Skip to content

ILS at Euroconsult 2008

Date of News Item: 
September 10, 2008

ILS participated in one of the industry’s premier events last week, the World Satellite Business Week conference hosted by Euroconsult in Paris. The event was well-attended with more than 400 participants that included industry leaders from the satellite operator, manufacturer, launch and services sectors. Here are some of the major issues that participants addressed:

 

Satellite Business is Robust

The leading satellite operators – SES, Intelsat, Eutelsat, Telesat and Inmarsat – discussed their strong financial results and upbeat forecasts on the panel titled, “Global Operators in a Changing World.” These operators are experiencing increased demand for capacity worldwide, with fleet utilization rates rising across the board. Direct-to-home and high-definition television, along with increased demand for services from government users, are driving growth for the FSS operators.

While the global operators remained bullish on the market, regional operators were more cautious about local market conditions and rising costs. The satellite capacity wholesale markets in Asia and Latin America have shown improvement over the crashing lease rates caused by oversupply in the last decade. In Eastern Europe, the Middle East and Africa, demand for satellite services shows significant growth, prompting the procurement of expansion satellites and new systems.

 

Launch Remains a Concern

Despite these healthy market conditions, all operators expressed concern over the reliability, availability and cost of commercial launch services.

Reliability of launchers was a consistent theme throughout the conference. Clearly, the recent failures and necessary recovery time for two of the top three commercial launch providers had an impact across the industry. ILS and Khrunichev understand these concerns and have implemented a system-wide Quality Initiative to address them. We have taken the first steps, and returned to flight with the successful launch of Inmarsat 4 F3 last month. This is just the beginning of a comprehensive approach to quality for every mission, at every level of the Khrunichev and ILS organizations. We will report on our progress regularly and invite you to visit our website for the latest status.

There also was debate over available launch capacity versus launch demand in the market. While most launch companies believe that the market has achieved equilibrium between supply and demand for launch services, operators and manufacturers would like to see more launch companies in the market to allow for greater flexibility in launch options.

Nearly every discussion came back to the same theme on launch services – rising cost. Conference participants frequently noted the steep rise in launch prices over the last few years. This is one area where the major commercial launch providers are all in agreement – to continue to provide reliable and consistent service, providers must be able to make a return on their investment. The industry is currently launching missions that were sold at bargain prices a few years ago, during the heated competition for market share, and the industry is paying the price for these discounted launches. At least two major vehicles effectively exited the commercial market, due to losses and the drain on shareholder value. We can’t support those prices anymore, as a considerable increase in cost of materials, inflation and exchange rate fluctuations have dramatically increased the cost providing of launch services. At ILS, we have raised prices to levels that put us on the path to profitability for the commercial Proton system.

Connect with ILS

Facebook Twitter YouTube Linkedin