By Ken Kerschbaumer -- Broadcasting & Cable, 1/20/2002 7:00:00 PM
What should the industry expect in the way of satellite trends for 2002?
One of the things broadcasters are looking for is a sense of stability in their satellite provider. Particularly in the last 18 months, there has been a push to have a satellite provider who can offer a wider range of services beyond base segment. And many of our customers have been on an expansion program, where they're taking the programming outside of their current markets and borders.
Should your customers be concerned at all about what is going to happen with PanAmSat with respect to its being sold by Hughes?
No. Even though we have the Hughes ownership today, we have an independent management team, and we're an independent company. And the contracts we have with customers will be honored regardless. I meet with customers, and I'd be lying if I said this didn't come up. But they just want some sense that the company is stable. When you look at the satellite industry, there is already consolidation, so things are going to change. But the company that has the strongest customer base and best financial plan and customer service is going to win, and we think we're positioned well in all those areas.
I see that you have plans to get about a billion dollars worth of satellites up in the air.
Right. In fact, we have four launches scheduled for 2002. Since the fourth quarter of 1999, we've had six successful launches. That's a deployment of 328 transponders with 100% success, and we're building on that. The four launches are primarily in the Galaxy fleet. What that will do is provide our broadcast customers with capacity and give us a little more robust back-up solution. In the cable-distribution business, that's important.
Can you talk a little bit about the $15 million deal you recently signed with Viacom?
We've had a longtime relationship with them, and, if you look at the most recent agreements, the thing that is most significant is, they're long-term. They'll have Viacom on the fleet until 2017 on the Galaxy 5R satellite, which is a new satellite that will be launched in the next couple of years. The other thing that is significant is its new channels to the portfolio: Showtime and BET.
There is lots of talk concerning Ka-band satellite service. Are there any plans for PanAmSat to launch satellites for Ka-band?
We're focused on providing our core customers with the services they think they need now and in the future. As new technologies become available and our customers have services that could be a good match for that technology, then we'll move forward. Seventy percent of our business is with the world's premiere content providers, and, if a number of them come together with a requirement that is a good fit for Ka-band, we're going to be all over it. Frankly, that's why we started Net36 and some of the other things we're looking at, like video-on-demand and pay-per-view with the cable operators.
But is a true VOD service capable of being delivered via satellite?
Satellites have some unique qualities. They hit the ground, and there are things you can do, like installing servers at an MSO, that is a nice solution. These are technologies that we make investments in, work on and are very active in trialing with our customers.
What's your take on your revenue projections for this year? I heard reports that the expectation is they'll be flat.
We're going to have growth in earnings and strengthen our cash position. Our revenues will be flat, but that's by design because the key for us is the core customers. It isn't getting caught up in new businesses like Internet startups and some of the other things a lot of people have been through in recent years.
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