Some SatMex words:
The Pan-American region continues to witness tremendous growth in the market for satellite services, surging from 531 36-MHz
transponders covering that territory last year to a projected 892 by 2002. The consolidation of a borderless continental market, the
intense competition, and the rise in the number of applications with high demand potential are driving the region's rapid growth, said
SatMex's executive president, Lauro Gonzalez Moreno.
The gradual elimination of regulatory barriers and the emergence of competitive mergers and alliances, such as the Loral Global
Alliance, has made national boundaries of considerable less consequence in the last several years. In addition, regional competition
has risen as a result of a significant increase in capacity and the entry of new competitors in the region, including GE, TeleSat,
SkyNet, as well as the privatization of national governmental assets such as SatMex.
Perhaps most of all, the rise of high-demand satellite applications, including voice, rural telephony and others, demonstrate the
opportunity for consumer services the region affords. A number of industry experts believe that broadband multimedia will be one
of the largest satellite communication markets, and the application with the greatest potential. Internet access promises to be
another such application - more than 1,800 Internet service providers in the region are seeking more efficient access to the U.S.
backbone.
SatMex is moving to fill the demand with its new SatMex 5 satellite and through partnerships with Loral and Orion to provide
Internet access to Mexico, said Gonzalez. The company currently has approximately 25 percent of the transponder capacity
directed at Latin America. Intelsat sees similar opportunity in the region, and has experienced significant growth - doubling its
revenues from Latin America in the last three years.
Ruben Levcovitz, Intelsat's regional director for Latin America, said private networks accounted for more than 40 percent of the
company's business in the area. Other applications in demand include video restoration, public switched networks and cable
restoration. Internet traffic is Intelsat's fastest growing business, and accounts for approximately 15 percent of its Latin American
service market. Levcovitz attributed much of the demand for Internet services to companies seeking to bypass terrestrial system
congestion.
PanAmSat [SPOT] also views Internet applications as key to the Latin American market. The company currently provides
backbone services to Argentina, Brazil, Chile and Colombia. Alvaro Gazzolo, senior vice president for Latin America, said that in
1999 PanAmSat will add high-speed Internet access for businesses, using a 60 centimeter dish at 45 Mbps.
Deregulation and privatization are certainly favorable to satellite companies and lead to great market opportunities, said Consuelo
Sanchez-Octavio, vice president of business development for Galaxy Latin America LLC. She cited increases in regional income
and regional trade, as well as an urban population accounting for 75 percent of the people in Latin America, as key growth factors.
The average household buying power in Latin America has increased by 11.5 percent in the last several years, and is now over
the $10,000 mark. Certainly, she confided, the fact that 56 percent of the population is under 24 years of age also does not hurt.
Fidel Morales Moreno, head of marketing and sales for NahuelSAt S.A., spoke of healthy growth in the company's data business.
Rolling out first in Argentina, then Chile, then following with Brazil and the rest of the region, NahuelSAt will be hitching much of
its plans on its new Nahuel2 satellite, a hybrid C- and Ku-Band bird expected to be operational in 2001, with between 72 and 96
transponders.
Alluding to questions on capacity outstripping demand in the short term, Moreno was clear. He foresees C- and Ku-band
transponder capacity growth as closely tied to the increase in the region's demand, and believes the supply of capacity will remain
only slightly ahead of demand through 2009.
And the caveats? Although privatization, deregulation, rising competition and increased interregional trade and income augur well
for market opportunities, there still is reason for caution. Latin America is not inoculated against the Asian economic bug, and will
be adversely affected by the crisis there - Brazil already has the sniffles. In addition, the regulatory environment is not always
predictable, and consumer behavior is notoriously fickle and difficult to divine.
(Thanks to Phillips Telecom)
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