Satellite Uplinking
New Skies Ready for expansion October/November 2001

Netherlands-based New Skies Satellite (NSS) is a satellite operator which is quite happy to take uplinked signals from any one of the major uplink businesses, but is also seeking to provide its own direct uplink service.

As a general sign of progress it recently reported impressive end-of-year figures, with revenues for the year to Dec 31st 2000 up 46 per cent at $193.3million ($135.5 million for 1999). Bob Ross, New Skies CEO said the company, itself barely two years old, was now on the acquisition trail. "We are in a pretty good position. We are profitable and have no debt. So, should an attractive target proposition come along we are in the right position to take advantage."

It is also possible that New Skies, which operates a string of satellites around the globe, could itself be a take-over target and it is reported that Paris-based Eutelsat has its eyes on New Skies assets.

Ross says he has two primary strategic expansion objectives. "The first is that the business must be in our core business, an FSS company, and where the orbital slots would be complementary and not duplicate [that which we have]." His second covered Internet-related satellite businesses, which have grown in importance by some 350 per cent over the past year, and he says he would be looking at prudent opportunities in that area providing the cost of acquisition was within reason. To help cope with this trans-Atlantic traffic New Skies is building its own uplink teleport near Manassas, Washington DC, USA.

Indeed, Internet-related uplinked business represents 24 per cent of NSS overall revenues, still behind video which is still around 56 per cent of NSS income (but video is down from 77 per cent of the revenue mix) with 20 per cent of traffic coming from telephony.

Ross says Intelsat and PanAmSat remain NSS' main competitors. Ross reported that video traffic grew by 12 per cent year-on-year, while telephony/data grew 14 per cent and internet by 350 per cent. "All sectors are growing, but Internet is the driver." Ross added that there is no sign of any US slowdown in demand, "And we see Internet-based demand continuing to grow this year."

NSS is experiencing "considerable growth" in revenue per transponder, and transponder utilisation, which this year is up from 48 per cent on November 30 1998 (the date when Intelsat transferred assets into the proposed New Skies) to 63 per cent," on station-kept satellites as at Dec 31 2000.

Ross says he foresaw no decline in this increased utilisation model. As to NSS client base, it inherited 71 customers from Intelsat, closed 1999 with 109 clients and finished last year with 159 customers. Top Ten major uplink clients include Telecom Italia (14 per cent of revenue), Comsat, British Telecom and France Telecom.

As to new business pastures, Ross says that India remains a very attractive market for NSS. NSS has six other vacant authorised orbital slots, one of which (95 deg East) will be filled by NSS6, optimised for intra-region Asian use. NSS' other slots are within the arc from 105 deg W to 133 deg W, serving North and South America. "We will build here first," says Ross. "But we are looking at the availability of slots in other regions and we are very interested in the Indian Ocean region and believe we will be expanding our orbital assets in this region."