the financial oreven the technical disadvantages this mayhave for private VSAT network operators.In some cases, obtaining a VSAT licencemay require a bilateral arrangement withthe incumbent operator with a “landing-rights fee” or tariff to be paid to theoperator, even if the incumbent does notparticipate in the service chain. In othermonopoly jurisdictions, the incumbent isthe only entity that may install and serviceVSATs or the only entity that may own,operate and maintain satellite earthstations

.A commercial/legal presence is

typically required in Africa as a pre-condition for licence issuance. This canbe an obstacle to the effective roll-out ofVSAT services in the countries con-cerned, because it increases overheadcosts to the private VSAT operators andinflates prices to the end-users.

And finally, in a number of Africancountries, rules are often not transparentand are inaccessible to the general public.The licence-application process can beextremely complicated, including process-ing periods that require up to two years,payment of a wide variety of fees -including additional taxes, annual operatorfees, landing rights, etc. Added tolicensing fees are customs duties, whichare often so high as to prevent cost-effective access to VSAT equipment.

Climbing the ICT DevelopmentCurve

Three in-depth case studies wereconducted for Open and Closed Skies:Satellite Access in Africa. Algeria,Nigeria and Tanzania, were selectedbecause they serve as representative

examples of African Administrationswhere satellite market liberalisation hasbeen – and continues to be – applied inorder to promote universal access. Inaddition, the countries were drawn fromthe western, eastern and northern sub-regions of the Continent. This not onlydemonstrates that the liberalisation trendis not confined to a single sub-region, butalso provides an opportunity to compareand contrast the satellite regulatoryapproaches being implemented across theContinent.

[Note: For full details of the threenational case studies, please consult thefull report which can be downloaded fromwww.gvf.org].

The case studies found that thethree countries are on different points ofthe ICT-development curve and that thevarying levels of progress – particularlywith regard to access to satellite-basedtelecommunication services – are largelyattributable to the effectiveness of eachcountry’s policies and regulations.

In trying to compare the license feeburden on VSAT networks in the threecountries a hypothetical 100-terminalnetwork was costed according to eachcountry’s license fee structure, assumingan arbitrary monthly revenue or turnoverof US$200 per terminal over five years.

Tanzania’s license fees place almost2.5 times as much burden on the networkthan does Nigeria. In Tanzania the feesover the five-year license period amountto over US$260,000, or about 22% of thefive-year operating cost vs. US$106,000,or about 9% in Nigeria. Algeria’s cost isconsiderably lower, at about US$33,000,but this is likely to increase when licensedVSAT operators are introduced.

In a ranking of telecommunicationsdevelopment in the three countriessurveyed, Nigeria would be at the top of

the curve, followed by Tanzania andAlgeria. Nigeria’s success is largelyattributable to how much further it hasprogressed in liberalising andderegulating its market. But the underly-ing explanation for Nigeria’s progress isthe effectiveness of the regulato.

Algeria has begun restructuring itstelecommunications sector, but growth ofthe Algerian ICT market in general hasbeen stalled by an inconsistent regulatoryframework.

By contrast, Nigeria has seendramatic growth in ICT investment since2001, coinciding with liberalisation andderegulation of the sector. The regulatoryframework is already open, relativelyconsultative and enabling and commercialusers consider the Nigerian Communica-tions Commission (NCC) to have trans-formed from a highly bureaucraticorganisation to one run efficiently alongbusiness lines.

Tanzania also has a progressiveapproach to liberalisation and deregula-tion, but the extent to which the regulatorhas used licensing to generate revenueshas limited local investment, and conse-quently, development of the sector. Thecurrent approach to licensing in Tanzaniaincentivises operators to focus on high-margin corporate-enterprise business topay their licence fees. Operators do notperceive Tanzania to have an environment

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MARKET INTELLIGENCE

that will provide them with a return ontheir investment and this also explainstheir reluctance to invest in a local hub.Added to licensing fees are customsduties, which are often so high as toprevent cost-effective access to VSATequipment.

The case studies also revealed thataccess to satellite-based services isgenerally being hindered by lack ofknowledge. Broadly, the informationrequirements suggested by each of thecountry case studies can be summarisedas follows:

• Algeria: Support is neededrelating to technical considerations(e.g. local VSAT hubs), economicfactors (e.g. satellite bandwidthcosts), and effective regulatoryapproaches (case studies of countriesthat have liberalised the VSATsector);

• Nigeria: Dissemination of VSATtechnical literature and marketing ofKu-band VSAT services are neededto promote the technology’s ability toserve as a cost-effective alternative toC-band systems for some applica-tions; and

• Tanzania: Dialogue amongst theregulator, ministries and othergovernment offices needs to bestrengthened with the aim of develop-ing the local ICT sector.

Finally, these three Administrationsstand in stark contrast to African coun-tries where duopolies and monopolies arestill in place. As was revealed by the IDRC

Pan-Africa Satellite Survey,when an Administration isfocused on protecting stateinvestments in a monopoly orduopoly, the inherent potentialof market forces to more rapidlyincrease access and decreasecost of service is greatlyinhibited… or preventedoutright.

One year on from publica-tion of Open and Closed Skies:Satellite Access in Africa, theWest African telecommunica-tions community, and withrepresentatives of the satelliteindustry, have a fresh, new andkey platform within which toextend a dialogue to address thecreation of the necessarymechanisms to advance theopportunity for regional satellite-based communications to bridgethe digital divide. That platformis NewCom WAFSAT.

NewCom WAFSAT willtake place on 23-24 November,2005 at the Meridien Hotel,Abuja, Nigeria. On 25 NovemberGVF will present a TrainingWorkshop.

Further information may beobtained from Martin Jarrold atGVF, telephone + 44 1727 884 513or [email protected] SM

Martin Jarrold is the Director, InternationalPrograms of the Global VSAT Forum. He can bereached at [email protected] For moreinformation on the GVF go towww.gvf.org

http://www.globecast.com

38Back to Contents


ADVERTISER’S

INDEXSTOCK MONITOR

AAE SYSTEMS 30www.aaesys.com

ARABSAT 15www.arabsat.com

COMTECH EF DATA 8www.comtechefdata.com

CPI SATCOM 13www.cpii.com/satcom

ECC 16www.eccincorp.com

GLOBECAST 37www.globecast.com

ILC 20www.ilc.com

L-3 NARDA SATELLITE 21NETWORKSwww.lnr.com

MITEQ 11www.miteq.com

PANAMSAT 28www.panamsat.com

PTC 2006 6www.ptc06.org

SES GLOBAL 23www.ses-global.com

For real-time stock quotes go to www.satnews.com/free/finance.html

Company Name Symbol Price (Sept. 28) 52-wk Range

APT SATELLITE ATS 1.19 1.16 - 1.68ANDREW CORP ANDW 10.96 10.38 - 15.49ASIA SATELLITETELECOMMUNICATIONS(ASIASAT) SAT 18.98 17.11 - 20.55BALL CORP BLL 36.61 35.25 - 46.45BOEING CO BA 67.21 48.10 - 68.38BRITISH SKY ADS BSY 39.44 34.44 - 44.99CALAMP CORP CAMP 8.11 5.23 - 10.18C-COM SATELLITESYSTEMS CMI.V 0.50 0.21 - 0.55COM DEV INTL LTD CDV.TO 2.35 2.25 - 3.25COMTECH TELECOM CMTL 40.09 16.8733 - 41.43THE DIRECTV GROUP DTV 14.91 13.88 - 18.25ECHOSTARCOMMUNICATIONS DISH 29.24 27.26 - 34.38FREQUENCYELCECTRONICS FEI 11.05 9.80 - 16.05GILAT SATELLITENETWORKS GILTF 6.47 5.25 - 7.62GLOBECOMM SYS INC GCOM 7.98 5.08 - 8.44HARRIS CORP HRS 40.20 26.48 - 41.82HONEYWELL INTL HON 37.57 31.85 - 39.50INTEGRAL SYSTEMS ISYS 20.24 17.25 - 24.70KVH INDS INC KVHI 9.73 6.76 - 13.23L-3 COMM HLDGS LLL 79.57 61.88 - 84.84LOCKHEED MARTIN CORP LMT 61.43 52.19 - 65.46NEWS CORP NWS 16.06 15.49 - 19.41NORSAT INTL INC NSATF.OB 0.78 0.43 - 1.51NTL INC NTLI 65.00 60.35 - 73.79ORBITAL SCIENCES ORB 12.27 8.84 - 13.10PT PASIFIK SATELLITE PSNRY.PK 0.20 0.09 - 0.30QUALCOMM INC QCOM 44.51 32.08 - 44.99RADYNE CORPORATION RADN 10.51 6.92 - 11.60SCIENTIFIC ATLANTA SFA 36.58 24.61 - 39.89SIRIUS SATELLITE RADIO SIRI 6.39 2.60 - 9.43SES GLOBAL FDR SDS.F 12.45 6.70 - 12.47TRIMBLE NAVIGATION TRMB 34.18 24.56 - 44.55VIASAT INC VSAT 24.95 16.83 - 25.00XM SATELLITE RADIO XMSR 34.02 26.16 - 40.89

http://www.aaesys.com

http://www.arabsat.com

http://www.comtechefdata.com

http://www.cpii.com/satcom

http://www.eccincorp.com

http://www.globecast.com

http://www.ilc.com

http://www.lnr.com

http://www.miteq.com

http://www.panamsat.com

http://www.ptc06.org


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