The Changing Business of Teleports

 

By Virgil Labrador

     Editor, Satnews

 

 

It has been six years since I worked in a teleport in Singapore and the business has changed profoundly ever since. Teleports are the backbone of the satellite industry. They consist of ground facilities that provide a variety of services including satellite ground control, transmission, playout and now internet and other services via satellite, fiber, microwave and other networks.


The first teleports in the U.S. consisted mainly of small facilities with a few dishes run by entrepreneurs. Today the business is dominated by larger companies. As the World Teleport Association’s ( WTA) annual “Teleport Benchmark” report says, the big companies in the teleport business are getting bigger and growing at a faster rate than medium and small companies.


The WTA also provides an annual list of “Top Teleport Operators” and curiously, five of the top ten are satellite operators, namely, Intelsat, PanAmSat, Telesat Canada, Space Communications Corp. and Telenor Satellite Services. Over the years, satellite operators have been heavily investing in teleport facilities. Recently, US-based satellite operator, SES Americom, purchased service provider Verestar, which owns substantial
teleport facilities worldwide.

 

The “Teleport Benchmark” reports that three major trends driving the industry are: financial recovery, consolidation and service diversification. Other key findings include:


Scale is Important: The larger the company the more it gets in terms of revenue from its facilities. For example, large operators (those with revenues of $70m or more annually) generate an average of $34.5m in revenues from every teleport and $1.5m per antenna, compared to $3m per teleport and $598k per antenna for
small operators.


End-to-End Solutions will Dominate: 100 per cent of respondents to the WTA survey in 2004 agreed that end-to-end solutions will dominate the future of the industry, Teleports Are High-Value Sales Channels. For companies that sell products and services through teleports, the 2004 study confirmed the importance of the teleport channel. The large operators in the 2004 sample sold or resold $82m in transponder capacity and $24m in fiber capacity per year. The average midsize Sponsorships and Exhibiting Options at ISCe 2005 Promote your product or services to a senior-level audience of key decision-makers from the commercial, government and military sectors by securing one of the available sponsorship packages or exhibiting options at ISCe. For additional information, please contact Gina Lerma at (310) 410-9191 or GLerma@hfusa.com or go to www.isce.com company in the survey sold $12.4m worth of transponder capacity, while small operators resold $1.8m per year in satellite usage. In terms of spending on antennas, RF equipment and other capital assets, a teleport operating company with $20 million in revenues represents $4.65m in buying power, while a
$500 million operator presents a $24m annual sales opportunity.

 

Top Five Markets: the top five markets for the teleport industry will be (1) enterprise networking, (2) video backhaul for TV contribution and distribution, (3) enterprise video & audio (BTV), (4) government and military, and (5) Internet content hosting and distribution.


These and many other issues affecting the teleport business will be discussed in a panel dubbed “Evolving Teleport Solutions for Enterprise” at the forthcoming ISCe Conference and Expo to be held at Long Beach , California from May 31-June 2, 2005. The session will be moderated by Satnews and will focus on the evolution of the teleport business and how it is coping with the changing market forces in the industry. A panel of speakers representing major teleport operators and users will be participating in the panel. There will also be a pre-conference half-day workshop on teleports to be conducted by the WTA.


We look forward to seeing you at ISCe in May.

 

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Virgil Labrador is the Editor of the Daily and Weekly editions of Satnews and  Managing Editor of  SatMagazine (www.satmagazine.com).  He has worked for the last 16 years in various capacities in the satellite industry, most recently as marketing director of a full-service teleport in Singapore then owned by the US broadcasting company, CBS. He can be reached at virgil@satnews.com 

 
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