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Satellite ServicesA Lo t o n t h e i r P la t e

Worldwide Satellite Magazine Vol. 4 No. 11March 2007

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SATMAGAZINE.COMMarch 2007

Vol. 4 No. 11, March 2007

TABLE OF CONTENTSClick on the title to go

directly to the story

COVER STORY

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REGULAR DEPARTMENTS

By Claude Rousseau By Michael Fleck

28 / US Sat- Radio:35m subsby 2015?

The Asia-Pacific region isgrowing and so is thedemand for occasionalsatellite services. However,it takes some local savyyto be able to be successfulin this region.

by Chris Forrester

3 / Notes from the Editor

4 / Calendar of Events

5 / Featured Event: ISCe 2007

6 / Industry News

10 / Executive Moves

15 / New Products and Services

35 / Vital Statistics

36 / Market Intelligence: Oil & Gas

40 / Advertisers’ Index/

Stock Quotes

by Jeffrey Carl

FEATURE

31 / New VSATBackup SolutionEnsures BusinessContinuity

23 /19 / Satellite ServingBandwidth toHungryCellularOperators

Satellite bandwidth andequipment is proving to be astrong ally to the mobileoperators around the globewho strive to expandcoverage to ever fartherreaches of the Earth.

With the announcement ofXM and Sirius proposedmerger, what future doessatellite radio have inNorth America?

CASE

Major U.S. oil companies arediscovering the value of VSATas a backup connectivityplatform.

STUDY

Occasional Usein the AsiaPacific Region

Communications in 2007:Industry’s “Interactive” Analysispresented by the GlobalVSAT Forum

SATMAGAZINE.COM

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March 2007

Satnews Publishers is the leadingprovider of information on theworldwide satellite industry. Foremore information, go towww.satnews.com

Cover Design by: Simon Payne

Cover photos courtesy of LamitCompany/ ATCi, Samsung,Comtech EF Data, BroadcastAssociates and Agiosat/PatriotAntennas.

Published monthly bySatnews Publishers800 Siesta Way,Sonoma, CA 95476 USAPhone (707) 939-9306Fax (707) 939-9235E-mail: [email protected]: www.satmagazine.com

Baden WoodfordContributing Writer, Africa

Jill Durfee([email protected])Advertising Sales

Copyright © 2007Satnews PublishersAll rights reserved.

EDITORIALSilvano PaynePublisher

Virgil LabradorManaging Editorand Editor, North America

Chris ForresterEditor, Europe, Middle Eastand Africa

Bernardo SchneidermanEditor, Latin America

Peter GalaceEditor, Asia-Pacific

John Puetz, Bruce ElbertDan Freyer, Howard GreenfieldContributing Writers,The Americas

David Hartshorn, Martin JarroldContributing Writers, Europe

NOTE FROM THE EDITOR

Are They Sirius?

(

The big news at the recently-concluded SAT 2007show in Washington, D.C. was the proposed

merger of US satellite radio giants XM and Sirius Satellite.Unlike other big announcements of late, this one was metwith a lot of skepticism. The consensus seems to be thatit has no chance of clearing regulatory hurdles, given thattheir respective licenses comes with the provision that

they are not to take over the only two US satellite radio licenses issuedby the FCC. Yet XM and Sirius, which have both not posted a profit fromtheir operations despite signing up more than 14 subscribers in recordtime, persisted in their merger plans even as it looks doomed from thevery beginning. The merger is probably inevitable, with a finite numberof potential subscribers out there and due to intense competition fromeach other on radio talents such as Howard Stern’s reported $500 millioncontract with Sirius that has certainly impacted on their bottom line.

But if the recent FCC decisions on similar mergers such as the DirecTVand Echostar Direct Broadcasting Service (DBS) venture is anyindicator, regulatory authorities in the US frown upon such monopolies.But XM and Sirius are arguing that they are really not so much ascompeting against each other but against the hundreds of millions ofunits of terrestrial radio, PCs, PDAs and other wireless devices such asiPods which all are capable of receiving audio programs. They may havea point there. Its not going to be easy to convince the FCC, but it willcertainly be very interesting to see how this pans out.

Meanwhile, with the success of SatMagazine, which we are now goingon our fourth year, we will start a new quarterly publication at the end ofthe month focusing on the growing military satellite market.Milsatmagazine.com will be the first and only publication focusing on themilitary satellite market. Watch out for it.

Article Contributions to SatMagazineSatmagazine accepts article contributions from the industry. Weencourage contributions that deal with issues affecting theindustry as opposed to company or product-specific articles. Weare specifically interested in case studies, opinion (op-ed) pieces,features or market studies and trends. To submit proposals forpossible articles , send a one-paragraph or less abstract of theproposed article or to obtain more information on our editorialcalendar, publishing guidelines and deadlines, please send an e-mail to [email protected]

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Mar. 5-6, London, UKThe Connected HomeDee AnthonyTel: +44 1173 116 220 / Fax: +44 1173 116 221E-mail: [email protected] Web: www.the-connected-home.co.uk

Mar. 5-7, London, UKIPTV World ForumIan JohnsonTel: +44 1173 116 223 / Fax: +44 1173 116 221E-mail: [email protected] Web: www.iptv-forum.com

Mar. 5-8, George Washington UniversityWashington, D.C., USAPlanetary Defense ConferenceTel.: 310.336.5000 / Fax: 310.336.7055Web: http://www.aero.org/

Mar. 6-8, Dubai, UAECABSAT 2007Web: www.cabsat.com

Mar. 7, London, UKTV over NetIngrid AnusicTel: +44 1173 116 220 / Fax: +44 1173 116 221E-mail: [email protected] Web: www.tvover-net.com

Mar. 7-8, Brussels, BelgiumMilSpace 2007: Planning, Funding & StrategiesTeri Arri Tel: +44 (0) 20 7827 6162E-mail: [email protected] Web: http://www.smi-online.co.uk/events/overview.asp?is=1&ref=2539

Mar. 12-16, Johannesburg, South AfricaSatCom Africa 2007Brian ShabanguTel: +27 11 463 6001 / Fax: +27 11 463 6903Email: [email protected]: www.satcomafrica.com

Mar. 20, Chantilly, VA, USAAviation Week Laureate AwardsLydia Janow, CMPTel.: 800-240-7645 or 212-904-3225Fax: 212-904-3334E-mail: [email protected]:www.aviationweek.com/conferences/

Mar. 21-23, Nanyang Technological University, Singapore3rd Asian Space ConferenceTimo Rolf BretschneiderPhone: +65 – 6790 6045 / Fax: +65 – 6792 6559E-mail: [email protected]: http://pdcc.ntu.edu.sg/ASC2007

Mar. 20-22, Washington D.C.., USACalifornia Space WeekTimo Rolf BretschneiderPhone: +65 – 6790 6045 / Fax: +65 – 6792 6559E-mail: [email protected]: http://pdcc.ntu.edu.sg/ASC2007

April 10-13, Coex, Seoul, Korea25th AIAA International Communications SatelliteSystems Conference (ICSSC-2007)“Evolution Toward a Ubiquitous Network Society”Anna KimAPSCC secretariatTel: +82 2 508 4883~5 / Fax: +82 2 568 8593E-mail: [email protected]: http://www.icssc2007.com

April 11-13, Istanbul, TurkeyCaspian Telecoms 2007Elena Peredel’skayaTel : + 44 (0) 20 7596 5205 / 5000Fax : + 44 (0) 20 7596 5208E-mail : [email protected]: www.caspiantelecoms.com/

April 14-19, Las Vegas, NV, USANAB 2007Tel: (202) 429-5300 / Fax: 202 429 4199Email: [email protected] / Web: http://www.nab.org/

MARCH

APRIL

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March 2007

FEATURED EVENT

The ISCe 2007 Conference Program has been streamlined byorganizers to better focus on key markets addressed by the

satellite industry. “This year ISCe’s ̀ gone vertical.’ said ISCeChairman David Bross. “ I have streamlined the program intothree full days (rather than 3-1/2 days) and focused each day ona particular vertical market. I also have trimmed the exhibition totwo days and focused much more time in the program on exhibit-only opportunities,” he added.

Now in its sixth year, Hannover Fairs, USA will be holding the6th Annual ISCe Conference and Expo from June 5-7 at the samevenue last year, the San Diego Hilton Resort in San Diego,California.

On Day One (June 5) the World Teleport Association (WTA) andGlobal VSAT Forum (GVF) are coming together to produce, aday-long track of sessions titled: ̀ Profiting from HybridSolutions: How SatelliteUsers and Service ProvidersIntegrate Satellite Into Fixed,Mobile and WirelessCommunications.’ Thesesessions will provide theattendee with a high-levelexploration of opportunities,discuss technical challengesand how they are overcomeand offer case studies offield-proven applications inSatcoms.

On Day Two (June 6) ISCe is, again, presenting—in conjunctionwith The Carmel Group—the 12th Annual Five BurningQuestions Seminar along with the Cable, Satellite & TelcoEntertainment Forum. This day is designed specifically for thosecompanies that do business in the profitable worlds of consumerservices, SME and SoHo markets and in broadbandcommunications of all types. “All of the content on this day willbe exclusive to this marketplace segment, hence the verticalnature of the program, and will feature many more generalsessions, said Bross.

Finally, on Day Three (June 7) ISCe will present its annualMilitary & Government Requirements Forum. This is the largestone-day forum on the West Coast dedicated solely to the

interplay between the commercialcommunications satellite industry and themilitary. As with the program on Day Two, thisis day is organized for those companies that dobusiness with the Defense Department, U.S.and foreign governments and the FirstResponder Community. “The day will featurekeynotes with from top military leaders,exclusive general sessions and a streamlinedprogram which promises direct access to themovers and shakers in this field. This is anISCe signature program,” said Bross.

“Whether you are an executive from thesatellite industry, cable TV business, a contentprovider, equipment manufacturer, end user ofservices or a competitor (cable TV or telco

executive),ISCe 2007 isthe meetingplace togain thecompetitiveintelligenceon where the converged,hybrid telecoms marketplaceis headed in a relaxedatmosphere filled with

networking opportunities, a world-class exhibition and a must-attend program. There is no other event like this in the UnitedStates,” added Art Paredes, Chairman of ISCe organizer,Hannover Fairs, USA.

“ISCe is an intimate, vertically-integrated show that providessenior executives access to the highest-level executives in themarketplace along with unequaled social and networkingopportunities via the conference program, bustling exhibition,SSPI Beach Blast (now in its second year) and the signature ISCeAwards Dinner Program and International Reception,” concludedBross.

For more information on ISCe 2006 Conference and Expo contactthe Conference Chairman, David Bross at +1-301-916-2236 ore-mail at: [email protected] or go to www.isce.com

ISCe 2007 Conference to Focus onSatellite and Hybrid Network Solutions

ISCe Conference and Expo 2007

June 5-7, 2007, San Diego Hilton Resort at Misson Bay, California

SM

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INDUSTRY NEWS

Sirius/XM Merger: FCCRoadblock Ahead?

WASHINGTON D.C. –– For Sirius Satellite Radio and XMSatellite Radio, which announced a $13 billion merger amidinvestor concern and analyst’s skepticism, job number one isconvincing the Federal Communications Commission (FCC) thedeal isn’t the “M” word in disguise. The merger of the only two players in the decades old subscrip-tion satellite music industry has given rise to an entity—as yetwithout a company name—with a combined market capitaliza-tion of over $6 billion and 14 million subscribers between them.The deal will create a nationwide audio entertainment providerwith combined 2006 revenues of $1.5 billion. Neither companyhas returned a profit from its operations, however. The companies said they had entered into a definitive agree-ment to combine their radio operations in a tax-free, all-stockmerger of equals with a combined enterprise value of $13 billion.Under the deal’s terms, XM shareholders will receive a fixedexchange ratio of 4.6 shares of Sirius common stock for eachshare of XM they own. Sirius and XM shareholders will eachown 50 percent of the new company. The new entity, which will be headed by Sirius chief executiveofficer Mel Karmazin and XM chairman Gary Parsons in theirold positions, will command seven in-orbit satellites, of whichfive remain active. The newest in this combined fleet, XM-4,was last week sold to a trust by XM for $289 million to pay offmortgages and restore liquidity. The partners will have a tough time convincing the FCC theyhaven’t created a monopoly, according to some analysts. TheFCC must first approve the merger and that’s a big if since bothXM and Sirius are the entire satellite radio market. FCC rules clearly state that one satellite radio provider cannotbuy the other one. That rule could be waived, however. Amerger would also have to win antitrust approval from theDepartment of Justice. “Obviously the Commission will evaluate any transaction filedto make a determination whether or not approval would be inthe public interest,” said FCC chairman Kevin Martin in astatement. “The hurdle here, however, would be high as theCommission originally prohibited one company from holdingthe only two satellite radio licenses.”

“The companies would need to demonstrate that consumerswould clearly be better off with both more choice and affordableprices,” Martin said. “The hurdle here, however, would be highas the Commission originally prohibited one company fromholding the only two satellite radio licenses. The companieswould need to demonstrate that consumers would clearly bebetter off with both more choice and affordable prices. “ Last January in Washington, Martin said the two satellite radiocompanies would not be allowed to merge under currentregulatory rules.

SES Restructures; GE Exits

BETZDORF, Luxembourg –– SES said it will re-acquire the19.5 percent stake held by General Electric Co. for $1.63 billion(EUR 1.24 billion) in assets and cash in a restructuring bid toboost earnings per share and optimize assets.

Under the agreement, SES will contribute certain assets andcash to a new company called SES International Holdings, Inc.(SIH) and exchange shares of this company for GE’s entireholding of 103,149,900 shares in SES, subject to satisfaction ofcertain closing conditions.

GE will exchange its shareholding in SES for shares in SIH,comprising assets and $722 million in cash, subject to certainclosing adjustments. The assets of SIH will include the AMC-23satellite and its related business; 100 percent of Satlynx; 49.5percent of Bowenvale (representing a 34.1 percent interest inAsiaSat); 19.99 percent of Star One and 5.5 percent of Orbcomm.SES has agreed to pay an equivalent of $15 (EUR 12) for eachexchanged share, resulting in a total transaction value of $1.63billion. The cash amount and the transaction value may beincreased by some $59 million depending on the closing date.The transaction is expected to close by the second quarter ofthis year.

Romain Bausch, President and CEO of SES, said GE’s exit willallows SES to meet two business objectives: restructuring andoptimizing its portfolio of assets following the New Skiesacquisition and removing the GE share overhang.

“The transaction will significantly boost earnings per share in2007 and beyond, as well as taking the free float up to close to70 percent. Using a combination of assets and cash as consid-eration will allow the company to leverage its balance sheetwhile maintaining its investment grade credit rating. We areconvinced that this transaction will both deliver significant

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additional value to the SES shareholders and strengthen thegroup’s capability to roll out its business strategy moreefficiently in Asia and Latin America.”

The acquisition of SES New Skies in March 2006 added to theSES fleet five 100 percent owned satellites over Asia, Africa andLatin America (NSS-806, NSS-7, NSS-703, NSS-6 and NSS-5).These satellites are in addition to the spacecraft already ownedthrough participations in AsiaSat and Star One, as well as thethree other 100% owned assets (AMC-12/ASTRA 4A, AMC-23and AAP-1), which have comparable coverage and serve similarbusiness purposes to some of the New Skies satellites.

This created an opportunity to restructure and optimise SES’business assets and portfolio of minority participations whichled to the decision to divest from the shareholdings in AsiaSatand in Star One, as well as to dispose of the AMC-23 satelliteoperated over the Pacific Ocean Region.

With SES New Skies generating most of its revenues in thegovernment and enterprise infrastructure segment, SES has alsore-evaluated the relevance of certain of its satellite end-to-endmanaged service activities in the enterprise market. As a result,SES decided to divest from Satlynx, the group’s end-to-endmanaged service entity. There will now be an increased focus ofthe SES service business on media and government applica-tions.

Boeing Hit by Lawsuits OverFailed Satellites WASHINGTON –– Telesat Canada and Japanese firm SpaceCommunications Corporation are suing the Boeing Company fora combined $610 million in damages related to alleged malfunc-tions in the BSS-702 model satellite made by Boeing’s SatelliteInternational, Inc. and a failed orbital insertion. Boeing said the

http://www.comtechefdata.com

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claims in both lawsuitswere without merit. Telesat Canada, thesatellite unit of Canadiantelecommunicationscompany, BCE Inc., andits insurers are suingBoeing for $385 millionin damages and $10million in lost profits forthe failure of its Anik F1satellite, a Boeing 702model. Telesat Canadafiled an arbitration orderagainst Boeing inNovember 2006 and anaction in a Canadiansuperior court inDecember 2006. On the other hand,Space CommunicationsCorporation’s insurersare suing Boeing’ssatellite unit for $215

million related to a bungled 2004 launch of Japan’s Superbird-6satellite. Space Communications’ insurers filed an arbitrationrequest on Dec. 1. Superbird-6 was allegedly damaged in loworbit after the 2004 launch. Several early model 702 satellites such as Anik F1 allegedlyfailed after having problems with their solar panel cells. Industrysources said six Boeing 702 models have failed in orbit due tolong-term power loss from a degradation of their solar concen-trators: Anik F1, Galaxy 11, PAS 1R, Thuraya 1, XM 1 and XM 2. They said Anik F1 suffered from a generic failure of the earlyBSS-702 model: fogging of the concentrator mirrors on the solararrays that led to reduced available power. The first version of the 702 used solar arrays with concentra-tors. These concentrators tended to early fogging, leading toreduced operating lifetimes. The outgassing of the solar cellswas higher than expected due to an inherent design flaw. Theflaw was corrected in later versions with higher power triple-junction gallium arsenide solar cells. Anik F1 was launched on November 21, 2000 by an Ariane 44

rocket from the European Space Agency space center atKourou, Guiana. The primary customers are the CanadianBroadcasting Corporation, Star Choice, Chum Limited andCanadian Satellite Communications, Inc. Anik F1 will bereplaced by Anik F1R.

Teal Group Says Satellite Marketon Growth Curve RESTON, Virginia –– The Teal Group believes the commercialsatellite industry is on the verge of growth cycle that mightextend until well into the next decade. “Last yearmarked thesecond con-secutive year ofgrowth in thenumber ofcommercialcommunicationssatelliteslaunched togeostationaryorbit,” saysMarco Caceres,Teal Groupsenior spaceanalyst. “Thishasn’t hap-pened in at least the past 20 years, and it may signal the start ofan up cycle for the overall market.” Teal also estimates orders for more than 200 geostationarycommercial communications satellites worth more than $25billion through 2016. Orders for more than 100 low earth orbitmobile communications replacement satellites are expected to begenerate up to $4 billion in business. Next-generation U.S.military satellite programs are estimated at a total cost of $100billion. Teal Group is a defense and aerospace market analysis firmbased in Fairfax, Virginia, USA. It provides competitive intelli-gence to industry and government worldwide. Teal will present future trends in the markets for satellites, civiland military aircraft, aero turbine engines, UAVs and defenseelectronics at the Aerospace Markets forum presented by theAmerican Institute of Aeronautics and Astronautics (AIAA) on

The Boeing 702 modelspacecraft, called NSS-8, wasdeclared a loss when the SeaLaunch Zenit-3SL vehiclecarrying the satelliteexperienced an anomalyduring the launch on January30, 2007. (Boeing photo)

Teal estimates more than 200commercial satellites manufacturedthrough 2016. (SS/L photo)

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INDUSTRY NEWS

March 6 in Washington, D.C.

InvestigationBegins into SeaLaunch RocketExplosion

LONG BEACH, Calif. –– TheOdyssey Launch Platformreturned to its homeport here tobegin repair work and a start tothe investigation as to thecauses behind the destructionof the $300 million NSS-8satellite at lift off last January30. The Odyssey and its sistership, Sea Launch Commander,are moored together followingtheir return. In a statement SeaLaunch said plans for repairs onthe vessel are moving forwardas is the investigation into theunsuccessful launch. The company said initial stepsto identify the cause of thefailure were being taken and itsinternational partners wereplanning an independentinvestigation. The partners’findings will be reviewed by anoversight board led by KirkPysher, vice president and chiefsystems engineer for SeaLaunch. The cause of the destruction ofthe Zenit-3SL rocket might havebeen a LOX feedline ruptureand valve failure leading to aLOX tank pressurization failure.The rocket’s RD-171 engine hasbeen cleared of causing thefailure. The blast destroyed both the

three-stage rocket and the Boeing-built NSS-8 owned by SESNew Skies. A flame deflector below the launch pad was lost anddoors to the platform’s hangar were unhinged. SM

http://www.advantechamt.com

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EXECUTIVE MOVES

Northrop Grumman Elects Wesley G.Bush President and Chief OperatingOfficer

LOS ANGE-LES –– NorthropGrummanCorporationhas electedWesley G.Bush chiefoperatingofficer ofNorthropGrumman inaddition to his

current title of president.

The board of directors also elected James F. Palmer corporatevice president and chief financial officer, succeeding Bush asCFO. Both elections are effective March 12, 2007. Bush andPalmer will report to Ronald D. Sugar, chairman of the board andchief executive officer. This completes the search for a chieffinancial officer that the company announced in May 2006.In his new role as chief operating officer, Bush will continue towork closely with Sugar, focusing on company operations.Sugar said Bush had done an outstanding job as president andchief financial officer, and that the company can leverageBush’s extensive operational talent and experience morebroadly.

Bush, 45, joined Northrop Grumman in 2002 as part of thecompany’s acquisition of TRW Inc. He joined TRW in 1987,where he held increasingly responsible technical and manage-ment positions in electronic and space systems. In 2001, he waselected president of TRW Aeronautical Systems in Birmingham,United Kingdom.

Following Northrop Grumman’s acquisition of TRW, Bush waselected corporate vice president and president of the company’sSpace Technology sector. In 2005, he was elected corporate vicepresident and chief financial officer and in 2006, was electedpresident and chief financial officer.Bush earned Bachelor of Science and Master of Sciencedegrees in electrical engineering from the MassachusettsInstitute of Technology.

As chief financial officer, Palmer will be responsible for the

company’s overall business management function and activitiesincluding the controller; treasury; contracts, pricing and supplychain; financial planning; tax; internal audit; investor relations;trust administration and investments; and financial processexcellence functions. He will also provide leadership to thebusiness management organizations within the operatingsectors of the company.

Palmer joined Northrop Grumman from Visteon Corporationwhere he currently serves as executive vice president and chieffinancial officer. He joined Visteon in June 2004. He previouslyserved from 2000 to 2004 as president of Boeing CapitalCorporation, and from 1997 to 2000 as president of BoeingShared Services.

From 1995 through 1997 he was senior vice president and chieffinancial officer of the McDonnell Douglas Corporation. AtMcDonnell Douglas, he also served as vice president andtreasurer as well as vice president of business operations andCFO for military aircraft and missiles. Prior to his work atMcDonnell Douglas, Palmer worked for twenty years at Ernst &Young, rising to the position of partner.

Northrop Grumman Corporation is a $30 billion global defenseand technology company whose 120,000 employees provideinnovative systems, products, and solutions in information andservices, electronics, aerospace and shipbuilding to govern-ment and commercial customers worldwide.

Intelsat Names Shermit to HeadIntelsat General Unit

WASHINGTON –– Intelsat has appointed William Shernit asthe new president of its subsidiary Intelsat General. IntelsatGeneral provides innovative communications solutions prima-rily to military and civilian government customers.

Shernit served 13 years at the Central Intelligence Agency,where he was responsible for a broad range of technicalsystems and advanced technologies. He then moved to privateindustry and joined BAE Systems, Inc. in 1989. He rose tobecome President of BAE Systems’ Information Technologygroup.

At BAE Systems, Shernit was responsible for successfullyimplementing strategic and operational plans for the IT group,as well as expanding the department through organic growthand acquisitions, and he helped to grow the BAE Systems ITgroup to a $1 billion enterprise. His group focused particularly

Wesley G. Bush James F. Palmer

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on network-centric infrastructures and information-sharingamong the intelligence community, homeland security agencies,and the warfighter.

Shernit holds Master of Science and Bachelor of Sciencedegrees in Electrical Engineering from Cornell University in NewYork.

L-3 Names Curtis Brunson SeniorVP – Corporate Strategy and Dev’t;Susan D. Opp is Corporate VP andPresident of Communication-Systems West

NEW YORK –– L-3 Communications has named CurtisBrunson senior vice president – Corporate Strategy andDevelopment for the company. In this new position, Brunsonwill be responsible for L-3’s corporate growth initiatives,including customer relationships, technical development andbusiness development.

Brunson will report to Michael T. Strianese, President and ChiefExecutive Officer of L-3.

Brunson began his career in 1972 with Sperry Systems Manage-ment Division, prior to its merger into Unisys GovernmentServices. At Unisys for over 20 years, he held several manage-ment positions of increasing responsibility. When Loralacquired Unisys Communication Systems in Salt Lake City, hewas division president. That division became part of L-3Communications during its formation in 1997 with Brunsonbecoming president at that time.

Brunson holds a Bachelor of Science Degree in ComputerScience from the New York Institute of Technology and aMasters of Science Degree in Computer Science from Polytech-nic Institute in Brooklyn, New York.

L-3 has also named Susan D. Opp a corporate vice presidentand president of its Communication Systems-West (CS-West),division. Opp assumes the role previously held by CurtisBrunson.

In 1986, Opp began her career as an associate engineer withSperry Univac and has held positions of increasing responsibil-ity in engineering, product and business development, andprogram management at L-3’s CS-West division. Her mostrecent position was as vice president of Strategic Development.

She graduated with a Bachelor of Science Electrical Engineeringfrom South Dakota School of Mines & Technology and has aMaster’s Degree in Business Administration from the Universityof Utah.

Integral to De-Classify the Boardof Directors

LANHAM, Md. –– Integral Systems, Inc. announced on Feb 6,it will de-classify its board so that it will just consist of a singleclass of directors in which all directors will stand for electionevery year.

Integral said the decision is a the result of an agreement madeafter consultations with various company stockholders.

The company also announced that it intends to add MickeyHarley, as a representative of Fursa Alternative Strategies LLC,the largest stockholder of the company, to its board of directorsat the next regular board meeting today.

“I believe that the company’s decision to de-classify the boardof directors at this time is in the best interests of the Companyand its stockholders,” stated Pete Gaffney, CEO of the company.“These actions demonstrate the Company’s commitment tostrong, stockholder- focused, contemporary corporate gover-nance practices which I believe are consistent with thecompany’s goal of maximizing stockholder value,” he said.Since the annual stockholder meeting in April, 2006, the boardhas been reconfigured to address stockholder requests. MessrsHarley, Leimkuhler, Baldwin (all stockholder recommendations),Albertine, and Casner have been added providing greater depthand independence to the previously elected board. The result-ing voard composition is well constituted to evaluate and guidethe company in directions to maximize stockholder valueaccording to Gaffney.

With the company’s decision to de-classify the board, FursaAlternative Strategies LLC and Chartwell Capital Investors II,L.P., another large stockholder of Integral, has agreed not toinitiate or pursue a change in the board before 2008.

Gen. Howell M. Estes III Appointedto DigitalGlobe Board of Directors

LONGMONT, Colo. –– DigitalGlobe announced on Jan.29, thatGen. Howell M. Estes III has been appointed to its board ofdirectors, effective immediately. Gen. Estes will serve as a

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EXECUTIVE MOVES

strategic guide in the defense and intelligence markets for thecompany as it continues its business development and growthstrategy. Jill Smith, chief executive officer of DigitalGlobe, said Gen. Esteshas an extraordinary reputation in the aerospace and remotesensing industry. “His business acumen and intellect, as well ashis extensive military and policy experience will stronglycontribute to our aggressive growth trajectory going forward,”she said.

Gen. Estes retired from the United States Air Force in 1998 aftermore than 30 years of service. He most recently served ascommander-in-chief of the North American Aerospace DefenseCommand (CINCNORAD) and the United States Space Com-mand (CINCSPACE), and commander of the Air Force SpaceCommand (COMAFCPC).

He holds a Bachelor of Science degree from the Air ForceAcademy, a Master of Arts degree in public administration fromAuburn University and is a graduate of the program for seniormanagers in government at Harvard’s JFK School of Govern-ment.

Gen. Estes currently serves as president of Howell Estes &Associates, Inc., a consulting firm to CEOs, presidents andgeneral managers of aerospace and telecommunicationscompanies. He is currently chairman of the board of directors ofthe Federal Employee Support for CFC Charitable Giving, vicechairman of the board of trustees at The Aerospace Corpora-tion, and president of the board of trustees of the ColoradoSprings School.

Motient Appoints William Freemanto Board of Directors RESTON, Va. –– Motient Corporation (MNCP) has announcedthat William Freeman has been appointed to Motient’s board ofdirectors.

Freeman is chairman of TerreStar Networks Inc., a majority-owned subsidiary of Motient. He has previously served as theCEO of Leap Wireless International, Inc. From 1994 to 2004,Freeman was a senior executive at Verizon. He served aspresident - Public Communications Group from 2000 to 2004.From 1994 to 2000, Freeman was president and CEO of BellAtlantic-New Jersey and served as president and CEO of BellAtlantic-Washington D.C.

Freeman currently is a member of the board of directors of theCIT Group, Inc., a publicly traded company, and Value AddedCommunications, Inc., a privately held company. He is vicechairman of the board of trustees of Drew University and amember of the board and a past chairman of the board of JuniorAchievement Worldwide.

TerreStar Names William FreemanNew Chairman

RESTON, Va. –– TerreStar Networks Inc. has announced thatWilliam Freeman was elected and will serve as its chairman ofthe board. Freeman has served as a director on TerreStar’sboard since May 2005.

“Bill brings years of telecommunications and operationsexperience that will help lead TerreStar as we mature from adevelopment-phase company to one focused on execution andoperations,” said Robert H. Brumley, president and CEO ofMotient Corporation and its subsidiary TerreStar Networks Inc.“This is a natural evolution for us both and I’m pleased he willassume a greater leadership role as we bring into reality thenation’s first integrated satellite/terrestrial communicationsnetwork.”

Freeman has served as a director of TerreStar’s board since May2005, and served as chairman of its audit committee andcompensation committees. From 2004 to 2005, he was the CEOof Leap Wireless International, Inc. From 1994 to 2004, Freemanwas a senior executive at Verizon. He served as president -Public Communications Group from 2000 to 2004. From 1998 to2000, Freeman was president and CEO of Bell Atlantic-NewJersey and from 1994 to 1998 he served as president and CEO ofBell Atlantic-Washington D.C.

Freeman currently is a member of the board of directors of theCIT Group, Inc., a publicly traded company, and Value AddedCommunications, Inc., a privately held company. He is vicechairman of the board of trustees of Drew University and amember of the board and a past chairman of the board of JuniorAchievement Worldwide.

Todd A. Stottlemyer Appointed toDataPath’s Board of Directors

DULUTH, Ga. –– DataPath, Inc., a provider of satellite andwireless communications networks, has announced the appoint-ment of Todd A. Stottlemyer to its board of directors.

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Stottlemyer, currently president and chief executive officer ofthe National Federation of Independent Business (NFIB),America’s largest small-business advocacy group, also servesas vice chairman of the board for the National Capital RegionAmerican Red Cross (Washington, D.C.) and as a board memberof the INOVA Health System Foundation.

“Todd is a valuable addition to our expanded board,” saidWilson Lowery, DataPath’s chairman of the board. “His technol-ogy background and extensive contact network can greatlysupport DataPath in achieving its 2007 objectives and imple-menting its growth strategy.”

Stottlemyer previously served as CEO of Apogen Technologies,a Northern Virginia-based information technology services andsolutions company. Prior to joining Apogen, he served aspresident of McGuireWoods Consulting, managing director ofMcGuireWoods Capital Group and chief financial officer of BTGInc., a publicly traded company. He also held senior manage-ment positions at BDM International.Stottlemyer graduated with a Bachelor of Arts degree from theCollege of William and Mary and received a Juris Doctor degreefrom Georgetown University Law Center.

ProtoStar Appoints Paul FroelichCFO

SAN FRANCISCO, Calif. –– ProtoStar Ltd., a Bermudacorporation with principal U.S. operations in San Francisco, hasappointed Paul Froelich as its chief financial officer.

Froelich previously served as the chief financial officer ofWildBlue Communications, a satellite-based broadband Internetservice provider. Prior to WildBlue, he was involved in infra-structure finance in Asia for an affiliate of Bechtel Enterprises.His appointment follows ProtoStar’s recent successful fundingrounds, which total over $250 million to date. The company’sinitial plan is to create a three-satellite constellation serving thefast-growing and under-served Asian direct-to-home (DTH)satellite-TV market.

Froelich began his career with a New York-based private equityboutique, where his primary responsibilities included thestructuring and financing of leveraged private-equitytransactions. He holds an M.B.A. from the University ofPennsylvania’s Wharton School, and a B.S. in petroleumengineering from the University of Southern California.ProtoStar expects to complete construction and launch its firstsatellite, ProtoStar I, in early 2008. ProtoStar I is an SS/L-

manufactured FS 1300, a satellite utilized by many of today’sDTH operators.

Measat Appoints Terry Bleakley toHead Sales and Marketing

KUALA LUMPUR –– Measat Satellite Systems Sdn. Bhd. has aappointed Terry Bleakley to head Measat’s global sales andmarketing efforts. In this role, Terry oversees the Sales, Market-ing and Customer Engineering Departments, coordinatingefforts within the organization in building and supporting astrong customer base.

Prior to joining Measat, Terry held senior sales positions atIntelsat including, most recently, managing sales director (AsiaPacific). Prior to joining Intelsat, Terry worked for PanAmSatwhere he took the role of senior director of Sales (Greater Chinaand North Asia). Terry has also held key sales and marketingmanagement roles at QoS Networks, Concert and BritishTelecoms.

Terry holds a Bachelor of Science Degree and Post GraduateDiploma in Aviation.

Northrop Appoints Douglas J. NortonSector Chief Information Officer BALTIMORE –– Northrop Grumman Corporation (NYSE:NOC)has named Douglas J. Norton chief information officer for thecompany’s Electronic Systems sector. In this position, Norton is responsible for establishing thestrategic direction and leadership of all information systems andinformation technology activities in the Electronic Systemssector.

Norton joined Northrop Grumman in 1986 as a software engi-neer. Throughout his 20-year career with the company, he hasheld management and executive positions in engineering andinformation systems, including manager of process and tooldevelopment support, and director of sector processes anddesign automation in engineering and manufacturing.

Most recently, he served as director of operations for ElectronicSystems within the company’s Information Technology sector,ensuring synergy across the corporation and providingstrategic focus in support of the sector’s business initiatives.Norton earned a bachelor’s degree in information systems fromthe University of Maryland Baltimore County.

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MSV Appoints Drew Caplan ChiefNetwork Officer

RESTON, Va. ––Mobile Satellite Ventures(MSV) has announcedthe appointment of DrewCaplan, a 25-yearveteran of the telecom-munications industry, tothe position of chiefnetwork officer. Caplanwill be responsible forMSV’s network engi-neering and technologyfunctions, as well asleading the developmentand deployment ofMSV’s next generationnetwork.

“Drew brings to MSV anoutstanding reputationfor technical leadershipand knowledge of thewireless market,” saidAlexander H. Good, vicechairman, and CEO ofMSV.

Good said that duringDrew’s tenure at Nextel,he consistently demon-strated his ability todevelop andoperationalize a best-in-class network capableof providing innovativeproducts and services.Prior to joining MSV,Caplan served as vicepresident of NationalNetwork Services atNextel Communicationsfrom November 1996 toAugust 2005.where he developed anddelivered Nextel’s newservices and handsets,

engineered and operated significant portions of the Nextel’snationwide network. SM

http://www.globallinktv.com

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Globecomm Introduces SatCellMobile Network Solution Via Satellite

NEW YORK –– Globecomm has launched its “SatCell Man-aged Network Services” that provides carriers with an optimummobile network for serving low-density markets, geographicallyisolated areas and sudden, limited-duration demand via satel-lite.

The company said SatCell is designed to generate revenues forcarriers by giving them the ability to rapidly launch networks orextend existing ones while deferring capital costs for switchesand fiber backhaul. SatCell can also be used to connect isolated“telecom islands,” expand coverage to meet short-term demandsand supplement an existing network’s coverage to deploy newservices or capabilities.

In 2003, Globecomm received a GSM Association award for thedemand-assigned mesh network technology that has becomeSatCell.

Globecomm vice president Stephen Yablonski said this technol-ogy optimizes mobile signaling and backhaul traffic for satellitetransmission as IP, using a hybrid architecture customized to anetwork’s traffic volumes and patterns. It enables theprioritization of traffic, a dynamic sharing of bandwidth amongbase stations, and deployment of higher-order modulationwhere needed. The result is a significant reduction in thebandwidth required to connect base stations.

“The cost of bandwidth is the single biggest factor in therecurring cost of carrying voice traffic by satellite,” saidYablonski.

Advantech Brings Low-Cost -SCPCSystem to Market

MONTREAL, Canada –– Advantech Satellite Networks andAdvantech Satellite Equipment have announced the availabilityof a new low cost DVB-SCPC system notable for its easyscalability.

Both companies are divisions of Advantech AMT, Inc., anindustry leader in the design, manufacture and marketing ofequipment for satellite and wireless communications.Advantech AMT has its headquarters in Montreal, and oper-ates facilities in Europe and the United States.

The new system features the world’s first dual capability DVB-

SCPC and DVB-RCS terminal, the SatNet terminal model S5400.Advantech president Don Osborne said the DVB-SCPC VSATsystem is the right solution to complement the company’s DVB-RCS hub and terminal product line.

”Customers sometimes require small VSAT system deploy-ments and require the dedicated bandwidth connectivity offeredby SCPC remote-to-hub return links,” said Osborne.

“We offer the world’ s most affordable DVB-SCPC hub andterminal solution, which can easily be upgraded later to a full-featured DVB-RCS system as the customer’s network sizeexpands over time.”

Vagan Shakhgildian, president of Advantech Satellite Equip-ment, said Advantech’s DVB and SCPC modem business isgrowing to offer complete system solutions that will benefit itsustomers. He noted that Advantech offers a complete suite ofDVB, SCPC and DVB-RCS IP datacasting and networkingsolutions.

Homeland to Add Satellite Modemto Cyber Tracker Product

SAN FRANCISCO, Calif. –– Homeland Integrated SecuritySystems, Inc., a maker of tracking and security products basedin North Carolina, said it plans to leverage satellite communica-tions to enhance one of its major products.

Homeland said this move was prompted by market demand for aversion of its “Cyber Tracker” able to function in remote areasof the world. The company described Cyber Tracker as a “smartbox” GPS tracking device that provides efficiency and versatil-ity.

Homeland has begun the process of integrating a satellitemodem into its existing Cyber Trackers. The integration isexpected to be completed by third quarter of this year.

Homeland CTO Ian Riley said the integration of satellitecommunications into Cyber Tracker will allow the company todeploy its products in areas of the world where there are noexisting cellular communications. This modification will alsomake the new device utilize the intelligence of Cyber Tracker’sbase platform along with the ability to transmit data from remotelocations.

Homeland’s Cyber Tracker technology has applications for dataand tracking functions across a variety of industries, utilizing

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IDEN and GSM technologies. In addition, CDMA and satellitetechnologies are under development with release expected sometime this year.

ND SatCom Introduces New MilitaryPortable Satcom Terminal

FRIEDRICHSHAFEN, Germany –– ND SatCom, an SES Astracompany, will be introducing a new, light-weight yet powerfuland extremely easily deployable portable military terminal tosupport transmission of voice, data and video. ND SatCom saidthe terminal allows for fully meshed, single hop networktransmission.

The MPT1000 is suited for out of area missions, in remote orrough terrain where low weight and rapid terminal deployment iskey. The terminal is portable and stowed in two cases, allowingfor easy transportation whether on foot, ATV or car. The systemcan be pre-configured, hence requires no on-the-spot configu-ration and is up and running in under 15 minutes according toND SatCom.

The portable terminal is designed for Ku-Band operation and anX-Band version is currently under development. ND SatComsaid the terminal consists of a one meter six-piece twin skinnedaluminium reflector antenna, an LNB, a 4 W SSPA, a tablet PCwith integrated GPS and a compass, as well as the stand aloneruggedized modem.

The modem is based on ND SatCom’s SkyWAN technologywhich offers flexibility, scalability and efficiency, and allows fordata rates up to 8 Mbit/s. MF-TDMA satellite channel access isused to provide fully meshed connectivity between all networknodes and to efficiently exploit the satellite channel capacity.Resources are assigned to a user station only when needed.The integration of real-time and non-real-time services isemphasized in the SkyWAN approach which is based on packetswitching technology.

The MPT1000 provides an Ethernet interface which connectsthe user’s Internet Protocol (IP) based networks and equipment.According to ND SatCom, the MPT1000 fulfills the MIL-STD-810E requirements and is thus operational in almost all climaticconditions from cold to hot and from dry to humid. Due to thewide range DC power input, the system can be operated withdifferent types of batteries available in the customer’s logisticchain or directly from the transport vehicle.

SeaMobile Unveils Wireless Servicesto Geolink’s Maritime Customers

PARIS & SEATTLE & BOCA RATON, Fla. –– SeaMobile, Inc.a provider of at-sea communications, connectivity and contentservices, has announced that it has launched its proprietarywireless technology for customers of Geolink’s OceanCellservice. Geolink is a provider of satellite-based broadbandcommunications and networking services with extensiveexperience serving the European market.

In addition, the company formally announced its multi-yearcontract with Wireless Solutions International, Inc. (WSI) toprovide roaming services to Geolink customers in Europe usingthe WSI OmniRoamer Sponsored Roaming Service.

In December 2006, SeaMobile acquired Geolink and in less thanone month, the transition to the SeaMobile technology platformhas been nearly completed. The SeaMobile technology is asophisticated IP/software based solution that allows any typeof phone used by the wireless customer to access theSeaMobile network at sea.

“By using the SeaMobile technology platform, GeolinkOceanCell customers are accessing a state-of-the-art GSMcellular switch located at SeaMobile’s teleport,” said Jim Ellis,SeaMobile chief technology officer. “SeaMobile owns theswitch, enabling us to better control the quality of service andenhance wireless voice and data service features for Geolink’smore than 50 cruise and ferry vessels.”

WSI’s OmniRoamer provides extensions to a terrestrial wirelessnetwork, in this case European operator Manx Telecom, aTelefónica O2 Europe company. OmniRoamer enables subscrib-ers of Manx Telecom’s roaming partners to utilize servicesprovided aboard an increasing number of cruise ships, ferriesand yachts around the world, including those served by GeolinkOceanCell.

GlobeCast WorldTV Expands,Launches Armenian Russian ChannelARTN in U.S.

WASHINGTON, D.C. –– GlobeCast WorldTV, a distributor ofinternational television and radio programming in America, haslaunched ARTN, the first 24-hour Armenian and Russianlanguage television network in the United States.

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The new channel will be distributed directly to consumersthroughout the United States as part of GlobeCast WorldTV’sEuropean bouquet, which also includes channels from 14European countries including Italy, Poland and Romania.

Produced live from ARTN’s Los Angeles studio, the free-to-airservice will offer the rapidly expanding Russian and Armeniancommunities in the U.S. a wide variety of cultural and entertain-ment programs including travel, fashion, food, children’sprograms, game shows and an every day broadcast of soapoperas.

Due to Russia’s recent economic resurgence, there has been anincreased global demand for Russian-speaking channels.However, in addition to Russian and Armenian, ARTN reaches ahost of communities originating from neighbouring EasternEuropean countries, such as Belarus and the Ukraine.

GlobeCast WorldTV’s international programming via satellite inthe U.S. now offers in excess of 200 global TV and radiochannels, in more than 35 languages to 42 countries worldwide.

GlobeCast WorldTV is a subsidiary of content management anddelivery company GlobeCast.

Globalstar Launches Smaller, LighterSatellite Telephone for US Market

MILPITAS, Calif. –– Globalstar USA, LLC has announced theUS market launch of the GSP-1700 next generation satellitetelephone handset. The California based satellite serviceprovider also re-introduced its $29.99 per month E-Star Emer-gency airtime rate plan and launched limited time price reduc-tions on all annual satellite airtime plans for new customers inthe United States.

Globalstar said its GSP-1700 mobile satellite telephone sets abenchmark for satellite telephones capable of global satelliteuse. Weighing approximately 7.1 ounces (203 grams), theQualcomm manufactured satellite handset is nearly half theweight of the current Globalstar telephone and close to 45percent smaller (by volume).

The lithium-ion battery is designed to provide users with fourhours of talk time and 36 hours of standby time. The GSP-1700’slightweight ergonomic design embodies the ruggedness of thecurrent Globalstar phone while integrating convenience-oriented features such as a new color display, lighted keypadand portable headset capability.

The phone supports select Bluetooth accessories, six operatinglanguages and MSS industry leading data speeds of up to 9.6kbps or 38 kbps with compression, Globalstar said. The GSP-1700 is available in three vibrant faceplate colors, using durablehigh-luster or metallic finishes.

XM Radio Online Available WithWindows Vista

WASHINGTON –– XM has announced that XM Radio Onlinewill be included in Microsoft’s new operating system, WindowsVista. Windows Vista, which will be broadly available onJanuary 30, will offer XM Radio Online as part of its digitalmusic hub.

XM Radio Online delivers more than 80 radio channels, includ-ing commercial-free music, the Oprah & Friends talk andlifestyle channel, “The Bob Edwards Show,” “Opie & Anthony,”stand-up comedy, and children’s programming.

My-Chau Nguyen, XM senior vice president for marketingprograms and operations, said by working with Microsoft, XMis expanding the availability of XM Radio Online. “The integra-tion of XM Radio Online further enhances the music andentertainment experience offered by Windows Vista,” he said.

Newtec’s DVB-S2 EquipmentProvides Higher Efficiency forSatellite IP Applications

SINT-NIKLAAS, Belgium –– Newtec is launching its newElevation product line, a series of professional satellite commu-nication equipment specifically designed and optimized for IPapplications.

Built on a cost-effective design but based on an extremelyefficient implementation of the DVB-S2 standard, Newtec saidthe new equipment is ideal for medium-rate data applications forwhich both investment and operational costs are sensitivefactors.

Newtec said new IP encapsulation protocols, high modulationschemes and advanced features like VCM and ACM allow formaximum bandwidth efficiency and operational flexibility inapplications such as primary distribution for IPTV, corporatenetworking, IP trunking, GSM backhauling and IP-based DSNG.

With the increasing importance of IP in all domains of telecom-

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munications, operators are expecting satellite equipment tobecome network appliances. It should integrate seamlessly withthe terrestrial part of the network, be simple to use, and optimizethe efficiency of the network at an affordable cost.

But according to Dries Coppens, the product manager ofElevation, satellite communications remains a domain wherereliability is essential. Elevation, he says, is designed for thespecific requirements of IP networks but does not compromiseon quality.

Agilent Introduces Ultra-WidebandVector Signal Analyzer for ModulatedWideband Communications Signals

SANTA CLARA, Calif. –– Agilent Technologies Inc.) hasintroduced a measurement system optimized for analyzing

modulated wideband communications signals that require wide-bandwidth signal analysis — going beyond the capabilities oftraditional spectrum analyzer-based analysis approaches.

Agilent said the VSA80000A ultra-wideband (UWB) vectorsignal analyzer (VSA) system makes precise, accurate measure-ments for signal bandwidths up to 13 GHz. It is ideal forengineers working on UWB designs who need to run keycompliance-based tests or troubleshoot and debug theirsystems, the company said.

UWB technology is enabling the move from hard-wired USB(universal serial bus) computer peripherals to wireless USB, andit offers users greater flexibility. Originally used in aerospace/defense applications such as wideband radar and satellitecommunications, UWB technology is being adopted forcommercial solutions for short-distance communications andnetworking. SM

http://www.miteq.com

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COVER STORY

by Claude Rousseau

The cellular operators greenfieldopportunities and network extension inkey markets such as rural, low-densitypopulation areas such as islands orsmall cities helps them gain new sub-scribers and reduce churn. However, italso means that operators have tocomply with changing traffic loadthroughout the network and increasingcomplexity in terms of routing at cellsites.

A variety of tools are now offeredto cellular operators to solve thesecomplex network issues, and satelliteplayers have rolled-out a broad range ofcustomer backhaul solutions for newand existing networks. The traditionalvoice and narrowband data services

Satellite bandwidth and equipment is proving to be a strongally to the mobile operators around the globe who strive toexpand coverage to ever farther reaches of the Earth.

The robustness that the booming cellular industry is looking fortoday to fulfill the mounting number of customers calls not justwithin but also outside their network has been filled partially by alink in the sky.

The use of satellite to backhaul cellular networks started in themid-90s with a few operators targeting high-revenues marketsthat, without a link that went the distance, was going to slip bythem.

Satellite Serving Bandwidth to

Hungry Cellular Operators

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COVER STORY

(such as SMS and GPRS) are primeapplications that represent the mostsignificant short-term growth opportuni-ties for operators and form the basis ofmuch of the current market size in termsof deployment and traffic.

In a typical cellular network,communication links are established atbase transceiver stations (BTS) tobackhaul signals and connect from theedge of the network to and from otherparts of the network or to remote sites.The traditional leased-line transportarchitecture is unable today to provideaffordable scalability across the net-works. This led operators to adopt manybackhaul solutions, such as microwave(by far the most popular) with satelliteranking high in specific developingcountries and regions.

Satellite for cellular backhaul, muchlike land-based infrastructure, requires aforward and return link to enable propercommunications services, and much like

it did for the old PTT’s, it now hasdeveloped backhaul capabilities acrosscontinents for historical and newoperators’ cellular networks.

As stated by NSR in its recentCellular Backhaul via Satellite:Extending the Reach of Mobile Net-works report, satellite has improved itsoffering in recent years and is well-positioned to quickly deploy scalablesolutions that help mobile operators facephenomenal growth that will see adoubling of backhaul expenditures bythe turn of the decade.

The improvement made over theyears hasincreased thepotential forsatellite to beconsidered along-term stapleof the market. Ithas demon-strated itsrobustness(notablyequipmentresistance towide tempera-ture variationsat the BTS) andimprovedbandwidthefficiencies(which canpush 50% morecalls throughthe sametransponders)that help bringdown opera-tional costs formore than tenyears.

The mainchallengehowever for the

players in this field is to decrease theunused bandwidth due to point-to-pointarchitecture requiring an “always on”transponder capacity even when nocommunications are taking place. Thepercentage reduction is unused “timeslots” as they are called in TDMA, themost-used cellular technology, and thedecreased overhead in communicationsprotocols between two points in thenetwork is a key decision-factor ofmobile operators when purchasingbackhaul solutions. The estimates placethe “unused” portion at 10% (others goup to 30%), and the problem withsatellite is that by itself, the antenna andthe bent-pipe do not address the wholeissue.

http://www.nardamicrowave.com

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To make the link more efficient,various compressors and traffic optimi-zation tools on the ground help cellularoperators balance the requirementsbetween voice and data throughputsand contain or decrease operatingexpenses, which is usually bandwidth.

As 2G networks are reaching out tograb market shares in virgin territorieswith more than 2 billion cellular phonesusers around the world, the require-ments for backhauling calls rests on arobust set of tools and a call completionpremise to avoid customer churn.

NSR believes that the satelliteoffering today can help cellular opera-tors overcome more easily diversegeography, low population density, highcapital expenditures and small marketsizes. The geography and population

dispersion in specific markets such asAfrica, Asia and Latin America hashighlighted the benefits of couplingsatellite and wireless technologies tobackhaul cellular networks in order toprovide the best and most efficientmeans and capabilities of deployingcellular networks farther out to remoteregions quickly.

Satellite bandwidth in this market istainted with the high-price perception,but a range of improvements havebrought down the cost per Mbps toreach the cost of competing solutions.

The bottom line of the cellularnetworks is lower or contained operatingexpenditures with increased or at leastmaintained voice and data carriage insuch places as sub-Saharan Africa wheresatellite leads the backhaul solutions

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according to Gateway Communications.NSR estimates that C-band transponderleases will dominate the cellularbackhaul market and grow incrementallyfrom 2006 to 2011. The overall totalmarket from transponder leases willreach $157 M by 2011. The key regions

that when it comes to proposingsatellite-based backhaul of its custom-ers, mobile equipment maker Ericsson isthe leader followed by Siemens, Alcatel,Nokia, and Huawei. Ericsson hasdeployed satellite-backhaul equipmentfor over ten years now and offers a fullsuite of backhaul products with softwareadaptations that enable them to workwith various satellite equipment andcapacity providers.

Satellite equipment manufacturersin satellite backhaul know that it isimportant to be technology-agnosticwhen it comes to cellular BTS technol-ogy and offer a high degree ofinteroperability through alliances withvarious vendors to gain a competitiveadvantage. Intelsat has been servingthe market as a natural outcome of itslong-serving relationship with PTTs andcurrently has a list of 60 cellular opera-tors as customers. Others such as SES(through its subsidiaries NewSkies andAstra notably), Shin Satellite (throughIPStar) and Eutelsat (to a much lesserextent) have a presence in the market aswell.

Satellite today forms one of thepillars of the mobile telephony market’sspectacular growth by meeting quicklyand reliably some of its huge backhaulneed. The recent market entry of end-to-end satellite backhaul solutions makebandwidth for satellite VSAT backhaul acost-effective solution that is improvingoperations cost of mobile operatorswhile feeding their bandwidth-hungryusers around the world.

in this market are the Middle East andAfrica (MEA), Asia and Latin Americawhere users continue to leap forwarddirectly to mobile telephony servicesinstead of fixed landlines.

In its report, NSR has determined

Claude Rousseau isAnalyst, SatelliteCommunications forNSR. He can bereached [email protected]

SM

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FEATURE

It was not long ago that the AsiaPacific region was something of a‘no-go’ area for a whole range of

satellite related services, especially forcorporate users. While it was tough forfull time leased services, it was more sofor any kind of occasional use (OU).Anyone who tried to get ad hoc signalsinto or our of the region was faced witha plethora of problems including:

Overall reluctance on the part ofservice providers to offer OU anything!

Occasional use was unknown inthe ‘90’s so getting even the most basic

Occasional Use in the Asia Pacific RegionBy Michael Fleck

pricing information was a chore. Theonly recognised users of satelliteservices were the telcos, broadcastersand government and their requirementswere 24 x 7. No one wanted to hearabout an hour a week!

RegulationsIn the early days every country had

it’s own licensing requirements makinglife tough for those wanting to installand operate satellite receiving systems.For example in Malaysia it was illegal fora business to use a TVRO. It tookGlobal Vision three years of lobbying theMinister for Communications to obtain a

license for Texas Instruments to usesatellite for training at their facility inKuala Lumpur.

Slow response times,poor service

Three years to get a license wasonly part of the problem. Because thevendors did not understand OU they didnot know how to respond to requests forinformation or quotes. The result wasoften weeks of chasing to get pricing.

High costAsia has long been made up of

highly regulated economies. Monopo-lies remained in telecommunications formany years which made the cost ofusing satellite services in any form avery expensive exercise. Adding tocosts was the fact that satellites cover-ing even half the region were relativelylow power which meant receive antennaswere no smaller than 2.4 metres andusually 3.8 metres.

The first BTV network installedacross the region used 3 - 3.8 metre Cband TVRO costing an average ofUS$25,000 per site. It is not hard to seewhy growth in this area has been soslow.

How things have changed.We are pleased to report that for

the most part there is a whole new worldin the Asia Pacific region with OU nowreadily available and high quality.However, impressions from the ‘90’slinger on today:Ward, Inc on location In Tokyo for the Badminton World Championship

2006

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FEATURES

Asia is too difficultAsia is too differentAsia Is too expensiveAsia is too hard

While these problemsremain for the uninitiated, thesituation is radically differentin 2007. Large telcos are stillthere but today there are anumber of professionalbusiness minded smalloperators offering world classservices at commercial rates.This is good news for thethousands of large companiesand governmentorganisations with interests inthe region because AsiaPacific can no longer be leftout of the so called ‘world-wide events’ (formerly codefor North America andWestern Europe).

What we look for todayin our technology partners isthe opposite of the negativefactors above. Our servicestandards depend on:

• Willingness to offer OUservices

• Transparent navigationthrough regulations

• Rapid response timesand high degrees ofservice

• Reasonable costHere’s a quick look at

some of the the best.

Sydney TeleportServices (STS) is a relativelynew arrival in the Australianmarket having commencedoperations 2 years ago. ScottJenkins has set up a highlyprofessional and responsivefacility offering full domestic

and international teleport services withfibre to the US and Europe. It also has

local fibre connectivity to broadcastersand production companies in Australia.

http://www.radn.com

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FEATURES

STS operates a 24/7 broadcastcentre providing DTH services, adhocservices and has just commissioned twoC band 5m tri-fold TES’s that weredeployed for the Australian Open Tennisand Kooyong Classic on behalf of EBU.STS also has access to Ku SNG’s andfly-aways.

There are several studios availablein support of the Teleport. They rangefrom a small interview studio with pointof view cameras of the city sky line tolarger 300sqm and 1200sqm soundstages for TVC’s and drama production.

Singapore has been a satellite hubsince the launch of PAS 2 in 1994. In thesame year ST Teleport began operationsand now offers a full range of OUservices including production studios,uplink, SNG, fibre connectivity and play-out from video servers, and standardanalog/digital videotape players. Theirhallmark is great service and responsive-ness to client needs.

For links out of Japan it would behard to do better than Ward, Inc. MacShimamoto has been involved intransmissions since the 70’s and nowruns a small but successful businessbased in Osaka. In recent time Ward hascovered the F1 Japan Grand-prix as wellas many world championship events,news and so on.

Their SNG facility (see photo) isequipped with production equipment,such as a switcher which can handleNTSC/PAL and analog/SDI, a mixer, acamera, an SX laptop editor for SP/SXand NTSC/PAL, IFB and telephonehybrid, intercom with 5 headsets. It hastwo redundant sets of Tandberg andTiernan encoders and so they canprovide a triple-path uplink with redun-dancy just by adding an extra encoder.

VARTA hasbeen active in thesatellite industryin India since1992. In this timethe company hasdeveloped frominstalling receiv-ing and VSATsystems tooperating SNGuplink andproductionservices. VARTAnow provides SNGuplink for almostall state visitsincluding ChinesePresident HuJintao andRussian leaderVladimir Putin.

A big plus for having VARTA onyour side in India is in navigating themaze of government regulations relatingto uplink in India. They handle coordi-nation with all government agencies onbehalf of clients for any broadcasting/uplink/licensing issues.

Their range of services includes:

• DSNG Terminal (C-Band andKu-Band)• Production facilities• Satellite Space (Ad-hoc andpermanent) and• Fixed teleport services

These are just some of the compa-

nies working hard to reverse thenegative impressions of corporatesatellite usage in the Asia Pacific regionyet many hurdles remain.

Should you be planning an eventor the roll out of a network in the regionthere are a few things to watch out for.

Geography LessonThe Asia Pacific region is a big

place, land mass alone is more than threetimes that of the continental US. It isalso made up of many diverse cultures -there is no country called ‘Asia’. Whatworks in Korea may not be applicable inVietnam and Japan is as different fromthe rest of Asia as the UK is fromEurope. It pays to listen to thoseactively working in the areas you wantto reach to avoid further complicatingthe task.

Events and networks often crossborders

Single location events are reason-ably simple and can be put in placequickly and easily with a single vendor.Those that need multiple countries willrequire multiple vendors and this iswhere problems can arise for theuninitiated.

Be specificWhen you want planning or pricing

The author on location with SNG in Beijing

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FEATURES

information for events in the region ithelps to give more than the usual detailslike date and time. We usually need toknow a little more about theevent itself and the intendedaudiences. It not only helps insuggesting the most suitablevenues but may be needed forlicensing.

Time of dayA critical element is time of

day. There are eight timezonesin the Asia Pacific regioncovering New Zealand toPakistan so there is a lot ofvariation. If the event is to belive, be sure to check the localtime at each receive point. Asyou will know, people in NorthAmerica and Europe are reluc-tant to attend meetings beforesunrise and very late at night.Residents of Asia are nodifferent.

Given all the above it mayappear that Asia is still too hard,but help is at hand. Any of thevendors above can assist witharrangements in their countries.When looking for anorganisation to assist withmultiple sites be sure to checkthem out on:

1. What is the level ofexperience in all the countriesyou need?

2. What resources dothey have in each location?

3. Procedures - how dothey manage the remote sites?

4. Communication - thereare a dozen languages aroundthe region, how do they dealwith local people in each place?

5. Licensing - are theyaware of licensing and local

government issues in each location?How will they deal with these issues?

The Asia Pacific region is still alarge, diverse and sometime dauntingpart of the world but it has come a long

http://www.newtec.be

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FEATURES

way since satellite started being used bythe corporate world. Today we haveleading edge production, transmissionand reception technologies availablejust about everywhere. The attitudetowards the occasional customer ispositive and service levels are approach-ing world standard.

What is missing are the users -multinational companies which want tocommunicate with their Asia Pacificoperations just as they do with those inthe Americas and Europe. Organisationswhich understand that over 50% of theworld people live in this region. Asia isno longer too difficult, too different, too

expensive, too hard. In the corporateand occasional use end of the satellite

Michael Fleck is managing Director of Global VisionNetworks, the Asia Pacific region’s leading provider ofservices to the corporate world. Based in Sydney withrepresentative offices in Hong Kong, Singapore, Chennai(India) and soon in Beijing, Global Vision offers completeturnkey solutions for everything from downlinks into hotelsto disaster recovery capability across the region.

Global Vision Networks designs and manages permanentand occasional solutions for the enterprise market in 17 countries of the APregion. Since 1992 the company has assisted multinational corporations with arange of solutions including location television production, fixed and SNGuplink, temporary and permanent downlinks and an extensive network ofsatellite equipped five star hotels for special events. Michael can be reachedat [email protected]

SMmarket Asia is ready and open forbusiness.

http://www.cpii.com/satcom

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FEATURE

In every conventional engagementannouncement there’s a bride andgroom involved. In the case of XM

Satellite Radio and Sirius, who said Feb19 that they would merge, it is notprecisely clear who is playing whichrole. Besides, this engagement has acouple of very influential relatives in theshape of the Department of Justice andthe Federal Communications Commis-sion. Without DoJ and FCC absoluteapproval no marriage can take place.

The logic behind a merger isinescapable: common programming,lower programming costs, removal ofconfusion for buyers who would nowget ‘all’ the programming on offer; singleproduct to be marketed, fewer staff,harmonisation over time of the satellitefleet – and once the merger beds down apotential savings target measured in thebillions of dollars. The timing is probablyright. Both outfits have sustainedmassive losses, and with a Republicanadministration probably now in its dogdays as the USA counts down to aPresidential election, it is perceived thatthe merger has a better chance ofsuccess now than in two years time.

Both parties have brought in big-time lawyers to help guide the planthrough. Sirius, for example, has hired aformer FCC chairman Richard E Wiley toargue its case against the current FCCchairman Kevin Martin, incidentally aformer member of the Wiley Reid lawpractice in Washington. It will beinteresting to see how CommissionerMartin argues his view with his oldsenior partner. However, Commissioner

US Sat-Radio: 35m subs by 2015?by Chris Forrester

Martin is a bright,young lawyer andno pushover.Martin’s com-ments on Feb 19were blunt, sayingthat the mergerwould have somehigh hurdles toovercome.

Amidst allthe hoopla andagonising aboutwhether the twosatellite radiorivals would evermake it to the alter,it seems mostpeople haveforgotten what theupside of such a marriage would mean.

A hefty 50-page report on the USsatellite radio sector landed on our deska few days prior to the announcementfrom William Kidd, now in place atWedbush Morgan Securities (WMS).His timely overview examines thecomplete radio spectrum, includingcurrent and emerging technologies likeInternet Radio, MP3 activity, the new-fangled possibilities offered by wirelessstreaming as well as the fight back fromHD Radio and the existing AM and FMofferings. We’ll look in detail at Kidd’sanalysis in a moment.

But Kidd is not the only bankerkeeping a close eye on the sat-radiosector, and Bear Stearns’ senior analystBob Peck has been a true and trusted

guide through the whole ‘courtship’between XM and Sirius. Peck says amerger would “likely pass” regulatoryhurdles.

Peck talked about the potentialshare both parties might have in a newmerged operation, suggesting that eventhough XM is ahead in terms of sub-scribers, Sirius has a higher valuation.William Kidd assumes – however - amerger will not take place, and conductsa thorough examination of the market.He extrapolates last year’s 60% marketshare for Sirius’ new subscriberscompared to XM Satellite’s efforts andpredicts that more or less this 60:40annual market share will continue thisyear before settling down to 58:42 rationext year and then drifting a little lowerto a 55:45 split by 2010 which continuesuntil 2016. Within the annual figure,however, Kidd expects some seasonalfluctuations but his annual figureremains constant. Of course, if the twolayers merge then this split becomes

XM Satellite Radio CEO HughPanero

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FEATURES

irrelevant.

Many of us have compared the riseof pay-radio with that of pay television.This would be wrong, says Kidd. Thestructure is essentially different.“Satellite radio’s vertically integratedstructure differentiates it from mostmajor media businesses,” Kidd stresses.“Both Sirius and XM Satellite operatetheir own respective networks as well asown and produce a vast majority of theirnetwork content. The net result is thatnot only is there a structural barrier tonew competition due to the absence ofavailable spectrum (the FCC awardedonly two licenses for satellite radio), butalso favorable economics due torelatively low content costs. The lowcost stems from the fact that unlike inthe pay television world, contentproviders like ESPN cannot comparablyinfluence either satellite operator. This isbecause few radio channels are domi-nant in the minds of consumers. Withtelevision, consumers tend to onlywatch 10-20 channels out of hundreds,giving the providers of those 10-20channels significant pricing power overcable and satellite television companies.This is not the case with satellite radiowhere music is often the consumer drawand music royalties are extremelyaffordable compared to the carriage ratesof major cable networks,” Kidd adds.

Kidd also rightly reminds us thatthe satellite radio sector is no longerbuilt on a wing and a prayer, or as hedescribes it based on an investmentthesis of “build it and they will come”optimism. He says that few now doubtthat satellite radio will soon be a 20msubs business in the US, and perhaps inyears to come a 30m-subscriber busi-ness. In other words well into themainstream, and very much mass market.He suggests this can only get betterwith OEM supplies now ramping upnicely and predicted to be hitting their

stride over the next 5 years as more cars,vans and RVs coming pre-equipped withsat-radio units.

Kidd expects Sirius to move into‘free cash flow’ this year having alreadydeclared it was FCF positive in Q4/2006.He says XM will be in a similar positionduring this year. Kidd also gets back tobasics, and reminds us that satelliteradio in the US has already generatedmore hard subscribers than satellite TVdid in a comparable time frame, or cableTV, or cellular telephony, on-line movierentals, etc. He adds that the basicpremise, of ‘commercial free’ channels isstill a strong selling point. Add in thespecialty services from both players, theHoward Stern and Oprah ‘channels’,plus the exclusive sports deals, and theproduct offering is strong. And the

market is still huge. US adults spend anaverage 20.25 hours a week in theirvehicles. That target market, of some124m commuters, is simply massive withan average commute each way of 25.5minutes. Even better – at least for theradio industry – is that 43m spend morethan 1 hour to get to and from work.There’s also still an untapped market: Arecent Arbitron/Edison research studyfound that 8% of Americans are “very”interested in HD Radio, while 18% ofthose surveyed and who do not cur-rently subscribe say they are likely tosubscribe over the next year.

The ‘after sales’ market, as well theretail supply of so-called home boxes,has benefited both players hugely. Butthose sales have softened lately. Thishas “caused some to be incrementallymore pessimistic,” says Kidd. “In early2006, Sirius and XM started the yearwith a combined guidance of 15 millionyear-end subs. Both adjusted thosetallies during the year, and both ulti-mately missed their last guidance round(4Q06) set in their 3Q06 reports. At thesame time, NPD, a market research firm,had been releasing retail unit volumeestimates, namely monthly year-over-year changes, which showed weaknessfor the second half of 2006. Neverthe-less, the combined tally for bothcompanies still managed to reach 13.7million subscribers, which was good butwell under where guidance initially

stood for 2006.”

Kidd suggests thatsome of this softeningwas down to a lowerthan anticipated salesand marketing effort fromXM and Sirius becauseof the FCC drive ondevices claimed to becreating interference. Butthe retail declined even

XM Satellite has sold its latest satellite, by meansof a $288.5m sale & 9-year leaseback deal on itsXM4 craft. The thought is that such a move wouldavoid the need to restructure its credit line. Thedeal “appears to give XM a liquidity cushion ofabout $200 million” until it reports positive cash flowin the second half of 2008, Jonathan Jacoby, ananalyst with Banc of America Securities, wrote in anote.

XM4’s sale & leaseback

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FEATURES

when new marketing efforts kicked in,with year-on-year sales sliding (August:-3%; September: -12%; October: -25%;November: -45%), leading to a whopping46% decline in year-over-year unit salesfor December 2006,” says Kidd, quotingNPD/Orbitcast data). Without doubt partof these “declines” is the aftermath ofthe ‘Howard’ effect on Sirius of theprevious year. Kidd also thinks theremight well have been other temptingattractions for consumers’ wallets, notleast HDTV and iPOD devices.

The ‘Howard’ effect is alsoexamined by Kidd. “We believe HowardStern’s importance does not end withthe conversion of some small percentageof his loyalists. Howard Stern plays animportant role in winning subscribers forSirius, even for non-Howard listeners.Specifically, it is our belief that Sirius hasa content advantage relative to itscompetitor that is readily perceptible bymany potential subscribers. For the mostpart, potential subscribers don’t reallyknow how their satellite radio experienceis going to turn out; they probably havespent very little time with either system.Therefore, when they can identify key,recognizable content on a particularsystem (and no content is more impor-tant than Howard Stern in the radioworld), it registers and resonates withthem.”

Satellite radio hardware costs areno longer a barrier to entry. Devices areavailable pre-installed prices of just $50,and as mentioned earlier, the supply ofautos with pre-installed kit continues togrow impressively. Volvo, with this 2007model year (already in the showrooms)will be factory installing Sirius units witha ‘free’ six months sub on its 4 majorvehicle models (S40, V50, C70 and thenew S80). Mitsubishi, effective with the2008 season (in showrooms later thisyear) will offer Sirius as standard n itsentire model line. Kia also has Sirius

contracted with an agreement thatextends into 2014 with sat-radio astandard feature on all 2009 models. It’smuch the same with Audi, alreadyachieving a 50% install rate which growswith 2007 models through until 2012.Volkswagen, starting with 2007 models,expects to supply Sirius units to about80% of their model range. Subaru is alsoactive offering Sirius as dealer installedoptions. Sirius is a standard on RollsRoyce cars. Mazda is offering Sirius onthe larger portion of their model range.Mercedes has a deal in place until 2012and fits Sirius as a standard install on allSL and CL class models. Daimler-Chrysler has a deal in place with Siriusuntil 2012, and is hitting a 40% rate forits output. BMW is exclusive with Siriusuntil next year, and factory-fitted Siriusunits go into their 3, 5, 6 and 7 seriescars. All Fords, and Ford-owned brands(Aston Martin, Jaguar, Land Rover, etc)install Sirius in a deal that extends to2011, however Ford can elect to go non-exclusive from Jan 2009.

XM’s deals are not dissimilar,covering Toyota and Lexus (until 2017)and likely to hit 1m units a year by 2010.Honda is good with XM until 2016 and isexpected to hit 650,000 units this modelyear. General Motors will ship 1.8m XMunits this year, while Porsche is

Making XM available on itsCayenne models. Porsche and XM havea long-term agreement in place.Hyundai’s pre-fitted options startedkicking in with 4 models out of their 2007range, and Kidd says this is just thebeginning of an aggressive roll-out forXM with Hyundai vehicles. Niasan’sInfiniti models have XM pre-installedand this extends to the full Nissan rangewith 2008 models. Kidd expects this torepresent 1m units annually by 2010.Suzuki has also been pre-installing XMsince 2006 with some models.

Kidd says that XM can attempt tosteal some of Sirius’ agreements as theycome up for renewal. And even ifunsuccessful, the end result might wellbe to bid up the existing agreementsalready in place, as Echostar did whenchasing DirecTV’s NFL deal. However,Kidd’s report issues a note of caution,citing the XM agreement to secureOprah for 3 ears but at a cost of $55mbeing an “irrational” and not comprisingcompelling content. “We think,” hesays, “Oprah at $55 million over threeyears is a prime example of XM actingirrationally…. Unlike Howard Stern, whois more than successful in the medium ofradio and broadcasts for 20-25 hours perweek by our estimation, Oprah’s channelon XM only features Oprah for 30minutes per week. It’s merely a forum forOprah to promote her friends on XM’sdime. In other words, Oprah on radio isall sizzle, and no steak. Besides, Oprah isfree on TV, and Howard is essentiallyexclusive to satellite radio—anotherhuge difference. We wonder why XMdoesn’t just attempt to win the “who’sthe better investment race” by havingmore subs and lower programmingmargins. XM needs to realize that thereis not another Howard Stern out there.And that without him, the odds of theNFL or NASCAR allowing for XM tosurpass Sirius in retail market share isabout nil (unless Sirius has a cata-strophic satellite failure).”

But where does all this activityleave the two players (and againassuming no merger or acquisitionactivity) a few years from now? Kidd isbullish: “By 2015, the terminal year ofour forecast, we forecast almost 7 millionOEM gross additions. This is based onthe belief that new cars will still continueto number 15-17 million per year and thatsatellite radio should be able to improveon its market share levels as more andmore users become accustomed to itsservice. Pay television penetration rates

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FEATURES

have grown for well over thirty years.And if pay television is any indicator, itwould be unreasonable in our minds toassume that a terminal penetration levelfor satellite radio will be visible sometimewithin the next five years (especiallyconsidering that many OEMs will still beramping their production commitmentsduring that horizon). Importantly, at leastin terms of a reality check, at 7 millionforecast gross adds in 2015, we believeour forecast does not imply anythingother than wide acceptance of satelliteradio. We believe our forecast repre-sents OEMs production levels not toodissimilar from what the more aggressiveOEMs are already committed too; inother words, our satellite radio forecastis not based on the world becomingfactory-installed standard, thoughsurely, that is a possible scenario.”

Kidd examines all the other keyelements of the sector’s business profile,not least Subscriber Acquisition Costs(SAC), which for Sirius have tumbledfrom the horrific $330 back in 2004 to amore palatable $140 or so this ear, andpredicted to fall about $100 by the endof the decade, and around the $75 markby 2015. XM’s SAC costs are lower. Butthere’s an obvious hidden advantage:second hand cars. With millions ofvehicles now on the road with either XMor Sirius installed this after marketshould start helping out both playerswith new subscribers NOT needing anyheavyweight SAC.

Kidd also examines the competitionfor satellite radio. “Today,” he says,“Sirius and XM have roughly 14 millionsubscribers combined, which we believeroughly translates into twice as manylisteners (28m). For perspective, satellitetelevision (DBS) only had a touch under10 million subscribers after its first fiveyears of service. For perspective, by2010, we believe satellite radio’s sub-scriber base could reach 27m subscrib-

ers, which would similarly equate toabout 54m listeners. This compares totraditional radio’s audience base of 227mlisteners and 19m listeners of audiostreams on the Internet weekly.”

What Americans call ‘HD Radio’(and the rest of Europe calls DAB) is agrowing threat and there are now 900stations transmitting digital radio, with atarget 1200 stations and 90% of thepopulation to have technical coverageby year-end. While audio signals areimproved, the main driver is extra stationchoice for a community or region.Fortunately for satellite radio, HD Radiois “arriving late” says Kidd. “We believethat satellite radio’s success has likelybeen a major contributor to the slowadoption of HD Radio. Having said that,digital radio has been successful in theUK and Denmark, although in thosemarkets, digital radio has never had tograpple with satellite competition.” HDRadio is also local, and at least on somebands, commercial free at the moment.But Kidd doesn’t expect that situation tolast. Internet radio now reaches about12% of he radio audience, up from 8% in2005, suggesting there’s plenty ofheadroom in that segment. Kidd speaksoptimistically of next-generation WiMax-based wireless services, especially the802.16 so-called wireless broadbandapplications and upcoming FCC auc-tions in 2008 for spectrum.

London-based Chris Forrester, a well-known broadcastingjournalist is the Editor for Europe, Middle East and Africafor SATMAGAZINE. He reports on all aspects of theindustry with special emphasis on content, the business oftelevision and emerging technologies. He has a uniqueknowledge of the Middle East broadcasting scene, havinginterviewed at length the operational heads of each of themain channels and pay-TV platforms. He can be reached

at [email protected]

In terms of satellites, Kidd talksabout the Sirius order for a GEO craftfrom Loral (the Sirius fleet to date isHEO-based) for launch about 2009. Atthat time, he suggests, “one of the in-orbit HEOs would likely stop broadcast-ing and revert to an in-orbit spare untilabout 2012. During this period, wewould expect the company to at leaststart the building/replacement processof its two older MEO satellites. Note thatwe would expect the company to keep itsexisting ground spare as a spare and notlaunch it.”

Kidd predicts that by 2015 the twoplayers will be drawing in total revenuesof some $7.3bn. That’s an impressivebusiness sector, with a combinedsubscriber base of around 35m. Nodoubt Europe’s would-be players will belooking enviously at the prospects.

A US merger, however it is struc-tured is another kettle of fish. A report atthe end of February talked about the twoplayers themselves only rating theirchance of getting the deal passed by theregulators at no better than 55%-60%.This is perhaps why the pair are con-tinuing to run their businesses whollyseparately. The cut-off date is a yearfrom now. If approvals are not in placeby then the two businesses walk awayfrom the proposed deal. SM

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CASE STUDY

With business continuitybecoming an increasingly vitalconsideration for businesses

of all sizes, satellite-based data networkshave emerged as an essential backupconnectivity platform. Because VSATtechnology completely bypasses thelocal terrestrial last-mile infrastructure, itpresents a uniquely valuable tool toensure 100 percent uptime for mission-critical voice, data and video networks.

Local, state and federal governmentagencies have also become increasinglyaware of the need for satellite communi-cations equipment and capacity in theevent of natural or man-made disasters.Experience has shown that traditionalwireline and cellular communications willnot be reliable in these situations - evennew emerging wireless technologies,such as WiMax and CDMA wirelessbroadband are ultimately dependent onthe local transmission towers andterrestrial telecom infrastructure and willbe subject to disruption in a localdisaster.

VSAT is gaining popularity as aservice for enterprises with high uptimerequirements that are seeking theultimate in diverse physical pathbackup/failover connectivity. On-demand (part-time) VSAT services arenow available for failover connectivityor burst connectivity. These are usage-based offerings, so the customer only

New VSAT Backup Solution EnsuresBusiness Continuity

By Jeffrey Carl

pays for what they need. Cisco recentlyintroduced a satellite modem in anetwork module form factor (called theCisco IP VSAT Satellite WAN Module)for their ISR routers, making the setupand configuration of VSAT for automaticfailover connectivity easier than ever.

Another rapidly growing market forsatellite services is transportableconnectivity to government, homelandsecurity and first-responder organiza-tions. By putting an auto-pointing VSAT

antenna on the roof of a SUV or trailer,agencies can use the satellite modem asthe backhaul for a “go-anywhere” mobileInternet access, VoIP or other communi-cations command post that is deployablein five minutes or less.

Case Study: Major OilCompany Deploys VSAT forBusiness Continuity

The Gulf Coast hurricanes of 2005drove home the importance of business

One of America’s largest oil companies is using the Cisco IP VSAT Moduleto ensure continuity of critical communications.\

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CASE STUDY

continuity planning. For major U.S. oilcompanies in the region, the devastationof hurricanes Katrina and Rita high-lighted the need to plan not just fortransitory outages or network problems,but also for long-term communicationsfailures. Those disasters also demon-strated that telco, cable and terrestrialcellular infrastructures are likely to beseverely degraded in the aftermath of amajor storm, creating a need for a trulyindependent and redundant means ofcommunications.

Let’s look at how one of thenation’s largest energy companies copedwith these disasters and implemented acommunications plan to ensure completecontinuity of critical communications inthe future.

In the aftermath of hurricaneKatrina, our case study company lostvoice and data communications withsome of its 16 Gulf of Mexico oil refiner-ies. Wireline circuits (frame relay/T1,DSL and cable) were all out of service.Cellular communications were saturatedand often unavailable. Voice and criticaldata communications of any kind wereoffline, and the refineries were com-pletely isolated.

The company quickly learned that,without voice and e-mail links, refinerymetrics could not be evaluated. Seniormanagement was unable to make criticaldecisions, and employee and operationalsafety became a growing concern.

To deploy an emergency connec-tivity solution, the company turned toSpacenet. Within 24 hours, Spacenetdelivered satellite terminals to restorecritical communications servicesbetween the headquarters and theaffected refineries – avoiding costly andtime-consuming refinery shutdowns.

Once terrestrial communicationswere restored, the oil company re-

Major U.S. oil companies arediscovering the value of VSAT as abackup connectivity platform.

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CASE STUDY

designed its disaster-recovery strategy to reduce its dependence onterrestrial communications links, and integrate a satellite back-up solutioninto its ongoing communications and IT infrastructure.

In early 2006, Spacenet deployed the Cisco IP VSAT Satellite WANModule. This enables network managers to configure their networks toautomatically “fail over” to a satellite broadband connection for voice anddata if their primary links fail. The Cisco VSAT WAN backup solutionenables the oil company to minimize service disruptions during disastersand terrestrial WAN outages by switching high-value or mission-criticalcommunications to the VSAT network. This enables the oil company tomaintain data communications between its Texas headquarters and each ofits refineries in the Gulf area.

The on-demand satellite connection is configured on the router justlike any other WAN interface, and routes are selected in the order speci-fied by the network administrator. The entire switching process betweenterrestrial primary and satellite backup links requires less than two minutes.With up to 1 Mbps uplink and 3 Mbps downlink capacity available on theVSAT network, the oil company can retain the most business-critical dataand voice communications services, facilitating continuity and recovery.

With improving bandwidth capabilities, on-demand service options,greater cost-effectiveness and unique options such as the new Ciscosolution, VSAT is positioned as an ideal choice for WAN backup anddisaster recovery. We expect VSAT to maintain its critical, behind-the-scenes role to ensure constant access to communications.

Jeffrey Carl is Director of Marketing forSpacenet Inc., one of the nation’s largest andmost experienced providers of satellite communi-cations for enterprises and government. He canbe reached at 703-848-1068 [email protected].

VSAT networks,such asSpacenet’sConnexstarservice, aregainingpopularityamongenterprises withhigh uptimerequirements.

SM

http://www.avltech.com

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VITAL STATISTICS

About Aon ExplorerAon Explorer is the strategy consulting arm of Aon France in the aerospace and telecoms markets. Resulting from theacquisition of Vista Advisers in January 2005, Aon Explorer Strategy & Finance has developed a thorough expertise inbusiness plans, feasibility studies, companies due-diligence both for the satellite industry and the finance community.Please contact Laurence Journez, Vice President, tel: +33 1 5875 6064, email: [email protected]

Transponder Pricing

• Global operators (10 satellites and more) benefit from large economies of scale. They arethus in a position to drop prices to increase their fill factors or enter new markets. Minimumsustainable prices are around USD 0.75 million, i.e. they can easily lower their prices to thislimit to enter new markets in a stiff competitive environment.

• On the other hand, medium (3-4 satellites) and small operators (1-2 satellites) cannot lowertheir prices below USD1 M and USD1.18 M respecively on a sustainable basis.

• Therefore, small operators struggle to contain serious price competition while keeping theirfinancials sustainable.

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MARKET INTELLIGENCE

By Martin JarroldChief, International Program Development

In this column a few months ago Imade reference to the three fundamental defining characteristics of

satellite.

· Cost Effectiveness: The totalcost of ownership of broadband viasatellite solutions has been reduced byeconomies of scale, and globally, overone million receive-only terminalsusing IP multicasting have been de-ployed, together with nearly one millioninteractive terminals.

· No Limitation of Distance,Geography or Location: Unmatchedcost-effectiveness of broadband oversatellite also arises from the uniquecombination of broadcast capabilitieswithin full networking solutions. WithIP over DVB being the de facto standardfor broadband communications oversatellite, and with such systems clearlydemonstrating their greatest cost-effectiveness by matching the asymmet-ric nature of Internet traffic.

· Rapid, Economic and ReliableDeployment: High-speed and securedelivery of all types of broadbandapplications is achieved through asingle, end-to-end solution that is morereliable than terrestrial alternatives,flexible to fit with present demand, andscalable to fit all future requirements.

These defining characteristics,together with the facts of vertical marketICT requirements, will in 2007 once again

Industry’s “InterActive” AnalysisOil & Gas Communications in 2007:

be brought together to drive an annualconference dedicated to the communica-tions imperatives of the energy exploita-tion sector in key oil and gas explorationand production regions of the world.

Just before the time of writing thiscolumn, I heard news of the discovery ofa major oil field southeast of Ghawar,Saudi Arabia. In addition, the interna-tional business media regularly featuresnews regarding natural gas discoveryand new distribution projects. Ofcourse, favorable fresh discoveryprospects in the natural gas sector arelikely to stretch much further into thefuture than in the oil sector, given thatthe widely anticipated “Oil Peak” isthought by some to be with us rightnow. But, whatever the accuracy ofsuch assessments, what is certain is thatboth oil and gas exploration andproduction sectors will continue forsome time to call upon the telecommuni-cations sector to provide and deploy themost cost-effective and reliable applica-tions solutions all around the world.

The GVF Oil & Gas Communica-tions 2: North Africa and the MiddleEast Conference – organized in collabo-ration with UK Event ManagementPartners (UK-EMP) – will follow on theacclaim for the first Oil & Gas Communi-cations event held in May 2006. In 2007,the conference will once again take placein Cairo, Egypt, but in 2007 at a morecentral conference venue (in Heliopolis),and over 21st & 22nd May.

GVF welcomes Schlumberger asthe conference Principal Sponsor for thesecond successive year, and we arepleased to announce that some of themajor regional oil & gas operators –particularly Qatar Petroleum andDolphin Energy – have already regis-tered their participation at the 2007event. The participation of StratosGlobal, Alkan Telecom, and EgyptianSpace Communications is also an-nounced.

Chaired by a senior member of theGVF Secretariat, Day One of the confer-ence will open with a Keynote Speechfrom a senior Ministerial official repre-senting the policy and/or regulatoryposition of the Egyptian Administrationin respect of the current status, andintended future development, of theelements of the national communicationsinfrastructure that helps to promote theadvance of the oil & gas sector withparticular reference to those oil & gasvertical market segments representedwithin the national economy.

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MARKET INTELLIGENCE

Throughout the remaining twodays of proceedings the emphasis willbe on promoting discussion and debate,and to facilitate this, the conferenceformat will comprise a series of clearlythemed ‘InterActive’ Panels. This seriesof ‘InterActive’ Panels will be punctu-ated with both Applications CaseStudies and Showcase Presentations.

Day One, 21st May, will feature atotal of four “InterActive” Panels, asfollows:

“InterActive” Panel 1 will providean introductory foundation for theremainder of the conference programme,and is entitled Applications Evolutionand the Dynamics of Oil & Gas Net-working Communications. It willprovide an appraisal of the developmentof applications that are central to themission-critical networking requirementsof the various exploration and produc-tion segments of the oil & gas sector,together with a ready appreciation of thedynamics of current communications

technology trends. Panel 1 will assumea pan-regional focus in the form of ananalysis of today’s communicationsproduct and service environment withinwhich the players in the vendor commu-nity compete to satisfy the efficiencyand risk-management needs of thebuyers of ICT solutions in the oil & gasenvironment in North Africa and theMiddle East.

“InterActive” Panel 2 will take asits main focus the fact that the communi-cations requirements of the oil & gasvertical are Internet-based and band-width hungry. In Bandwidth Supply/Bandwidth Demand: Optimising Price,Quality and Reliability Variables in Oil& Gas Communications the emphasiswill be on assessing how the accelerateddeployment of communications tech-nologies, that are providing essentialbroadband access for end-users invertical markets like oil & gas sector, isalso satisfying parallel demands forcheaper access through reducedbandwidth pricing. The objective of

Panel 2 is to provide both oil & gas end-users and telecoms providers anopportunity to put forward their respec-tive positions and to jointly identifyexactly how greater bandwidth supplyand cost-effectiveness can be realised inthe form of improved bandwidthoptimisation and oil & gas sector-specific customisation techniques.

Oil & Gas Networking Innovation:Satellite and the Hybridisation of theWide Area Seamless Solution is thetheme of “InterActive” Panel 3. ICTsolutions buyers in the oil & gas sector,or, indeed, any other, vertical – who arenaturally interested in the fact (and cost-effectiveness) of the solutions theyneed rather than the details of theconstituent mechanisms that contributethe solution – tend to be technologyagnostic. Yet, the physical circum-stances of oil & gas resource exploita-tion, and the industry requirement to linkmultiple sites – for example, inland andoffshore – necessitate that companies inthe sector buy wide area networkingservices which utilise various combina-tions of wireline, terrestrial wireless, andsatellite platforms. Therefore, it isincumbent on communications industryoperators and service providers toensure that their offerings to the oil &gas sector continue to provide multi-platform, multiple technology, hybridizedsolutions to meet the complex andextensive voice, data, and video applica-tions needs of this vertical environment.Panel 3 will investigate and explain howthis is being achieved, and explore whatmore needs to be done.

The principle focus of“InterActive” Panel 4 will be regulatory.Whilst cost-effective, reliable, andscalable communications are one of theessential precursors of productionefficiencies for the oil & gas sector,exploration and extraction of these

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MARKET INTELLIGENCE

essential economicresources often takeplace where the policyand regulatory environ-ments that permitaccess to, and use of,some or all communica-tions platforms – suchas satellite, terrestrialwireless (e.g. WiFi andWiMax) – isunfavourable andlittered with obstacles.The CommunicationsRegulation andVertical MarketGrowth Maximisationsession panellists willexplore how theeconomic and industrialstrengths of the oil &gas sector can be usedto influence the policydevelopment ofgovernments and therule-making posture ofrelevant administrationsto secure more openand transparentregulatory and licensingregimes.

Chaired by asenior member of theGVF Secretariat, DayTwo of the conference,22nd May, will open witha Keynote Speech froma senior representativeof an oil & gas companyactive in the NorthAfrica and Middle Eastregions, and will featurea further four“InterActive” Panels,again punctuated withApplications CaseStudies and Showcase

http://www.wavestream.com

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MARKET INTELLIGENCE

Martin Jarrold is the Director, International Programs of the

Global VSAT Forum. He can be reached at

[email protected] For more information on the GVF go

to www.gvf.org

“InterActive” Panel 5 will look at“Future Evolution”: Advancing theDynamics of the IP-Based Communica-tions Solution. Panel 3, on Day One,looked at the contribution of satellites tohybrid-based communications solutionsfor the oil & gas vertical. In Panel 5 theemphasis is on leading-edge, non-satellite-based, terrestrial communica-tions technology developments andtheir current and potential impact on theICT strategies in the business models ofthe – oil & gas sector – end-user, and inthe communications solutions vendorofferings environment. An analysis andunderstanding of current trends interrestrial wireless is an essentialfoundation for oil & gas ICT managersin the planning of future-use andpurchasing decisions in the broadband,IP, applications and services market-place. This will not be an exercise in adhoc crystal ball-gazing, but a clear andexpert overview of just how today’scommunications technologies and theassociated business models which arefacilitating their deployment are mostlikely to yield end-users greater opera-tional efficiencies. This will include anexamination of how the use of differentcommunications platforms is helped,hindered, and determined by geographi-cally determined supply factors, as wellas an analysis of the potential forspectrum allocation conflicts betweenterrestrial and satellite solutions.

Maintaining the Mission CriticalLink: Oil & Gas CommunicationsWhen Disaster Strikes is the theme of“InterActive” Panel 6. It will explore thereal-world realities in the oil & gasenvironment of maintaining and restor-ing essential communications pathwaysduring – and immediately after –connectivity interruptions such asnatural disasters (including earthquake,flood and storm), and human conflictsituations (such as terrorism and war).The effectiveness of different communi-

cations platforms in making usefulprovision for business continuity/disaster recovery/emergency manage-ment in various situations, particularlythe unique contribution of satellitecommunications in such circumstances,will be examined in particular detail.

The world is facing the medium-term exhaustion of its known supplies ofoil, and supplies of natural gas becomemore difficult to locate, tap into andtransport to its consumers. In thiscontext “InterActive” Panel 7, which isentitled Oil & Gas ICT: Mitigating theResource “Exploitation” Tag, willexamine how communications solutionsare working with advanced IT tech-niques to allow oil & gas companies toexploit reserves in ecologically sensitiveenvironments whilst adhering tointernational treaty obligations and alertto the pressure of public opinion. Inaddition, in a politico-economic environ-

ment that is increasinglyinfluenced by discussion ofclimate change, Panel 7 willexplore how ICT develop-ments in the oil & gas sectorare advancing evolutiontowards a non-Carboneconomy.

Collaborative Oil &Gas Communications:Sharing the Benefits is thetitle of “InterActive” Panel8. With the communicationsdynamics of the oil & gas

sector extending beyond the geologyand seismology of locating and extract-ing raw energy sources from under-ground or beneath the sea, to includethe various individual segments of theindustry vertical as a whole, the commu-nications requirements of the industryare obviously very extensive. Panel 8will explore the practicalities of extend-ing the bandwidth employed by the‘turnkey solutions’ that are so oftenrequired by ICT mangers in the sector toa true end-to-end connectivity, that isable to serve not only the entire range ofoil & gas industry communicationsdemands at any one physical locationbut which can also be used byorganisations and agencies within thelocal area, such as schools and localgovernment offices, at times when theindustry’s demand on the availablebandwidth is low. A new take on sharingthe benefits of connectivity and Bridg-ing the Digital Divide! SM

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STOCK MONITOR

For real-time stock quotes go to www.satnews.com/free/finance.html

ADVERTISERS'INDEX

Advantech AMT 9www.advantechamt.com

AVL Technologies 34www.avltech.com

COMTECH EF DATA 7www.comtechefdata.com

CPI SATCOM 27www.cpiik.com/satcom

Global Link 14www.globalinktv.com

L-3 Narda SatelliteNetworks 20www.lnr.com

NEWTEC 26www.newtec.be

MITEQ 18www.miteq.com

RADYNE 24www.radn.com

Wavestream 38www.wavestream.com

APT SATELLITE ATS 1.79 1.12 - 2.10ANDREW CORP ANDW 13.43 10.07 - 14.19ASIA SATELLITETELECOMMUNICATIONS(ASIASAT) SAT 17.30 15.91 - 20.55BALL CORP BLL 42.66 35.06 - 46.45BOEING CO BA 74.13 53.33 - 74.61BRITISH SKY ADS BSY 36.83 33.59 - 44.78CALIFORNIA AMPLIFIERCORP CAMP 10.10 5.23 - 12.59C-COM SATELLITE SYSTEMS CMI.V 0.30 0.00 - 0.00COM DEV INTL LTD CDV.TO 2.38 0.00 - 0.00COMTECH TELECOM CMTL 31.62 22.9333 - 45.65THE DIRECTV GROUP DTV 15.80 13.17 - 16.79ECHOSTAR COMMU-NICATIONS DISH 29.82 24.44 - 32.33FREQUENCY ELECTRONICS FEI 12.99 9.80 - 15.74GILAT SATELLITE NETWORKS GILT 8..29 5.68 - 10.26GLOBECOMM SYS INC GCOM 6.36 5.09 - 8.44HARRIS CORP HRS 47.25 27.25 - 49.78HONEYWELL INTL HON 41.57 32.68 - 42.93INTL DATACASTING IDC.TO 0.275 0.00 - 0.00INTEGRAL SYSTEMS ISYS 28.56 18.18 - 28.75KVH INDS INC KVHI 10.51 8.54 - 11.64L-3 COMM HLDGS IN LLL 84.54 64.66 - 84.84LOCKHEED MARTIN LMT 74.06 58.28 - 74.97NEWS CORP NWS 17.14 14.76 - 18.63NORSAT INTL INC NSATF.OB 0.7938 0.43 - 1.51NTL INC NTLI 63.18 55.52 - 70.79ORBITAL SCIENCES ORB 15.47 8.84 - 15.48PT PASIFIK SATELIT PSNRY.PK 0.02 0.09 - 0.30QUALCOMM INC QCOM 48.35 32.08 - 49.45RADYNE CORPORATION RADN 14.23 7.15 - 16.33SIRIUS SATELLITE RADIO SIRI 5.23 4.42 - 7.98SES GLOBAL FDR SDS.F 12.45 6.70 - 12.47TRIMBLE NAVIGATION TRMB 41.04 26.64 - 44.55WORLDSPACE INC WRSP 11.56 10.26 - 26.00VIASAT INC VSAT 27.61 17.30 - 29.17XM SATELLITE RADI0 XMSR 21.69 21.44 - 37.31

Company Name Symbol 52-wk Range(February 27)Stock Price

http://www.nardamicrowave.com

http://www.radn.com

http://www.miteq.com

http://www.newtec.be

http://www.globallinktv.com

http://www.advantechamt.com

http://www.avltech.com

http://www.comtechefdata.com

http://www.wavestream.com

worldwide satellitem magazine vol. 4 no. 11 arch 2 07back to contents 2 march 2007 satmagazine.com...

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