| :: Ownership and investment in Being capital intensive in nature, the satellite industry offers an interesting parallel to the current debate on infrastructure investment in the Australian telecommunications sector. During its first twenty years, from about 1960 onwards, ownership in the Fixed Satellite Service (FSS) industry was dominated by the pan-governmental organisation, Intelsat. Various governments owned a number of smaller domestic operators, such as our own AUSSAT. In 1984 the first serious privately owned operator, PanAmSat, was launched. The industry bloomed in the burgeoning world demand for telecommunications services for voice and data. By the late 80’s satellites were carrying more and more content, largely in the form of TV programming. The early 90’s brought Ku-band Direct to Home (DTH) services, delivering TV programming into small residential antennas. This attracted yet more domestic satellite operators to enter the market to service their local broadcasting requirements. Around this time fibre prices started to fall, driving much of the international video traffic market from satellite onto fibre, but also stimulating demand for Internet services. Of course during the late 90’s no child could be without the Internet and for many of them their Internet service would be on satellite. Like the terrestrial sector, the dot-com boom resulted in investment pouring in as the demand for Internet exploded. Satellites were being launched at an unprecedented rate. Sadly, we all know what happened next. In the aftermath of the tech wreck the industry found itself with heavy oversupply of capacity. Unlike terrestrial networks, once the hardware was up in space it is difficult to reconfigure for alternative purposes. A typical satellite has an economic life of more than 15 years. The industry was in a bad way, with many operators making losses. Several satellite manufacturers shut up shop and a few satellite operators entered into Chapter 11 bankruptcy proceedings. In addition, a number of high profile listed entities trialing experimental technologies such as Iridium failed to prosper commercially. Striving for increased efficiencies, a wave of consolidations has passed through the industry. More recently Private Equity investment has featured prominently in the industry, indeed the world’s largest satellite company still remains in private hands. While a little too early to judge, the indications so far are that PE has contributed positively to the rapid and efficient restructuring of the industry. There are now two large operators with about 50 satellites each, and a myriad of smaller players, each searching for a niche to occupy. The industry now appears to be settling into a new phase of growth, with a number of exciting new technologies and applications on the drawing board. Glen Tindall Following more than a decade of diverse engineering and project management experience in Europe and the Middle East, Glen has subsequently held senior positions in marketing and sales within the Australian telecommunications sector. His current position is Director of Sales for SES NEW SKIES where his primary responsibilities are driving business development activities and sales revenue within Australia, New Zealand and the Pacific region. An executive director of New Skies Satellites Australia Pty Ltd, Glen has degrees in Engineering and Business, and is a member of the Australian Institute of Company Directors. |
