By Jeffrey Hill<\/p>\n
The global satellite industry will experience a measured comeback after faring well in a tough economic environment, according to analysts and executives on SATELLITE 2010\u2019s SWOT wrap-up panel session.
\n Keith Volkert, CEO of Satellite Consulting, said the satellite industry rests in a comfortable position. \u201cIt\u2019s quite clear that the industry is healthy, despite the economic downturn. I get the feeling from the big four [FSS operator CEOs] that we\u2019re in good shape.\u201d
\n TelAstra President Roger Rusch said while satellite is poised for growth in 2010, the upswing would not be as dramatic as they have been in the past.\u201cI think we\u2019ll see a measured comeback, but the industry will have new issues and challenges to face. I think that we will have to be concerned about overcapacity problems in the future. When things are going well, satellite companies tend to buy more. I look at the recent orders from SES and Intelsat and it definitely looks like expansion. We don\u2019t want a repeat of a situation where companies order too much and then realize it too late. That\u2019s how we end up with shortage of orders for a year or two, which affects manufacturers,\u201d he said.
\n Gilat Network Systems CEO Erez Antebi, agreed with Rusch and said the health of the satellite industry differs between the space segment and sectors operating on the ground. \u201cWe have two different industries. The space industry has made a killing. The ground segment providers are actually part of the telco business, and we have not done as well as the satellite business. The question for us is, \u2018How much longer will the ground segment overpay for overcapacity in the sky?\u2019\u201d
\n For the U.S. satellite industry, panelists said the market\u2019s health would depend on changes in government regulation, specifically, International Traffic in Arms Regulations (ITAR) laws. When it comes to ITAR, Volkert is skeptical. \u201cI was disappointed with what I heard from the ITAR panel at this convention, because I don\u2019t think we\u2019re going to get the near-term change that we need. As an American, I believe in national security, but its absurd how ITAR laws are implemented and how they apply to our industry,\u201d said Volkert.
\n Brian Weimer, a partner of the Sheppard Mullin law firm, which specializes in policy and acquisition law, explained why the U.S. government might not budge on ITAR laws. \u201cI don\u2019t think we\u2019re going to see ITAR changes, because nobody in Congress will want to be the one that publicly justifies [any relaxing of] national security. It\u2019s not politically correct, whether you agree with national security or not. It\u2019s the same situation for FCC indecency rules. Nobody in Congress will stand up and say \u2018I\u2019m for indecency.\u2019 However, the consequences of not changing these standards are also the same. Both the FCC and ITAR regulations have driven business to other countries,\u201d he said.
\n Rusch believes ITAR laws can be adjusted outside of the legislative branch. \u201cIn the last 20 years, we\u2019ve been engaging in globalization, and we see that every country\u2019s interests go in different directions. To change these laws in order for the United States to compete, it is the responsibility of the administration that implemented ITAR, in this case, the president and the executive branch,\u201d he said.
\n While panelists agreed over the scenario of developed markets, the future of the markets in developing countries and the strength of the mobile industry prompted sharp debate. Antebi predicts that the mobile segment will thrive in emerging markets. \u201cIn regions like Africa and the Middle East, mobile is used as a viable alternative to fixed. It\u2019s cheap and easy to deploy. We\u2019re seeing that people will walk to a GSM location to use these services, and I think the fixed segment is too expensive and is going down dramatically.
\n Richard Forberg, vice president of marketing for STM, warned panelists not to underestimate the economic potential of these regions. \u201cIn emerging markets, economics is the only barrier, but the economic driver has to be there. A lot of people in these markets don\u2019t have their own computer, so we can\u2019t keep thinking in terms of how a developed country\u2019s market functions.\u201d
\nRusch pointed out the similarities between the developed and emerging worlds. \u201cThe nature of the way the entire world communicates has shifted over the last 20 years. Every market seems to be shifting from voice services to texting. Just look at how some of the mobile companies are suffering because they keep focusing on voice. People, in general, are changing the way they communicate.\u201d
\n Panelists also discussed the potential shot in the arm that the FCC\u2019s broadband plan could give the MSS sector. Weimer acknowledged that when it comes to broadband funding, satellite is at a natural disadvantage. \u201cThe issue for the U.S. government in the broadband argument has always been speed, and I think they look at satellite as not being able to deliver that. MSS and other satellite companies need to move the issue away from speed to ubiquity,\u201d he said.
\n Rusch believes the broadband plan does not fix other more important problems for the MSS sector. \u201cI have been skeptical of the rapid MSS growth. The industry has only grown 2 percent over the last few years, and Inmarsat is the only profitable company. I think this is a limited market. I think there will always be a role for it, but I think there are too many players and too much capacity. I think terrestrial is going to roll out all over the world.\u201d
\n Volkert disagreed with Rusch and pointed to possible consolidations as a way to increase the room for growth, but Weimer said the FCC presents a serious obstacle. \u201cI don\u2019t think the FCC will allow consolidation right now. For example, look at the Sirius XM merger. If we\u2019re talking about the possibility of TerreStar and ICO merging, the two companies will have to present themselves as a mobile provider with an ATC component. That turns the consolidation question back to the Sirius XM merger, where the competition was found to exist between mobile and terrestrial and not between mobile companies themselves,\u201d he said.
\n The panelists added that the impact of 40 flexible regulation in the FCC broadband plan have yet to be determined.<\/p>\n","protected":false},"excerpt":{"rendered":"
By Jeffrey Hill The global satellite industry will experience a measured comeback after faring well in a tough economic environment, according to analysts and executives on SATELLITE 2010\u2019s SWOT wrap-up panel session. Keith Volkert, CEO of Satellite Consulting, said the satellite industry rests in a comfortable position. \u201cIt\u2019s quite clear that the industry is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-87232","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/87232"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=87232"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/87232\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=87232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=87232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=87232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}