Intelsat has had a presence in Latin America since 1964. With nearly 600 million inhabitants, Latin America is among the fastest growing and diverse regions in the industry. We asked Carmen to take a few minutes to answer some questions about LATAM to help us all better understand Intelsat's opportunities and challenges in this dynamic region.
Can you provide a brief history of Intelsat in Latin America?
Latin America is an integral part of Intelsat's history since the beginning days of the Satellite history. Intelsat was one of the first companies to introduce satellite service to the region back in the 1960's. We were also the first to broadcast the Olympic Games to the region from Mexico City in 1968. The first to support a true LATAM DTH platform in the region and the first to bring cellular backhaul services to Latin America.
What is Intelsat's business position in Latin America today?
Currently, we have over 10 satellites covering the region and more than 300 customers. Our customers provide over 400 channels of video programming to thousands of cable headends across the region. In addition, we service approximately 25 mobile operators. And thanks to all of our customers, we are the largest provider of these services to Latin America and the Caribbean. In fact, in a recent customer survey, we received some of the highest scores across the company for customer satisfaction.
How do you effectively service such a large region?
Most people don't realize that we are not just a sales office in Miami; we are a regional office for Latin America and the Caribbean. Several of our key support departments are co-located here. In addition to the sales team, we have our Customer Solutions Engineers (CSE's) with one CSE in Rio de Janeiro. Our LATAM Regional Sales Support team and the Legal/Contracts team work side-by-side in the sales process. We also have Special Events expertise in Miami as well to assist customers in the provision of key events throughout the region.
We also have two additional offices in the LATAM Region&mdash Mexico City and Rio de Janeiro—that specialize in meeting the needs of our specific customers. So we have an intimate knowledge of the region, including its opportunities and challenges for the future.
What does Intelsat see as the growth areas for the region?
DTH and media represent an important market for us to focus on in 2010. We also see a growing demand for broadband mobile applications across the region over the next several years.
Is DTH considered one of the higher growth applications in the region?
New research by NexTVLatam also indicates that Latin American DTH operators will triple their subscribers within the next few years as telecommunications operators expand their multiple service offerings to include a video component. The report also notes that Brazil, Mexico, Argentina and Venezuela will record the greatest client markets and América Móvil, Embratel, Oi, Telefónica and Telmex will play a key role in that growth.
Finally, we expect our customers to increase significantly their offerings in mobile content and wireless broadband in the six largest Latin American markets - Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. We also expect cellular backhaul services to become the most dynamic contributor to our customers' total mobile revenue growth in the coming years. In fact, it is forecasted that mobile broadband revenue in the region will grow some 38 percent by 2014.
Why is capacity in Latin America so tight across the industry right now?
It's essential to first understand what has transpired in this region's economy. A number of satellite operators scaled back capacity when Latin America and the Caribbean were struggling in 2005-2007. Since then, the story has changed dramatically. The recession that has impacted much of the world has only "lightly touched" the region, as it did not experience the full weight of the credit crisis. GDP in the region is up to a healthy 6 percent – 9 percent annually.
This backdrop is key to explaining the increased demand in the region. Penetration in fixed and mobile broadband into both homes and small businesses across the region is expected to reach 75 percent by 2015. That's a remarkable number! Governments across the region are also enforcing Universal Access and are building out their rural infrastructures.
So what are the estimates for annual satellite demand in the LATAM Region?
According to a recent Northern Sky Research report, demand for satellite capacity in the LATAM Region is growing at a rate of six percent a year. In addition, the population is growing rapidly and now stands at nearly 600 million people, almost twice that of the U.S. So it is a combination of factors that make this region so attractive.
What is Intelsat doing to bring new capacity to the region?
We started the year with a bang as the first launch for Intelsat was Intelsat 16. The entire payload is dedicated to DTH and this is indicative of what is transpiring in the region. The IS-16 satellite will provide expanded capacity for SKY Mexico's direct-to-home platform, including expanded HD programming and will also provide backup capacity for SKY Brazil.
In 2012 we plan to launch three new satellites that provide coverage for Latin America and the Caribbean that will enhance our coverage for media and DTH services.
- Intelsat 21 will replace Intelsat 9 at 302°E as Intelsat's blue-chip satellite for broadcast and cable customers across Latin America. The satellite will cover the Americas, Western Europe and parts of Africa.
- We are also working on a replacement for IS-805 at 304°E. Our current design features Ku-band transponders with one beam dedicated to Brazil's strong DTH and network growth. Its second beam will be switchable between Colombia and Venezuela, and its' C-band payload will be dedicated to cable distribution and HD channels as well as serve as a backup for its sister satellites in the region.
How about network services?
We have some exciting things to talk about there as well:
- Intelsat 21's Ku-band will enhance capacity for Mexico, Brazil and Mobility services such as maritime, aeronautical and off-shore requirements across the Atlantic to Europe and the west coast of Africa.
- Intelsat 23, meanwhile, will replace Intelsat 707 at 307° and will provide follow-on Ku-band capacity for Latin America and additional C-band coverage for some of Intelsat's large telephony customers in the Americas.
- Additional Ku-band capacity on Intelsat 27 will also be switchable between North Atlantic Mobility and the Gulf of Mexico's off-shore oil and gas facilities.
So 2012 will be a very exciting year for us in the LATAM Region. We're actually starting to get ready for it now.
Can you tell us a bit about Latin America's involvement in Special Events and what the potential growth areas are for the region?
Special events, such as the Olympics and World Cup, are overseen by our Special Events team and they are historically important resources for our customers. This year it's the World Cup from South Africa. Typically, the LATAM Region accounts for about half of the total revenue for these types of events. We are very excited and focused in the near term where we have a tremendous opportunity such as Brazil is the host nation to both the 2014 World Cup and 2016 Olympic Games.
How will IntelsatONESM benefit Latin American customers?
IntelsatONE is Latin America's gateway to the rest of the world. The MPLS IntelsatONE fiber network complements our teleports that currently support the Latin America region, such as our Atlanta teleport, which is our gateway to Latin America, as well as other teleports, such as Riverside, Napa and Mountainside. They all support services to and from Latin America, including media and DVB-S data services. Our goal is to create an infrastructure that will provide our Latin customers with extensive connectivity and platform options—especially important as our customers begin to plan for the 2014 World Cup and 2016 Olympics that will be held in Brazil.
The Latin American customer conference, Connections, is scheduled for late September. What are some of the key topics that will be discussed there?
Connections will take place in Buenos Aires, Argentina from 27 to 29 September 2010. Most of our senior management team will attend and the agenda includes plenty of opportunities for our customers to have 1-1 sessions with our key executives. We also plan to include detailed presentations on Intelsat's
upcoming 2012 launches, IntelsatONE, new satellites, Mobility, Intelsat's Interference Initiative—I3, global fleet presentation and Network & Operations updates. In late August, Intelsat LATAM will staff a booth at the SET Broadcast and Cable Show in Brazil.
Carmen Gonzalez-Sanfeliu is Regional Vice President, Latin America & Caribbean Sales for Intelsat and is based in Coral Gables, Florida.
Peter Malia is widely published and writes for Intelsat on a freelance basis. He is based in Monroe, Connecticut.
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