3 de Julho de 2010 | Satellite News | Mark Holmes

Star CEO Preparing to Capitalize on Energetic Latin American Market

[Satellite News 07-03-09] Brazilian satellite operator Star One is determined to become a greater force across Latin America though its Star One C1 and Star One C2 satellites and also will present plans to is board in the next two months for expanding its satellite fleet,” CEO Gustavo Silbert told Satellite News.

C1 and One C2 “have coverage outside Brazil, and we already sold some of this capacity to one new key foreign customer. I cannot say who it is, but the contract is signed and that capacity is sold,” he said. “Our movement outside Brazil is becoming significant and we are happy with that. New revenues in different currencies than the Brazilian Real will be very, important in times of financial crisis. C1 and C2 provide beams over North America, Paraguay, Uruguay, Mexico, Argentina, Chile. We are really targeting these countries, ”said Silbert.

While targeting an improved performance outside of Brazil, the company is targeting a number of growth markets such as direct-to-home (DTH) and cellular backhaul. “A number of telecoms operators are launching their DTH operations, so we were lucky we got the DTH operation from Embratel, our major customer and shareholder. Secondly, you have cellular backhaul. Mobile operators are growing very fast in our region. They are needing backhaul solutions. They don’t have the infrastructure to cope, so this is the second market I see growing very fast,” said Silbert.

High-definition (HDTV) and satellite broadband also emerging markets for the company. “We are signing some contracts with broadcasters for HD channels. Some customers, especially in Brazil, are beginning to line-up HDTV channels, creating an opportunity to sell capacity for these channels,” he said. “Finally, another potential market for us is social inclusion with broadband. Last year, Embratel won a very big project in Brazil to bring broadband access to 12,000 schools. They are using our C1 capacity to provide this broadband solution.”

Maria Velez de Berliner, president of regional analyst firm Latin Intelligence believes governments in the region could be ready to bring more expansive satellite broadband policies to reduce the digital divide. “While banks and financial institutions are doing better, large corporations that incurred heavy debts will not do well. These corporations are the major users of broadband, which has only 15 percent penetration in the region. Corporations are watching where the money goes and expansion plans are on hold. However, governments will be more willing to spend part of their stimulus packages on broadband expansion."

Velez de Berliner explained some of the regional government's need. "The governments will have to take telemedicine, long distance learning and training and social services to the unemployed in the rural ad semi-rural areas where commodities predominate. It may sound like heresy, but strategic associations between satellite companies and labor unions may be useful to expand broadband. Unions will be pounding their governments for increased social services and protections during the downturn. Unions will play a significant role in the 16 presidential and congressional elections in Latin America in 2010 and 2010,” she said.

Opportunties for Star One in Latin American are not completely free from risk, according to Silbert. While satellite broadband services to consumers has been gaining traction in the U.S., and to a lesser extent Europe, Silbert stills sees consumer broadband as a potentially “huge risk” in Latin America. “It is a risk if you consider satellite broadband a mass market solution the way you see with some Ka-satellite operators in the United states. If you have satellites just for broadband solution, costing $400 million to $600 million on a solution like that just for Latin America, it would be a huge risk. In most of the countries, you see the mobile operators are deploying broadband solutions very fast. I see the satellite as the tool to provide the capacity for the backhaul solution for cellular operators,” he said.