[Via Satellite 11-09-2015] Communications service providers with exposure to multiple markets are tapping into other growth opportunities to shore up their businesses while the oil and gas market contracts.<\/p>\n
Several players in the energy market underwent consolidation in the past year or two, opening up opportunities in more verticals than oil and gas. Panasonic Avionics <\/b>recently purchased ITC Global<\/b>, a major provider of connectivity to remote locations in energy, mining and maritime, folding the company in with a top aeronautical connectivity provider seeing high growth. Emerging Markets Communications, now just EMC<\/b>, acquired MTN<\/b>, a provider of connectivity to the maritime industry earlier this year. These companies and others have found ways to endure challenging market conditions in energy by leveraging the strength of their larger corporations as they prepare for continued uncertainty.<\/p>\n
\u201cWe\u2019ve been through this before,\u201d Joe Spytek, CEO of ITC Global, said Nov. 4 at OilComm in Houston, T.X. \u201cBack in the 2007 to 2008 timeframe when we hit that global financial crisis, some of the commodities at that time that we were servicing dropped precipitously \u2014 94 percent in the case of copper. I think oil actually touched $29 bucks a barrel in 2008 to 2009. That was very decidedly a \u201cV-shaped\u201d post-crises asset bubble that popped. It was very much a quick recovery and I think a lot of people are hoping to see that this time, but I do believe that the general consensus is that\u2019s not going to be the base and we are looking more like a prolonged low price environment for who knows how long.\u201d<\/p>\n
Spytek said joining Panasonic Avionics has led to interesting developments, particularly because when prices for oil go down, airline spending goes up, fueling the surge of In-Flight Connectivity (IFC). Panasonic Avionics is in discussions with satellite operators to influence the design of future high throughput payloads, according to Spytek, that would ultimately benefit the whole company.<\/p>\n
Hadassa Lutz, president of EMC\u2019s Energy Services Group, said the company remains strong by serving eight different verticals, with none representing more than 30 percent of its business.<\/p>\n
\u201cWhen you are going through a downturn market like we are going through today, our customers and companies like ourselves are looking for ways to reduce cost. The last thing you want is to look into as a service provider, is ways to reduce cost that [negatively] impacts service. Being able to have a diverse portfolio, you are able to sustain any changes in a specific industry,\u201d she said.<\/p>\n
EMC is also using this time to double down on investments in new technology. Lutz said the company is spending tens of millions of dollars on Research and Development (R&D) and investing in new markets. She added that this has resulted in more than 20 patents and new ways to optimize the efficiency of satellite capacity.<\/p>\n
\u201cWe have actually broken the world record here with translating more Mbps per MHz. That has a direct impact on cost savings for our customers,\u201d she added.<\/p>\n
Spytek pointed to oil and gas companies\u2019 pursuit of greater efficiency and new regulations, particularly related to safety, that are creating more need for bandwidth. While admitting the level of new activity is low, he said demand for services is there, and that ITC Global is preparing new products in cybersecurity and weather, among other areas, for its existing customer base.<\/p>\n
\u201cWhile it\u2019s not expanding, it\u2019s not shrinking either. You just have to take care of your customers. You have to do everything you can to protect your core, and then look for growth elsewhere,\u201d Spytek said.<\/p>\n
Renner Vaughn, senior systems engineer at ABB Wireless, echoed similar points, saying being part of the larger ABB company has benefited them as well.<\/p>\n
\u201cOur utilities business has actually done really well and picked up the slack for the oil and gas side of things,\u201d he said.<\/p>\n
Vaughn pointed to applications as a strong driver for ABB Wireless in the energy sector. The rise of intelligence devices and more two-way communications \u2014 trends not unique to the energy market \u2014 are boosting the need for connectivity among oil and gas customers as well. He said R&D also constitutes a major focus for ABB Wireless, as connectivity further enables oil and gas companies to \u201cengineer people off the well-pad.\u201d<\/p>\n
\u201cCommunications ties it all together,\u201d he said. \u201cEven in this environment we are still seeing a lot of investment upstream because it is making them more efficient.\u201d<\/p>\n
Spytek said ITC Global still sees major players in oil and gas investing because of the need to continue replenishing reserves. This drives them to continue looking for more resources, he said. Spytek felt that the challenge going forward in leveraging satellite will be less about increasing efficiency and more about figuring out how to make the most of the increased supply of capacity. He said the industry is already facing a supply glut, which will shape how satellite services are used.<\/p>\n
\u201cSatellite operators are struggling with what to do with their legacy payloads now that the HTS payloads are out \u2026 I think the key is for everyone to figure out what to do with the capacity,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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