Government’s Emphasis Should Be Connectivity, Not Speed, Say Satellite CEOs

Governmental plans for broadband deployment in the U.S. and other countries should emphasize universal connectivity rather than a limited population’s reaching the highest speeds, David McGlade, Intelsat’s said Tuesday on a panel at the Satellite 2010 conference in National Harbor, Md. Speeds as high as 100 Mbps, although reachable, make sense only for the densest regions, he said.

Michel De Rosen, Eutelsat’s CEO, asked “what is more important on a social and economic basis, achieving 50 percent connectivity at 100 Mbps” or 100 percent connectivity at 10 Mbps? “We are convinced a revolution is under way” in rising broadband speeds, he said. Increased speed has already affected how satellite operators do business, said SES’ CEO, Romain Bausch. He said telcos are looking at costs per bit and sometimes deferring to satellite for TV service rather than give up broadband capacity for it. McGlade said Intelsat has begun looking at how it can better serve its customers whose businesses are moving bits quicker, looking for improvements in compression algorithms and other technological advances.

North America probably will have slower growth in transponder capacity than emerging markets like Asia and Africa over the next year, said McGlade and Bausch. But Telesat CEO Dan Goldberg said the company’s blue-chip customers in North America, such as direct-to-home (DTH) providers, should continue to provide the company healthy revenue. He sees Telesat’s growth and thinks “maybe we are not having a nuanced enough discussion,” he said. “Look at our growth. A lot of that is coming from North American DTH."

SES will continue to concentrate on expansion of European DTH, which continues to grow on the back of HDTV, said Bausch. Some regions in Europe are like the “Wild West,” with as many as six providers selling DTH services. Bausch called the competition unsustainable and said he expects consolidation soon. Eutelsat will seek to increase its business in Asia in coming years, said De Rosen.

The recent trend of high fill rates and efforts to increase capacity in emerging markets through new satellites could produce overcapacity, cautioned Bausch. “Our approach is different” in adding capacity -- disciplined, said McGlade. “Our capacity will be relatively flat. We have been improving the quality of capacity” and customizing satellites, investing based on where the fleet’s needs have been.