Larry Valenciano is Regional Vice President, Asia-Pacific Sales, for Intelsat, an international communications provider that connects billions of people in more than 200 countries and territories via capacity on 21 satellites. In this capacity, he is responsible for business development and marketing Intelsat services in the region. Mr. Valenciano, a citizen of the Philippines, joined Intelsat in 1990. Prior to becoming Regional Vice President, he held positions in the Sales and Marketing Division including Group Director, Asia-Pacific Sales Product Manager for Domestic/Regional Services; and Product Manager Cable Restoration Service. His responsibilities have included the development/establishment of domestic satellite applications in Latin America, Africa and the CIS states. Before coming to Intelsat, Mr. Valenciano worked with PHILCOMSAT, in the Philippines, where he established the first customer premise IBS station, participated in the design of a Standard A station & TVRO station, TDMA implementation and numerous other projects. Larry Valenciano holds a B.S. degree in Electronics and Communications Engineering from the University of Santo Tomas in Manila, Philippines. He is a member of various international organizations and has represented Intelsat at a number of international conferences. He also serves on the Pacific Telecommunications Council’s Board of Trustees.
Geo-stationary satellite communications have grown rapidly, fuelled by deregulation, digital technology, enhanced satellite capacity, increased demand and a wider range of applications. The global economic downturn has harmed this sector, but there are still opportunities to provide end-to-end solutions. Satellite-broadband Internet access market in the Asia-pacific could reach US$4.51 billion in the US by 2006. South Korea has the highest household penetration (55%) for Internet access; China and India are far behind. The sector should grow strongly in Asia – Pacific during the next 10 years.
As in the 1980s, a host of factors contributing to convergence are creating new service opportunities in markets such as the Asia-Pacific region that will outlast the economic downturn. A little more than a decade ago, the satellite industry was in the throes of a downturn. Fibre was siphoning away telephone traffic, then the dominant source of revenue, and consolidation was the order of the day. In the end, the number of fixed satellite service (FSS) provides in the United States was reduced from nine to three. There was, however, a silver lining. The slump of the 1980s led to a period of unparalleled growth and a transformation of the entire industry, driven primarily by a seemingly insatiable appetite worldwide for Internet connectivity. Unfortunately, that appetite apparently wasn’t nearly as large as projected and the 21st century began with the entire telecommunications industry in a challenging economic cycle. This time, the main obstacles included excess capacity, an Asian economic crisis that stalled satellite projects in the region, failed Internet projects that led to cancelled orders for satellite capacity and, finally, a full-scale global financial downturn which hit the telecommunications industry very hard and further eroded the demand for satellite capacity. While the telecom sector continues to take a beating, the innovative drive of the 1990s doesn’t seem to have lost much of its lustre. As was the case with the slump of the 1980s, there have been some changes in the direction of the FSS industry, with new and improved strategies in furtherance of global connectivity. In effect, the troubled economic climate – along with the push towards globalization – has spawned new industry opportunities, moving the technology away from a ‘killer application’ mentality into more of a complete solutions/end-to-end service mode that focuses on meeting the needs of customers. Market Evolution Liberalization and privatization also have contributed to an era that has forever changed the telecommunications environment. Traditional boundaries between telecommunications, computing and media have become increasingly blurred. At the same time, solutions that require the interconnection of satellite, wireless, microwave, cable TV networks and telephone lines have become more common. Geo-stationary satellite communications have experienced rapid annual growth, fuelled by a confluence of factors including deregulation and the advancement of digital technology, and enhanced satellite capacity, increased demand and a wider range of applications. For example, the demand for high-speed Internet access is viewed as a critical benchmark for the recovery of the satellite picture in the Asia-Pacific region. According to survey firm Nielsen/NetRatings’ Second Quarter 2002 Global Internet Trends report, Hong Kong is the world leader in the number of users accessing the Internet via high-speed connections, at 54 per cent. Northern Sky Research predicts that the satellite-broadband Internet access market in the Asia-pacific could be worth as much as US$4.51 billion by 2006. South Korea stands out as the most penetrated, with more than 9 million broadband connections, representing a household penetration of about 55 per cent. In many other parts of the region, governments are working to deregulate their telecommunications policies in order to upgrade their delivery systems and position themselves to take advantage of globalization. There is a considerable amount of demand for bandwidth, particularly in emerging market giants China and India. Both have low Internet penetration for nations with large populations. China recently joined the World Trade Organization and is hosting the 2008 Olympics. India recently opened its basic telephony market to foreign investments, with a cap of 49 per cent, and in Taiwan, full privatization is due to become effective by the end of this year. These and other factors in the Asia-Pacific, and globally in general, point to better times ahead. The latest 10-year satellite demand forecast by the Futron Corporation says the business, while volatile, has a solid base and growth potential. While the future is not likely to follow a straightforward path, opportunities do exist for those who take a flexible approach, it says. “Satellites will continue to be required to meet key telecommunications services needs.” The largest demand growth is anticipated to be in consumer services, such as last-mile, broadband and DTH, expanding at a much faster pace than infrastructure services such as trunk telephony or ISP-to-backbone services. ‘Satellites will continue to be required to meet key telecommunications services needs,’ the report states. ‘These needs are not spread uniformly in either time or geography, and each individual market demonstrates patterns of demand.’ Meanwhile, leading satellite companies are instituting the major transformational changes necessary to keep up with the pace of new development and expanding demand. In the last few years, the industry overhaul has included the privatizations of Intelsat, Inmarsat and Eutelsat, along with the consolidation of SES Astra and GE Americom into SES Global. The transformation of the global information economy was a primary focus of the industry’s privatization. The sector is experiencing a move towards a customer-centric strategy that relies more heavily on gathering intelligence from clients for developing efficient and timely solutions that meet their service needs. The flexibility of being a private company has enhanced the ability of the sector to respond to market demands with a competitive, nimble, customer – oriented focus. Today, these companies offer Internet, broadcast, telephony and corporate network solutions in more than 200 countries and territories of all sizes and financial conditions. The business is driven by capacity on satellites in prime orbital locations. In the last two years, satellites have been launched constantly with the goal of upgrading the system – giving customers access to service on high-powered spacecraft and moving older satellites to new slots where new low-cost customer communities can be formed. More launches are scheduled through 2003. To handle the additional traffic of the new satellites, there is an ongoing process of acquiring ground assets – teleports, fibre and Points-of-Presence (PoPs) – in strategic locations to complement existing geostationary resources and offer end-to-end, hybrid space/terrestrial services and solutions. This has the additional benefit of allowing customers to engage in one-stop-shopping for all of their connectivity needs. Mergers and acquisitions in the sector have consolidated facilities – such as earth stations, teleport facilities, antennas and related assets – of various companies into larger networks with POP (points of presence) connected by fibre at key traffic exchange points. The new resources, linked with existing satellite capacity, pave the way for the delivery of voice, data, Internet and video content via a hybrid delivery system designed to offer tailored end-to-end service with the one-stop-shopping experience. The introduction of high-speed broadband services via satellite provides Internet access for e-mail, Web browsing and e-commerce applications for small- and medium-size businesses in underserved regions. With IP/PSTN convergence appearing to be inevitable, another technology that finally is beginning to grow in popularity is Voice over Internet Protocol (VoIP), and there are growing opportunities via satellite. While VoIP via satellite works in much the same way as a terrestrial network, the advantages of using satellite include ubiquitous coverage and consistent worldwide quality of service, regardless of distance, geography or population density. A VoIP via satellite component is part of a satellite service that links the remote southern Sahara enclave of Timbuktu to the Internet. In a joint effort involving Afripa Telecom, national operator Sotelma and Intelsat, calls on the network are delivered to a gateway where the traffic is converted to IP packets. Here to Stay Satellite industry evolution is a process that began long before space travel and it has been filled with episodes of science fiction that ultimately have become scientific realities. Think for a minute about the space suits that Neil Armstrong and Buzz Aldrin wore when they became the first humans to walk on the moon in 1969. The suits were very similar to those that began appearing in comic strips and cartoons as far back as the 1930s. The same is true for geostationary satellites. Sir Arthur C. Clarke correctly surmised back in 1945 that global satellite communications could be accomplished by using three satellites positioned along the equator about 36,000 kilometres from Earth. The system he devised back before the advent of space travel is still in use today. Those first steps on another celestial body and the first communications via satellite likely were not that much of a surprise. Predictions of man’s adventures in outerspace are prominent in history. However, science fiction writer Isaac Asimov noted that the prognosticators had missed one very remarkable event of the lunar landing. No one predicted that when the moonwalk took place, the entire world would be able to watch it on television via satellite. Satellites have been an integral component of communications for nearly four decades and I think it is safe to conclude that bad financial times may come and go, while satellites are here to stay. For more information, please visit www.intelsat.com