vol. 1, no. 11 march 2004 worldwide satellite magazineto get more information on sponsorship...
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Vol.1 No. 11 March 2004
CONTENTS TABLE OF
Click on the title to godirectly to the story
COVER STORY
11/ Satellite OperatorsSeek New Domain
Knowledge
18/ 20 million XM subsby 2010
15/ The Secrets ofBroadband-on-Demand Revealed
3 / Note from the Editor
4 / Calendar of Events
5/ Featured Event: ISCe 2004
8/ Industry News
10/ Executive Moves
24/ Financial Snapshot: New Skies
9/ New Products
10/ Advertisers’ Index
REGULAR
CapRockCommunications CEOErrol Olivier shares hisviews on the VoIPtechnology.
13/Abu DhabiGoes Global
FEATURES
A successful satelliteoperation requires a lotof new domainknowledge.
Tiny Emirates countryAbu Dhabi leveragestechnology and goesglobal.
21/ Interview withHellas Sat CEOChristodoulosA. Protopapas
.
DEPARTMENTS
23/VoIP and theFutureof SatelliteCommunications
By Errol Olivier
VIEWPOINT
By Bruce Elbert By Chris Forrester
Vol.1 No. 11MARCH 2004
By John Puetz
A SatMagazine exclusiveinterview with the CEOof Athens,Greece-basedsatellite operator HellasSat.
Service providers and theircorporate customers stillseem to be mystified bybandwidth-on-demand(BOD) and theaccompanying serviceofferings.
An in-depth view f thesatellite radio market.
By Chris Forrester
EXECUTIVESPOTLIGHT
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Satnews Publishers is theleading provider of informationon the worldwide satelliteindustry. Fore more informa-tion, go to www.satnews.com.
Published monthly bySatnews Publishers800 Siesta Way,Sonoma, CA 95476 USAPhone (707) 939-9306Fax (707) 939-9235E-mail: [email protected]: www.satmagazine.com
Contributing Writer, Africa
Jill Durfee([email protected])Advertising Sales
Joyce Schneider([email protected])Advertising Sales
Copyright © 2004Satnews PublishersAll rights reserved.
EDITORIALSilvano PaynePublisher
Virgil LabradorManaging Editorand Editor, North America
Chris ForresterEditor, Europe, Middle Eastand Africa
Bernardo SchneidermanEditor, Latin America
John Puetz, Bruce ElbertDan Freyer, Howard GreenfieldDan MakinsterContributing Writers,The Americas
Peter Marshall, Roger StanyardContributing Writers, Europe
Baden Woodford
NOTES FROM THE EDITOR
SatMagazine Celebrates One YearAnniversary
It’s official, SatMagazine is one year old. This is the last issue of Volume 1 and we start a newvolume next month. Our inaugural issue lastApril seem now a distant memory. It seemedappropriate at that time that we launched in LasVegas during the NAB show, as some think itwas a huge gamble to start another publication in
a industry where there are more publications closing down thanstarting up.
But here we are eleven issues and 27,000 registered subscriberslater, looking forward to our second volume. To commemorate thismilestone, we are coming up with a printed “Index” issue whichwill serve as a handy reference guide to the issues we’ve coveredfrom April 2003-March 2004. This full color hard copy Indexissue will be distributed free of charge at major trade shows suchas the NAB, ISCe 20004 and IBC. It’s amazing what we havecovered in just one year. SatMagazine has chronicled the majorissues affecting the industry in the past year and we plan tocontinue to serve the industry in man years to come. Watch outfor the Index issue.
Meanwhile, Satnews will be chairing a panel on “Earthquakes,Fires and Floods: Satellites to the Rescue ” at the ISCe conferencein Long Beach, California from June 1-3. We would like to extendour invitation to everyone to attend this exciting conference andexhibition. Mark your calendars.
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CALENDAR OF EVENTS
Don’t Miss ISCe 2004:
June 1-3,2004 Long Beach, CA, USA
ISCe is the premier annual conference and expo highlighting dual-use satellite-basedservices, applications and innovative technologies for the commercial, civil and militarysectors. Key program highlights for ISCe 2004 include: Satellite Users Forum; Defenseand Security Forum ; Global Navigation Forum ; Next-Generation Capabilities Forum ;Satellite Entertainment/DBS Forum ; U.S.-Asia Satellite Business Roundtable ;GPS Tutorials ; SatelliteCareer Day Program ; Innovation Gateway Pavilion.
For more information, please visit www.isce.com or contact Gina Lerma of Hannover Fairs USA, Inc. at (310) 410-9191 or [email protected].
March 2-5 Washington, D.C. Satellite 2004Tel: +1-310-453-4440Fax: +1-310-453-5258E-mail: [email protected] www.satellite2004.com
March 18-20 Johannesberg, South Afirica Convergence India 2004Tel: + 91-11- 2463 8680, 5155 2001Fax: + 91- 11- 2462 3320, 2463 3506E-mail : [email protected]
March 23-25 Jeju Island, Korea APSCC Workshop on Digital Satellite BroadcastingMr. Inho Seo, Conference DirectorTel: +82 2 508 4883-5Fax: +82 2 568 8593E-mail: [email protected]/event/work.asp
March 31-April 2 Hong Kong, SAR, China Satcom Asia 2004Tel: +65 6322-2700Fax: +65 6223-3554E-mail: [email protected]/2004/swa_SG/
MARCH 2004
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FEATURED EVENT
ISCe 2004: Conference to HighlightKey Industry IssuesLong Beach, California June 1-3, 2004
Now going on its third year, ISCe 2004 in Long Beach California is a must-attend event thatfeatures leading industry executives and decisionmakers in a three-day conference andexpo from June 1-3,2004. Organized byHannover Fairs,USA, one of theleading eventorganizers in theworld, ISCe hascarved a niche as thepremier annualconference and expohighlighting dual-use satellite-based services,applications and innovative technologies for thecommercial, civil and military sectors.
The Conference component of ISCe is organized in aforum format will be tackling key issues affectingvarous segments of the satellite industry including:
• Satellite Users Forum
••••• Defense and Security Forum
••••• Global Navigation Forum
••••• Next-Generation CapabilitiesForum
••••• Satellite Entertainment/DBSForum
••••• U.S.-Asia Satellite BusinessRoundtable
••••• GPS Tutorials
Richard DalBello Capt. PeterNeffinger
Dean Olmstead Keith Hall
••••• Satellite Career Day Program
••••• Innovation Gateway Pavilion
Commenting on the Forum format of theconference,Joachim Schafer,President ofHannover FairsUSA says: “Theforum design is aproduct ofdiscussions withboth
our partner organizations andattendees from last year’s show. It provides attendeeswith an easy way to learn about various aspects of aparticular topic and provides presenting companieswith a platform to reach decision-makers in a particularmarket segment.”
Speaking at the conference will be leading executivesand personalities in the industry. To date, confirmedspeakers include Dean Olmstead, President and CEOof SES AMERICOM; Richard DalBello, President ofthe Satellite Industry Association; Captain PeterNeffinger, Commanding Officer and Captain, Port ofLos Angeles/Long Beach; and Keith Hall, Vice-president of Booz Allen Hamilton (and formerDirector, National Reconnaissance Office), MarkDankberg, Chairman & CEO, ViaSat; Yousuf AlSayed, CEO, Thuraya Telecommunications; LinasDanilevicius, Supervisory Senior Special Agent, JointTerrorism Task Force – FBI; Scott Carson,President, Connexion by Boeing; Dr. Eui Koh,President - Asia-Pacific Satellite CommunicationsCouncil; Dr. Joseph R. Guerci, Deputy Director,
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FEATURED EVENT
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“We have added on another dimension to ourconference program by increasing the number ofsessions either dedicated to or of interest to end users,”added Schafer. “While this move will obviously be
SPONSORSHIP/ REGISTRATION
To get more information on sponsorshipopportunities or to register, visit www.isce.com orcontact Gina Lerma of Hannover Fairs USA, Inc. at(310) 410-9191 or [email protected].
With the unique conference format and the participationof key industry leaders, ISCe 2004 promises to be aexciting event where you could learn more about theissues affecting the industry and identify opportunities,network and do business all at the same time.
Chairman - Navtech Consulting; Ken Dozier, NASAFar West Regional Technology Transfer Center;Donald Walker - Sr. Vice President, Systems Planningand Engineering - The Aerospace Corp; GlynnSpangenberg - Vice President & General Manager ofTransport Logistics - Qualcomm; among others.
The organizers have also added new sessions includinga panel on “Earthquakes, Fires and Floods: Satellitesto the Rescue.” The session will feature the use ofsatellites in disaster prevention and management andwill be chaired by Satnews managing editor, VirgilLabrador.
Special Projects Office – DARPA; Keith McDonald, beneficial to the growing amount of end users thatcome to ISCe every year, it will also help serviceproviders understand what needs they should beaddressing with their end user communities,” he said.
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INDUSTRY NEWS
The SES GLOBAL companies bring entertainment andexcitement to millions of homes across the world. TheSES GLOBAL family consists of the world’s premiersatellite operators, each a leader in its respective market:SES AMERICOM in the U.S. and SES ASTRA in Europe, aswell as the partner companies AsiaSat in Asia, Star Oneand Nahuelsat in Latin America, and SIRIUS in Europe.This network provides satellite communications acrossthe globe, with the unequalled depth of service andaudience that only regional market leaders can provide.
Worldwide and worldclass.
New Broadband Service, NewSat FormallyLaunched by Multiemedia
In a two-day event attended by over 100 industryrepresentatives from all over the world last February23-24, a new broadband service dubbed NewSat wasformally launched by one of the leading Australiansatellite service companies, Multiemedia. Inattendance were NewSat partners and customersrepresenting satellite operators, service providersand end-users from business and government fromAsia, Middle East, Europe and North America.
NewSat is a new division of Multiemedia. It aims tofill a void in the market for next generation Video,Internet, Voice over IP and data communicationsservices for organizations not adequately served bytraditional broadband technologies such as ADSL,ISDN and cable. NewSat will have the capability todeliver high-speed communications to 60% percentof the world’s population, providing access to Northand South East Asia, the Indian sub-continent,China, the Middle East, Southern Africa andAustralia. NewSat has already secured a US $5million deal, which could be worth US$ 40 millionover the life of the contract, with the United SatesAgency for International Development (USAID) forsites across Iraq as part of its post-war enforcementand governance program. NewSat is listed in theAustralian stock exchange and has a current marketcapitalization of Aus $ 100 million.
The launch featured an industry conference tacklingthe theme is on “The Future of Communication.” Theconference featured presentations from key executivesfrom partners in the NewSat venture which includedMark Dankberg, Chairman and CEO of Viasat; DavidPrice VP of Sales of News Skies Satellites; PatMatthews, President of SeaTel; Rob Vechi, Presidentof Edge Access; Phil Meyer of Microsoft, amongothers. The speakers took turns in expressing theirbullishness on the satellite services market in generaland the NewSat venture in particular.
An ebullient Adrian Ballintine, Multiemedia founderand CEO, who hosted the proceedings, said “Youcan’t beat reality. Two- way satellite is suddenly thenumber one option for companies and this event hascaptured all the majors.” SM
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Agile Communication Systems16080 Caputo Drive #160Morgan Hill, California 95037Tel: 408-782-1371www.agilecoms.com
The mobile satellite dish mounts on top ofyour ENG, SNG, truck, trailer or RV. Softwareon your computer makes the dishautomatically raise up and lock on thesatellite in about 5 to 10 minutes. Once lockedon, you’re online at broadband speedsanywhere, anytime, all the time.
There are No-Per minute fees and no extrabandwidth charges.
Agile Communication Systems
� Automatic “Hands Free” all weather positioning
� True Broadband Mobile Internet
� Always On. No idle disconnects
� Flat rate monthly billing - no unexpectedcharges
� Quick reacquiring of a satellite that was pointedat last GPS location, heading and altitude
� Nationwide Installation
� 24-7 Technical Support
Finally…True Mobile wireless2-way Broadband for yourENG, SNG or EmergencyResponse Vehicles
NEW PRODUCTS
Aloha Networks, Inc is introducing a new, low profileSkyDSL Router at Satellite 2004. Aloha Network’sSkyDSL Router with integrated SkyTCP™ Software,and the SkyDSL Outdoor Unit combine to enable theSkyDSL VSAT Terminal to consistently provide low-
latency,high-speedsatellitebroadbandservice.
TheSkyDSL
Router is a custom single-board design using an IBM®
PowerPC® processor running embedded Linux, whichresides in solid-state flash memory. The satellite modemincludes an integrated 10/100 BaseT Ethernet routerthat supports from one to many users across both wiredand wireless LANs. The auto-ranging internal powersupply supports a wide range of power amplifiers anddish sizes for either a Ku- or C-band configuration. TheSkyDSL Router’s 1U-sized enclosure and omni-mounting system makes it ideal for desktop, rack mount,or wall mount installations.
Aloha Networks Introduces New SkyDSLRouter
Comtech EF Data Introduces NewAdvancements for its IP-Centric SatelliteModems
Comtech EF Data Corporation released a softwareversion 1.3.0 for its IP-centric satellite modems, CDM-IP 300L and CDM-IP 550. Included in the release areadvanced features that support bandwidthoptimization for satellite links, including PayloadCompression and enhanced Quality of Service (QoS).
With Payload Compression, the size of data frames iscondensed, reducing the satellite bandwidth requiredto transmit across links.
“When Payload Compression is used in conjunctionwith header compression, the CDM-IP modems offermaximized link efficiency for the service provider andreduced operating expenditures for the enterprise,”said Daniel Enns, senior vice president strategicmarketing and business development.
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EXECUTIVE MOVES
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Susan Eid Appointed VP-Government Relations ofHughes
Jeff Brunner
Jeff Greer
Keith Lippert Joins PivotalSatellite Technologies
Keith Lippert joinsNatick, Mass.-basedsatellite serviceprovider PivotalSatelliteTechnologies as it’smanager, sales andbusinessdevelopment.
Pivotal Satellite Technologiesprovides transportable satellitedownlinks, audio-visualsolutions, and commercialsatellite antenna installationservices throughout NewEngland and New York City.
Keith Lippert
ADVERTISER’S INDEX
(Click on the page no. to go directly to the ad; click on the url address to go to website)
Agile Communications 9www.agilecomms.com
Comtech EF Data 16www.comtechefdata.com
ISCe 2004 7www.isce.com
Kavera Software 19www.kavera.com
PanAmSat 6www.panamsat.com
Paradise Datacom 24www.paradisedata.com
PROMAX 22www.promax.es
SES GLOBAL 8www.ses-global.com
Susan Eid has been appointed asvice president of GovernmentRelations of Hughes. Eid, who mostrecently served as a legal advisor toFederal CommunicationsCommission Chairman MichaelPowell, will be based inWashington, D.C.Eid will oversee all regulatory andlegislative affairs for Hughes and itsoperating companies, includingDIRECTV.
From August 2000 through August2003 Ms. Eid served as a seniorpublic policy advisor to FCCChairman Powell.
KVH Industries,Inc. has named twonew vice presidentsto oversee itsmobile satellitecommunicationsand defense
product operations.Jeff Brunner, formerly KVH’sDirector of Operations for FiberOptic Products, has been promotedto Vice President of Operations,Military and Fiber Optic Products,and will oversee KVH’sconsolidated defense productmanufacturing at the company’sTinley Park, Illinois, facility. KVHhas also named Jeff Greer to theposition of Vice President ofOperations, Satellite Products. Mr.Greer will be responsible formanufacturing and operations at thecompany’s two facilities inMiddletown, RhodeIsland.
Mr. Greer has a BAfrom Grove CityCollege and a MAfrom BostonUniversity.
Mr. Brunner and Mr. Greer haveassumed many of theresponsibilities previously held byMr. S. Joseph Bookataub, KVH’sformer chief operating officer, whoresigned for personal reasons inDecember 2003.
KVH Industries AppointsTwo New Vice-Presidents
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COVER STORY
Satellite Operators Seek New DomainKnowledgeBy Bruce ElbertPresidentApplication Technology Strategy, Inc.
The satellite communications industry depends onsatellite operators as much today as it did in 1965
when Early Bird was launched. By taking big investmentgambles in spacecraft and launches, they offer powerand bandwidth to all manner of user locations andapplications. Central to their business model is themanagement of large capital and operating expenserelated to running a satellite fleet through variousgenerations of orbital assets and technology. This isnot a business for the faint of heart, or for thoseseeking a quick profit.
When Hughes AircraftCompany of the 1970sconcentrated on satellitemanufacturing and systemintegration, it soughtcustomers with deep pocketswho either could handle thetechnical challenges or wouldallow Hughes to help themreach a level of sufficientmaturity to run a satellitesystem. By 1975, RCA becamethe first spacecraftmanufacturer to move closerto the end user when they launched Satcom 1. Alreadyan international record carrier in the telex and data linebusiness, RCA demonstrated that new revenues couldbe had by competing with your satellite-buyingcustomer. Satcom 1 helped forge the cable TV industrythrough delivery of early subscription services such asHBO and SuperStation WTBS. Getting the point of allthis, Hughes established the Galaxy System in the mid-1980s and grew the business to over 12 satellitescovering primarily the US. Transponder sales not onlypaid for spacecraft construction but turned some ratherattractive profits for the parent, General Motors.
The teams that did this was immersed in new thinkingabout customer needs and solutions, therebyincreasing their domain knowledge as they traveleddown the entertainment TV vertical market. While atHughes, I recall participating in a Galaxy managementteam offsite meeting in 1984; its objective wasidentifying new businesses and revenues that could beobtained from operating satellites in Geostationaryorbit. Among the possibilities was mobile satelliteservice and direct TV broadcasting. The latter wasperhaps the first step toward DIRECTV, a system whichdemands many satellites to deliver a competitive DTH
service. Like RCA Satcom,DIRECTV is one of the greatsuccess stories in moving fromthe top of a vertical marketdown to the consumer whopays directly for the service.While many of the originalmanagement team came fromGalaxy, a multitude of otherswere recruited from consumerindustries or grown internally.
Many of the largest satelliteoperators today are involved invertical markets in a big way;
others have ambitious plans along those lines. Asuccessful business-to-consumer (B2C) satelliteoperator like DIRECTV learned that a vertical marketdemands a lot of domain knowledge. Such are theconsequences of moving from a business-to-business(B2B) foundation of owning satellites and providingtransponders, to a B2C strategy that delivers anintegrated service to the end user. A satellite operator“parent” can produce a vertical service “child” that isoften bigger and more capital hungry that anyone oncethought. Doing this on a small scale, like Hughes didwith DirecPC and SES with Astra Return-Channel by
“...A successful business-to-consumer (B2C) satelliteoperator like DIRECTV learnedthat a vertical market demands a lot of domain knowledge ...”
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COVER STORY
Satellite, may provide new domain knowledge, but it hasnot achieved the subscriber results of a BSkyB or DISHnetwork. The latter is a unique satellite operator andvertical market service provider that began as a purestartup backed by anentrepreneur - Charlie Egan inthis case. Echostar is now avery big company that has wona sizable segment of the hometelevision business in the US.Moving into another verticalmarket is just as much achallenge for Echostar as it isfor, say, SES Americom with theirAmericom2Home project.Success is not guaranteed, butdeveloping and nourishing afertile field to grow domainknowledge is a necessarycondition for success.
Some satellite operators prefer tostick to their knitting, a positiononce advocated by Tom Peters,co-author of the 1980s management book, In Search ofExcellence. JSAT and PanAmSat are partnered inHorizons 1, a conventional Ku band satellite to serve allof North America. These companies know the B2Bbusiness they are in and have found a creative way toreduce their respective risks in activating a new orbitslot at 127 WL. Intelsat is pursuing the B2C broadbandmarket, and has chosen to invest in startup WildBlue togain entry at a higher plane. This strategy has its risks,but Intelsat isn’t betting their company on its completesuccess. On the other hand, if WildBlue succeeds withtheir approach of using a cable TV-based system calledData Over Cable Service Interface Specification(DOCSIS), Intelsat has a part of a potentially valuablebusiness.
But what about the national satellite operators found ina variety of countries in Asia and Latin America? Somehave already chosen to merge with global operators;others seek to grow outside their particular countrymarkets. One – Shinsat - has decided to lead in its areaof coverage with a broadband thrust akin to WildBlue.Shinsat, part of the powerful Shinawatra Group ofThailand, is an experienced player in cellular and DTHmarkets; thus they have good domain knowledgecredentials in voice and video. This provides some of
the expertise and perseverance needed to succeed withthe challenge of broadband B2C services.
Technology and domain knowledge have defused fromthe west to the east, where costsare lower, suggesting that one ormore of these local initiativescould achieve financial success inthree to five years. That willdepend on overall economicdevelopment in Asia, for example.At the moment, the action is inNorth America, Europe andperhaps Africa.
The coming years will try thepatience of satellite operators andtheir investors, because rapidgrowth of vertical B2C markets isfar from assured. Each strategyprovides the possibility of newrevenues using space assetsalready committed to orbit or underdevelopment. On the other hand,
satellites provide that vital backbone of television anddata transmission in a world where fiber stops at majorcities and fails to reach into the home and most offices.This is a good thing for satellite operators with apatitefor growth, and the potential is there for an explosion inthe broadband market, like cellular in the late 1980s andDTH in the late 1990s. Satellite operators need tofacilitate experimentation with innovative applicationsand increase domain knowledge, while supporting theirlong-term customers in broadcasting, Internet services,and enterprise and military communications.
SM
SM
Bruce Elbert has over 30 years of experi-ence in satellite communications and is thePresident of Application Technology Strat-egy, Inc., which assists satellite operators,network providers and users in the publicand private sectors. He is an author andeducator in these fields, having produced seven titlesand conducted technical and business training aroundthe world. During 25 years with Hughes Electronics,he directed major technical projects and led businessactivities in the U.S. and overseas.He is the author ofThe Satellite Communication Applications Handbook,second edition (Artech House, 2004). Web site:www.applicationstrategy.com Email:[email protected]
Image from Boeing Satellite Systems
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FEATURES
Abu Dhabi Goes Global
By Chris ForresterSatMagazine Editor forEurope, Middle Eastand Africa
Abu Dhabi TV’s Ali Al-Ahmed
Abu Dhabi TV is spending $5.5mon a vast new 1300 sq m
studio, plus another $12m budgetedfor fit out, to ready itself fortransition towards high-definitiontransmission. The new studio has12m clear working height and isnow waiting for its massive ‘hangerdoors’ to be supplied this August.Abu Dhabi already operates 8studios including Discreet Logic-driven ’virtual’ 3D and 2D facilities.
Viewers around the world canalready see Abu Dhabi’s coreentertainment channel, carried aspart of Globecast’s ‘World TV’distribution package, and Abu
Dhabi is a member of the ArabStates Broadcasting Union (ASBU)consortium of Arab-languagebroadcasters seeking to deliver abundle of 10 channels to everymajor region of the world. Acontract is pending and it isunderstood that Globecast is thefavoured bidder.
The expansion has come as part of adeliberate policy to capitalise on theimages seen by viewers during theallied attack on Baghdad during theopening hours of last year’s Iraqicampaign. Director of Abu DhabiTV is Ali Al-Hamed: “We deliveredcredibility. How do we capitalise onthis? First, remember that theworld’s knowledge of us is nowmassive. Seemingly everyoneknows Abu Dhabi TV.” Asked howthe station had managed to come upwith the best images, he replied:“Everyone, you will remember, knew
the warwascomingso wewereable toprepareduringthe sixmonthsof buildup. Wehad achoice:we couldeitherstay athome
and buy footage in from the newsagencies, or we could gather thematerial ourselves. We decided thatwe wanted to be a primary source ofnews, and we were blessed byhaving the Number One beachfrontproperty in terms of camerapositions. We had the best cameraangles.”
Al-Ahmed says the expansionoverseas is a natural move in the21st Century, especially withdistribution costs being relativelyinexpensive, compared to theoverall cost of running a 10-studiocomplex and three broadcastchannels. “If you asked whetherthere would be Arab viewers livingin these overseas markets, theanswer is yes. But more than thiswe know that there is recognition ofour message and what we are doing.We believe we are a source of news.We do not want simply repeat thenews flow that’s coming from APTNor Reuters, but we want to be
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FEATURES
responsible for our own newsflow,presenting our viewer whereverthey are in world what our opinionis. It is absolutely not propagandabut is a view that we want the worldto see.”
As to the prospects for high-definition in the Middle East,Mustafa Ishaq, technical advisor toEmirates Media, which owns AbuDhabi TV, is emphatic: “Theproblems for us broadcasters is thatwe have to ask whether it is goingto be a blessing or a curse. HD, inmy view, will be a blessing forviewers who will love to see ahigher quality signal. Rememberhow it used to be in satelliteviewing, with terrible analoguesparklies? Well, digital got rid ofthose but viewers are ready for thenext step. They move their rooftopdishes to get the best signals, andprogramming. Now they like to havea single small dish that’s fixed. It iseasy to imagine the impact a bigvariety gala beamed from Beirut, orCairo, or here in Dubai, might havein HD with surround sound. It is thedifference between black and whiteand colour. Many of our programmesuppliers are now recording in HD,and our first step was to upgradeour equipment to 16:9 widescreen.Our new main production studio,under construction, is a likelycandidate for to be equipped with
HD. It is all a matter of dollars andcents, of course.Our directors haveseen someworking papersand they’ll bemaking a decisionsoon. You cannotstep back in thisindustry. Thelogical next stepfor us is HD.When equipping anew facility theextra cost is not
that much. On the viewing side wecan all see the plasmas are there,LCD’s are there, prices are tumblingand they are now affordable forordinary people, who are buying. Itis up to us to supply somecontent.”
As to the 10-channel bundle, Ishaqgave some additional background:“With ASBU we will take tenchannels worldwide, and we will dothis very quickly. People’s mobilityis so much different today, theyexpect to see their channels from
home wherever they are in theglobe.”
“Broadcasting is not cheap,everyone knows that,” added Ishaq.“But our costs here are significant,and adding a little transponderspace around the world is not amajor addition to that overallbudget. Transponder costs are onlya fraction of what they were fiveand ten years ago. If we are goingto pay for space on, say, ten digitalsatellites all over the world to getour signals in front of a maximumaudience, then this is probably stillless than we were paying ten yearsago for one analogue channel onone satellite locally. It is trulyunbelievable that costs should beso much less, and it allows us todevelop this concept. If it meansthat our local revenues mustsubsidise a modest incomeoverseas then it is an acceptablesubsidy. However, we also tell ourprogramme-makers continually thatthey must look across the border. Italso means that we have to legallybuy the rights for internationalmaterial, sport in particular.”
Abu Dhabi’s Global footprint• Hot Bird for Europe/Middle-East• Eurobird for the UK (BSkyB)• Telstar 5 for North America• Hispasat 1C for South America• NSS7 for Africa• Optus B3 for Australia / New-ZealandData: Globecast
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“Why Globecast?”According to Mustafa Ishaq, technical advisor to Emirates Media“That’s easy. There are only a few suppliers who could give us this sort ofresponse, we know that. To be frank, when we started there was two potentialsuppliers and then it came down to price. And Globecast was not thecheapest, but there was something extra that Globecast and France Telecomcould offer and that was speed of completion. There was one other factor,and that is that Globecast is going to be around for a long time. This isimportant to us. The contract was detailed, and took a little discussion,but continuity was very important to us. Our relationship is excellent,better than ever, in fact. They have not let us down and the partnership isvery strong.”
“The upcoming [10 channel] contract is just as important. When it was firstsuggested we invited Globecast to look at the tender but it also went out tofour others. And yet it is Globecast which has given better delivery, bettersatellites and even better prices! The logic for us in the ASBU plan isinescapable. Having a group of 10 channels is much less expensive than 10channels having single feeds going everywhere. I hope the 10 channels willgrow over the next 10 years.”
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The Secrets of Broadband-on-DemandRevealedBy John Puetz
FEATURES
As the third and fourth generation bandwidth-on-demand (BOD) VSAT systems rollout, service
providers and their corporate customers still seem to bemystified by the technology and the accompanyingservice offerings. What are the key differences betweensystems and how do service providers select betweenthem? As an end-user, how do I know that the serviceI’m buying will meetmy needs?
In the next fewminutes, we’ll look atrevealing theessentials ofbroadband-on-demandofferings and distillingdown the keyingredients of choice.
Not all needs are equal
In providing a serviceoffering or inpurchasing a service,the most fundamentalconcern is quantifyingthe end-user’srequirements. Whilethere are manyconsiderations tomake, the most important can be distilled down to thesethree:
• How much capacity is needed?• How important is quality-of-service (QoS)?• How much am I willing to pay?
These three are tightly interrelated; the better the QoSand higher the capacity, the more the service will cost.As illustrated in the diagram, the end-user’sapplications will determine the capacity and QoSrequirements. If Internet access is all that desired, thenservice quality is not very important and servicebandwidth needs are moderate. However, voice, video
conferencing and specialized real-time applicationsrequire a high level of service quality (low latency,consistent throughput and reliable connections). Andfor service providers, customer requirements vary byindustry segment (e.g., financial, oil & gas, disasterrecovery, construction, government, etc).
From a serviceprovider’sperspective, select abroadband VSATsystem platform thatdelivers:• Sufficient capacityfor both in-bound andout-bound directionsand scales easily• Integrated quality-of-service (QoS)mechanisms/tools thatsupport trafficprioritization,integrated protocolsupport & routing,and capacity loadbalancing• Attractiveeconomics; evaluatecost of infrastructureacross expected client
base (capital costs), remote site implementationcosts and operational costs (bandwidthefficiency, load-balancing/capacitymanagement and maintenance)
• Vendor stability and reputation
The power of sharing
While there will likely always be a need for thetraditional fixed-rate leased-line type services in certainindustries and applications, most service providers areembracing the power of sharing network capacityacross customers using bandwidth-on-demand VSAT
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systems. End-users are warming up to the concept aswell, especially as they become aware of the economicand operational benefits.
With traditional leased-line connections, the size of thedata pipes (e.g., data rate) is fixed, thereby requiring thedata/voice capacity to be sized for the expected peakloading, to ensure the desired rate of service,throughput availability and quality of service (QoS).Once the data capacity is selected and implementedusing SCPC services, the data rate does not change. Iftraffic requirements exceed the data rate, then the trafficis not accommodated and performance suffers.Likewise, if traffic requirements are considerably less,then capacity is unused.
Typically, end-users have dozens of sites, each withvarying traffic capacity needs. Using a bandwidth-on-demand system, the unused capacity can be applied tolocations that need additional capacity. This capacityallocation occurs automatically and typically every 2 to
6 seconds, depending on the system. As networkcapacity is shared amongst more locations, overallefficiency is improved even more, and the number ofsites that experience capacity bottlenecks is furtherreduced.
Let’s take a real-world enterprise example, where there isa variety of data applications and voice/fax usage.Traffic analysis shows that over a five week period, theaverage (24 hour/day) capacity requirement is 12 Kbps(remote-to-hub) and 47 Kbps (hub-to-remote). Peaktraffic conditions however where substantially higher,with hub-to-remote peaks 4.5 times the daily averageand remote-to-hub 11 times average.
In my studies of various industry segments, it’s notunusual to find intraday peaks of 20-to-50 times thedaily average throughput for relatively brief periods oftime (5 to 30 minute intervals). Furthermore, the busy-hour average is typically 2 to 4 times the traditionallymeasured 24-hour average, and considerably less than
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the daily peak average. These types of traffic patternscan benefit significantly with BOD systems.
The bottom-line benefit to end-users of a well-managedbroadband-on-demand system—fewer performancebottlenecks, better service and lower service costs. Forthroughput sensitive applications like voice/VoIP, videoconferencing and other real-time applications, thedelivered quality-of-service is extremely important.Techniques for supporting real-time applicationsinclude a minimum throughput mechanism (e.g.,committed information rate or CIR), prioritized queuingand transport (e.g., DiffServ, MPLS, etc.) and trafficshaping.
Delivered service offerings—not all are equal
While there a hundreds of service providers around theworld, there are likely only a handful that serve yourparticular locale or industry segment from an end-usersperspective. However, selecting a service provider canstill be difficult as there are many ways of packagingand delivering broadband-on-demand services. From abuyer’s perspective, you may find the followingevaluation criteria useful in comparing your servicevendors:
• What is the delivered capacity per site?(maximum and minimum; is there a guaranteedthroughput, e.g., CIR?)
• How often is the capacity adjusted?
• Is the capacity shared with other end-users?Using what oversubscription rate?
• How is quality-of-service (QoS) implemented,managed and audited? (per site and acrossyour network of sites)
• Is there a service level agreement (SLA)included? What are the provisions? Are therecredits if the SLA/QoS is not met?
• Do they have other customers that have similarneeds and traffic profiles? Get references andcontact them.
The old adage “you get what you pay for” is oftentimes true. Shop around, but resist the temptation ofpurchasing services from the lowest bidder, especially ifthey are considerably less than the others. The betterservice providers may cost more, but you’ll also have apiece of mind that when you call them, they will answerthe phone! SM
John Puetz is president of MasterWorksCommunications (www.mwc.cc), abusiness and technical consulting servicesfirm specializing in satellitecommunications. He can be reached at+1.760.723-8897 orby email at [email protected]
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20 million XM Subs by 2010By Chris Forrester.
In January the USA’s two satelliteradio stocks had a little downward
turn. Sirius dropped its monthlysubs price, and the threat oftougher competition affected XMSatellite’s trading price. ButFebruary’s news of Q4 numbersfrom XM should once and for alldispel any notion that this satellite-based technology has any realproblems. The fact isthat satellite radio isselling likegangbusters in theUSA. Market-leadingXM Satellite Radioand rival Sirius usedthe giant Las VegasConsumer ElectronicsShow (CES) to reportmore than healthysales figures for theirall-important pre-Christmas sales, andthe latest year-enddata confirms this.XM confirmed onFeb 11 that it finished2003 with 1.36msubscribers or 431Knet additions for the year.Moreover, XM has already added140K more subscribers in 2004,taking its total up to 1.5m.
But here’s the really good news.XM said in February – and the firsttime on the record – that it nowexpects to sign up around 20msubscribers by 2010, some 30% upon previous market guidance.
In addition, XM in Januaryannounced some new gizmo-features that make their in-car radioseven more useful devices. By aboutnow Canada’s broadcastingauthorities were also expected toconfirm whether any other playerswere interested in Canada’s DARSprospects. Both XM and Siriushave already tied up with local
players. XM is linked with Toronto-based Canadian Satellite Radio (acompany controlled by local fast-food entrepreneur John Bitove).Sirius is working with nationalpubcaster CBC.
But perhaps the biggest surprise ofJanuary’s CES was that XM woulddrop its 4-5 minutes per hour ofadvertising spots effective February1. Sirius has always been ad-free.
XM carried advertising on 35channels out of 70.
XM’s Q4 numbers really werespectacular, and significantlyoutperforming all marketexpectations. Q4 turned in 430,000net additions, against forecasts of295,000-330,000. XM’s market-shareof new DARS subs is around
currently around80%, and this 4-to-1 sales ratio wasconfirmed bySirius, whichreported Q4 netsales stood at111,000 taking itsyear-end total to261,000 activesubscribers. XMfinished the yearwith 1.36m subs(ahead of forecast1.225m).
It is now clear thatXM is steamingahead of its rivaland expects to end
2004 with 2.8m subs, again beatingmost market expectations by around200,000 units. If XM hits thesenumbers – and the market nowfirmly expects it – then it will go fullcash-flow break-even in 1H/2005which is slightly later than initiallyexpected (Nov-Dec this year).Indeed, the delay in break-even iscaused by that most beautiful ofproblems, selling too manyreceivers each with their associated
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Subscriber Acquisition Cost (SAC)which needs financing.
On March 1 XM added ‘always on’traffic data to its broadcasts, with 15out of 21 planned channels goinglive. Drivers in New York City, LosAngeles, Washington, D.C., Dallas-Ft. Worth, Chicago, Houston,Detroit, Philadelphia, Phoenix, SanFrancisco, Tampa-St. Petersburg,Orlando, Baltimore, Pittsburgh, andSt. Louis, will get the first set oftransmissions. Boston, Atlanta,Miami-Ft. Lauderdale, Minneapolis-St. Paul, Seattle, and San Diego willbe introduced later this year. Thisnews has not come without its owncontroversy, with the powerfulNational Association ofBroadcasters (NAB) stating that
neither XM nor Sirius is licensed forsuch data-casts. XM reportedlyagreed that it could not transmitlocal information from its network ofterrestrial repeaters, but within theirFCC licenses there was no mentionof any such prohibition in terms oftransmissions from XM’s satellites.
As to the dropping of advertising,analyst Bob Peck of Bear Stearnssuggests that negative customerfeed-back has prompted thedecision. “This could put morepressure on Sirius, as one of itsmain consumer selling points wasthat it didn’t have commercials,while XM did. One of the majorconcerns from this change in formatfor XM is the advertising revenueforecasts in the model. The
company has stated that it doesn’texpect its prior advertisingprojections to change substantially,as the advertisements will be movedto the newly created trafficchannels.”
The extra subs numbers predictedfor 2004 also seem to be comingwith lower-than-expectedSubscriber Acquisition Costs(SAC). XM, in its SEC 8-K filing, aswell as guidance given to analysts,suggests that SAC for 2004 isdropping on a per-subscriber basisat a rate “faster than expected” saysPeck.
XM has been famouslyconservative in its expectations todate and seems to like telling Wall
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Street that it its besting its ownguidance. Bear Stearns’ Peckagrees, at least as far as 2004’sforecast 2.8m subs is concerned.“We think this may still beconservative and would not besurprised if the company finishesthe year with north of 3Msubscribers. Of course, this wouldbe largely driven by the impendingOEM announcements from GM,Honda, and others on their level ofparticipation – we think this couldpresent further upside,” says Peckin a report.
There is one major uncertainty thatmay affect XM’s own internal cash-demands, and that’s insurance forone of its Boeing-built satelliteswhich has problems. XM isdiscussing compensation of some$400m for the damaged bird, and if itreceives this payout – says Peck –this year then it will meet itsfinance targets. If the payout isdelayed until 2005 then XM mighthave to borrow to cover thefunding gap. “However, we thinkthat the chances of the companynot getting any of its claim isminimal, as the satellite anomalieswere insured, the satellitemanufacturer (Boeing) admits to
the defect, and asother companieswith theexact sameanomaly receivedinsurancepayments on theirclaim (Thuraya).We expect XM tosecure ~50% ofits claim in 2H2004. This wouldleave thecompany fully
funded,” added Peck.
Bear Stearns has given XM’s sharesan “outperform” rating and a targetprice of $30, stating: “In addition,we continue to see a stream of morecatalysts that could come out ofXM over the next several monthsthat should help drive thecompany’s stock to our target. Ofparticular importance in our opinion,are the impending announcementsfrom OEMs on the number of carsthey will install with XM radio forthe 2005 model (which come out inSept 2004). We would look for GMand Honda to give updates on theircurrent plans. In addition, Toyotahas long been believed to beconsidering factory installations ofsatellite radio – this would be amajor catalyst for XM should
DARS to 2005*Dec 2003(A) Dec 2004(F)
XM Radio 1.36m 2.8mSirius 0.26m 0.86
Data: Bear Stearns
Toyota announce any plans toinstall XM radios in thefactory.”
However, if XM is winning thebattle in the market-place, thenthere has to be a loser and itseems XM’s sales success iscoming at Sirius’ expense.Sirius, according to BearStearns, will sell less than itsforecast 750,000 units in 2004.Peck is adjusting his bank’sforecast down to 600,000 netunits “and well down on pastguidance of 1 million” units.Peck adds that Sirius used theLas Vegas show to announce ahost of new products andprogramming today, including:10 new channels, wireless inhome networking, live videooptions, new portable boombox, and surround soundcapability.that 7,000 Radio Shack storeswould start selling the kit.That’s a coup, and if each storesold just one unit a week thenSirius might add 364,000 salesfrom one source. Watch thisspace.
London-based Chris Forrester, a well-knownbroadcasting journalist is the Editor for Europe,Middle East and Africa for SATMAGAZINE. Hereports on all aspects of the industry with special emphasis on content, thebusiness of television and emerging technologies. He has a uniqueknowledge of the Middle East broadcasting scene, having interviewed atlength the operational heads of each of the main channels and pay-TVplatforms. He can be reached at [email protected]
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EXECUTIVE SPOTLIGHT
Hellas Sat CEO Christodoulos A. Protopapas
Interview with Hellas Sat CEOChristodoulos A. Protopapas
Hellas Sat has issued a RFI for its second satellite, tobe co-located at 39 deg East. Hellas Sat
Consortium’s CEO Christodoulos Protopapas, speakingexclusively to Satmagazine’s EMEA Editor, ChrisForrester at February’s Dubai CabSat show, said thecompany’s first satellite (somewhat confusingly calledHellas-Sat 2 and launched last May) is now 20% full,and is 100% full for this summer’s Athens OlympicGames. Hellas-3 will provide redundancy for H-2 as wellas add extra capacity, including additional steerablebeams.
Hellas-2 is an Astrium-built triple-axis craft (EurostarE2000 bus) with 30 x 36Mhz transponders andgenerating at least 52 dBW power levels over Europe. Itwas launched on an Atlas rocket from the Cape and hasa design lifetime of 15 years. Hellas’ owners are aconsortium led by Greek telco OTE and includingTelesat Canada. Protopapas says that while the finalconfiguration of H-3 is not yet agreed, it will provide aback-up role to H-2’s Ku-band channels and add around12 active transponders over the region as well asadditional steerable spot-beams to fresh markets.Protopapas says that one option under considerationincludes adding C-band capacity.
H-2 went ‘live’ last September. Protopapas saystransponder leases have sold faster than anticipated inthe original business plan, helped now by three DTHmini-platforms on the satellite. “One addresses Bulgaria,another Greece and the third is an experimentaltransmission for Italy beaming up from Sicily.Additionally we have VSAT hubs, occasional use andtelecom clients. By the end of this year we expect tohave 50% sold. TV is our primary target, helped by ourpower levels.” Protopapas says by the end of 2005Hellas is on target to achieve a 50-60% fill rate.
Protopapas was reluctant to give more informationregarding the upcoming RFI given, he said, that Hellaswanted the companies concerned to commit to the usualNon-Disclosure Agreements ahead of detaileddiscussions. “We expect to issue the RFI by the end of
this week,” he said. “We have always been optimisticabout our sales prospects,” added Protopapas, talkingabout the industry’s past scepticism over the need forH-2. “They did not see Hellas as having an internationalappeal. They saw us performing purely as a Greek-Cyprus craft. While the Greek-Cyprus market wasalways going to have some appeal, it could never fill asatellite, absorbing perhaps 3 or 4 transponders orthereabouts. We designed Hellas to be an internationalbird, and on May 1st – with Cyprus’ accession into theEurope Community - this places us firmly at the heart ofEurope, and we see Cyprus playing a key role betweenEurope and the Middle East, the way it has alwaysdone. We can have relay stations in Cyprus helpingconnectivity between the two regions and furtherafield.”
“It is not our intention to compete with the likes ofEutelsat. We are tiny in comparison, and do not seekmajor expansion,” said Protopapas. I do not reallyunderstand why the big players see us as a threat. Ourmarket research always predicted that our local clientswould take perhaps 6 transponders, so that is hardlyattractive to the big operators. We have also been truewith prices, our prices are competitive helped by ourbuying the satellite and its launcher at very goodprices, and we are getting those benefits now. We arealso a small organisation with low overheads. We can
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“...Many operators are sustainingthemselves through low prices…”
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afford to be competitive to clients.” Like just aboutevery other satellite operator Protopapas sees SouthAfrica and India as representing tangible opportunitiesfor Hellas’ spot beams. The planned steerable beamover the Middle East has now been refocused towards
Europe. “We can now easily connect Munichwith Tehran and Iran,” he added.
Protopapas recognises that Hellas is helped byits major shareholder OTE’s existing telecompresence in most Eastern European countries(Romania, Bulgaria, Albania, Serbia andelsewhere). “These areas recognise Greece’sexpertise. We have been active in the regionfor many years, and Cyprus plays a similar rolein the Middle East where many companiestrading with the Arab world use Cyprus as abase. It is a neutral country, and recognised assuch. We will use this political advantage topromote Hellas.”
One of the questions currently troubling theindustry is transponder lease pricing, withoperators complaining of ever-falling prices.Protopapas says Hellas is not part of thisunder-cutting trend. “Many operators aresustaining themselves through these lowprices. We can afford low prices being a smalloperator, but the problem in this area is thebattle between Eutelsat and New Skies, whichwant larger slices of the market. They might besuccessful in winning some new businesswhich has a temporary effect in terms ofrevenues raised but in the longer run they arenot earning enough to replace their satellites.The same applies to us. If we win business atany price we will be harming our own ability tore-finance future craft. For us we are workinghard to establish new services, and to create
demand for our bandwidth. We see good prospects inPPV and DVB-RCS activity. These will, we think, boostthe market. Hellas does not even attempt to match NewSkies or Eutelsat. We have had clients approach us,asking for us to match this or that competing price. Wehave said ‘go to that supplier’ because we have apowerful satellite with strong EIRP coverage, and betterconnectivity.” He added that occasional use traffic forsport and news was building well. “The BBC is a regularcustomer, as is British Telecom. Our signal strengthhelps, and we have good bookings for the upcoming2004 European soccer championships.”
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VIEWPOINT
VoIP and the Future of SatelliteCommunications
By Errol OlivierPresident, CapRock Communications
You may remember a few years agowhen everyone first started talkingseriously about voice over IP(VoIP). Several companies claimedthat the world was in for anothertechnological revolution and thatparadigms were going to startshifting dramatically. You may alsoremember that technologicalrevolutions were a dime a dozen atthe time, and the United States wasabout to experience a tech crashand the ensuing aftermath. VoIP, likemany young technologies, had tobe put on the backburner until themarket was ready for it. Now, thatmarket is finally beginning tomaterialize, and VoIP is poised, onceagain, to take the communicationsworld by storm.
AT&T plans to make available aconsumer VoIP offering forcustomers in the top 100 marketsduring the first quarter of 2004, andVerizon has similar VoIP plans forthe second quarter. Vonage alreadyhas been delivering consumer andbusiness VoIP services successfullyand continues to gain subscriberson a regular basis. In the satellitecommunications industry, VoIP hasbeen quietly but widely available insome format for the past two years.
For the remote oceancommunications sector of thesatellite communications industry,the news about VoIP and IPcommunication has traveled slowly.Most ship-to-ship and ship-to-
shore (or remote rig-to-shore)communication has operatedunchanged for several years. That’snot all that surprising. For workerscentrally from a network operationscenter (NOC). The end user isn’tforced to constantly purchase newequipment or new softwareapplications. All of the newservices, in addition to any moves/adds/changes, are provisioned fromthe NOC. This creates dramatic costsavings and a pleasant reduction inhassle for everyone involved. Onland, such efficiencies eliminatetruck roll – but on water, the truckroll (which really involveshelicopters and boats) is far morecostly. Remote provisioning takescare of that issue.
In addition to the basic services andefficiencies, advances in IPnetworking are progressing atphenomenal rates. A limited numberof the new IP networks even featurethe much-talked-about plug-and-play capabilities. With plug-and-play, users are not tied down to asingle location. A user with a laptopon the network could leave thecentral office on the mainland, plugthe laptop into the network on a rigor vessel and be instantlyconnected to the VPN. The networkwould recognize the user, providethe user access to all authorizedservices and even automaticallyroute phone calls to wherever theuser is located.
Because the network enablesmobility, when a company and itspersonnel transfer to a different rigor remote location, the VPN goeswith them, and their phone numbersand IP addresses stay the same.The IP network is expresslyconfigured to make life easy for theuser. They are not required tochange or reconfigure their settingsat each location as they go from siteto site.
All satellite communicationsproviders do not offer theseadvanced features, but virtuallyevery offshore provider is offeringsome form of IP communications.Even so, experts in the industrybelieve it could be several yearsbefore IP becomes the de factostandard for offshorecommunications. In the meantime,those companies interested in IP viasatellite are encouraged to researchthe technology and look forproviders with a strong track recordof reliability and technologicalinnovation.
Errol Olivier is president ofCapRock Communications, whichprovides communications services toextreme locations. CapRock is thedominant satellite communicationsprovider for the drilling industry. Byoffering complete managedtelecommunications solutions in theworld’s harshest and most hard-to-reach environments, CapRock hasearned a reputation as the one tocall when reliability [email protected]
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FINANCIAL SNAPSHOTNew Skies SatellitesBy Chris Forrester
New Skies 2003 NumbersUS$ millions (except per share amounts) 3 months ended Year ended December 31 December 31
2003 2002 2003 2002
Revenues $54.1 $50.8 $214.9 $200.5Net income (loss) 2.4 4.4 11.8 (4.6)EBITDA (adjusted) 29.9 27.8 119.6 110.3EBITDA (adjusted) margin 55% 55% 56% 55%Basic and diluted earnings per share 0.02 0.03 0.10 (0.04)Free cash flow 3.7 (25.8) 65.7 (119.4)
New Skies say they will start theball rolling on another share buy-back program equal to 10% of theissued share capital. Speaking at itsFeb 11 results announcement CEODan Goldberg also said their Q4(and full year) numbers were in linewith expectations. Guidance for2004 is that numbers will be in linewith 2003 due to market conditions.“Management continues to deliveron the fundamentals of thebusiness in what continues to be achallenging FSS environment,”said analyst Bob Peck at BearStearns.
Goldberg told analysts: “We expectrevenue, EBITDA and net incomein 2004 to be by and largeconsistent with our 2003 results.Further, assuming most of theremaining milestone paymentsassociated with our NSS-8 satellitecome due in early 2005, weanticipate another year of positivefree cash flow, which we expect willbe somewhere in the range of$30m-$50m.”
But if that’s the upside, thedownside for New Skies is a storyof falling utilisation rates (fleet fillrate is 49%), albeit not helped withthe launch late last year of NSS-5 inthe POR where transponder ratesare still notoriously sluggish.Goldberg says NSS averagetransponder rentals stand at $1.3mper annum, although Q4/2003contracts were averaging just$1.2m.
Revenues for 2003 rose 7%, or$14.4m, to $214.9m, compared to
$200.5m in 2002. Revenues for thethree-month period ended December31, 2003 were $54.1m, an increase of
$3.3m, or 6%, compared to $50.8mfor the same period in 2002.
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