Loral expects to bill US$10mn-15mn on new satellite

Brazilian satellite services provider Loral Skynet do Brasil expects to bill between US$10-15mn on services from its Ku-band Telstar 14/Estrela do Sul 1 communications satellite this year, company executives said. The sum is half the the amount originally expected, because of problems with deployment of solar arrays on Estrela do Sul 1, Terry Hart, the president of the company's parent, Loral Skynet, told BNamericas in a recent interview. The satellite was launched on January 11 and although it fully deployed its south solar array, it only partially deployed its north array, and is producing enough power to operate a minimum of 17 out of the 51 transponders. The problems mean the new satellite will only serve Brazil and North America, and not Andean nations as originally planned, Hart said. Loral has not signed any contracts locally yet but expects to sell 80% of capacity by year-end, he added. Half the operating capacity, or five to seven transponders, is reserved for the Brazilian market, according to local regulations, and the other half will be used for North American companies including airplane manufacturer Boeing, Hart said. However, the bulk of actual revenue will come from customers in North America, he added. The company will likely launch a second and maybe a third small satellite complementing Estrela do Sul 1 over the next two to three years. "If you want to be a global operation you have to have business in Brazil," Hart said. Loral Skynet do Brasil has served the Brazilian market since 1999 via its TelStar 12 satellite which resides closer to Europe. Today the company serves four customers locally, including television broadcast company Globo. Brazil is home to near 12 satellite companies total, of which three are locally-owned. Brazil will see little growth in the business of selling satellite capacity to broadcast companies in coming years, according to Hart. Real growth potential will come from broadband and broadcast outsourcing services, he added. Loral sees potential for more revenue in Brazil on the regulator's plan to sell broadband service licenses this year. Loral will not bid for a license, but expects operator licensees to request satellite coverage of rural areas. Loral participated in the regulator's public hearing process to refine the license bidding rules, Loral Skynet do Brasil director Marcelo Sant'Anna said. The company suggested that Anatel do away with minimum data transmission speed requirements, since some applications can be sent over low speeds and save capacity. The license is known locally as SCD. Loral Skynet billed near US$300mn in 2003, and is in the process of selling half its satellites to pay debt.