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TitleLatin America Remains a Hot Spot for Satellite Fleet Operators
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Latin America has been the hottest regional growth market for satellite services in the past couple of years and shows few signs of cooling down as the major fleet operators report high satellite occupancy rates and the smaller owners plot their own growth strategy there.

Direct-broadcast television, cellular network backhaul, government broadband-stimulus projects — none of these demand sectors appears to be out of breath, satellite service providers and operators said March 14 during the Satellite 2012 conference here, organized by Access Intelligence LLC.

“The problem today is that we do not have enough capacity,” said Marzio Laurenti, chief executive of satellite services provider Telespazio Brasil S.A., a regional subsidiary of Rome-based Telespazio. “The lack of capacity, in both C- and Ku-band, is the major issue I am facing.”

The major fleet operators, including SES of Luxembourg; Intelsat of Washington and Luxembourg; and Telesat of Canada, are adding satellite capacity in the region but apparently not fast enough to quench demand.

Rafael Molina, sales manager for Spanish satellite fleet operator Hispasat’s Latin American operations, said the major satellite television broadcasters in Latin America “are requesting as much capacity as we have.”

Molina said Hispasat, whose Amazonas spacecraft over Latin America have maintained high fill rates, is seeking to add capacity in the short term by using satellite bandwidth provided by another operator’s spacecraft.

Hispasat’s Amazonas 3 satellite, carrying 33 Ku-band transponders, 19 transponders in C-band and — in a first for Latin America — nine Ka-band spot beams, is scheduled for launch in 2013. But the C- and Ku-band capacity will mainly serve to replace existing capacity, he said, adding that Hispasat is preparing to launch a request for bids to build an Amazonas 4 satellite, which could be in orbit within three years.

The newly resurgent Mexican satellite operator, Satmex, has two satellites under construction — Satmex 8 from Loral and Satmex 7 from Boeing Space and Intelligence Systems — and expects to use them for expansion in Latin America. Satmex 8, scheduled for launch in August, will replace the smaller Satmex 5 satellite that is nearing retirement.

Satmex 7 is scheduled to be in service by mid-2015. Satmex has ordered another, unnamed satellite from Boeing as part of a four-satellite order made together with Asia Broadcast Satellite, an Asian operator that is expanding into Latin America.

Javier Recio, Satmex vice president of sales, said the larger fleet operators have ignored the Latin American growth story, limiting the supply of satellite bandwidth to keep transponder-lease prices high and protect against a sudden economic downturn in the region.

The lack of sufficient satellite capacity today “is the result of a history of how the big operators have managed supply and demand,” Recio said.

“Latin America has huge potential, but for some time now the big operators did not believe in the region. Africa was supposed to be the jewel in the crown. That led to today’s situation, where the market wants more capacity than we have available. As operators, we need to better manage the cycle of ups and downs,” he said.

Satmex exited bankruptcy proceedings in mid-2011 and until then was unable to persuade its owners to invest in a new spacecraft. “Satmex was not in the best shape to be launching new satellites” until recently, Recio said.

Latin America’s largest satellite fleet operator, Star One of Brazil, is weighing whether to order a C-band-only satellite to meet demand for cellular network backhaul, Star One General Director Lincoln Oliveira said.

Dolores Martos, vice president for commercial sales in Latin America for SES, said the company fully understands that Latin America needs more capacity now and is developing the 67 degrees west orbital slot to add to its current coverage in the region.

SES moved one aging satellite to the 67-degree slot in 2010 and earlier this year added another in-orbit spacecraft, the AMC-4 to the same position. The SES-6 satellite, planned for launch in 2013, will further add to SES’s ability to cover Latin America as it has sufficient capacity to serve new customers in addition to replacing the NSS-806 satellite at 40.5 degrees west.

Martos said substantial Ku-band capacity over Latin America could be freed up if government broadband programs move to Ka-band. When and if Ka-band will catch on in Latin America, she said, is unclear despite the Hispasat Amazonas-3 capacity, which will be directed over major metropolitan areas.

“Ka-band will be the future” for broadband in Latin America, Martos said. “How to get there from here is the question.”

Hughes Network Systems, owned by EchoStar of Englewood, Colo., and Eutelsat of Paris have both recently won Brazilian government auctions that include Ka-band licenses. Both companies operate high-throughput Ka-band satellites in the United States and Europe, respectively.
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