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Technology Stocks : Loral Space & Communications
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To: DMaA who wrote (3929)7/6/1998 12:41:00 PM
From: Valueman  Read Replies (1) of 10852
 
Merrill Lynch recently mentioned the possibility of Loral trying to "buy into" Intelsat/New Skies. I have no idea if this will come to pass, and if it does, what exactly will be the arrangement, but here are some compelling figures. A study on the satellite internet ISP/backbone market(a summary exists at spotbeam.com) estimated the present market at only $70.5 million. Intelsat had 64%, Orion 19%, and SatMex 6%. The future?

"Current market Opportunity is in ISP Links: In provision of bent-pipe capacity for linking ISPs with US backbone infrastructure and intra-regional backbone capacity, they have scored a major success. Within the last two years they have leased the equivalent of thirty-three 36 MHz equivalent transponders, either directly to end-users or to major or specialised carriers.

At the time of writing at least another 20 full transponders on current or near-to-launch satellites were earmarked for such traffic. We estimate that the size of the market for transponders for such traffic is doubling every five months. We estimate that by the year 2002, this market could be worth between $750 million and $2.5 billion a year to satellite operators."

So you can see that any joining of forces would unite three of the top four satellite internet carriers under one roof(PanAmSat is the other). Orion will be even better positioned with Orion 3 and their Hawaii gateway, as will SatMex with the launch of the powerful SatMex 5. This is a possible increased revenue source that remains completely unrecognized.
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