HISPASAT TO TAKE REDUCTION IN SATELLITE DELIVERIES AS IT CHANGES ITS INVESTMENT FOCUS
NEWTOWN, Conn. -- For many years, HISPASAT fueled its growth by expanding operations in Latin America. The Spain-based now generates the majority of its revenue from operations in Latin America instead of its home market of Europe. HISPASAT is utilizing its orbital-slot rights at 61° W and 30° W to expand business in the region. In addition, the company recently won an auction for rights to 74° W, which it has begun to use to continue to grow operations.
Still, HISPASAT is facing increasing competition in the Latin American market as well as in the broader satellite market. Local competitors, such as Star One of Brazil, and national providers in countries like Venezuela will meet many of the capacity needs of the region. In addition, larger global players are focusing more on Latin America. For example, SES SA and Eutelsat both won rights to orbital slots over Brazil during a recent auction.
In the broader satellite market, HISPASAT is dealing with the same competitive pressures that other companies are dealing with. Namely, the growing popularity of high throughput satellites (HTS) have expanded the amount of capacity on orbit and put downward pressure on the prices that satellite operators can charge their customers.
As a result of these factors, HISPASAT has begun to change its strategy. The company abandoned plans to have 10 satellites on orbit by the end of 2017. HISPASAT now has eight satellites in orbit and plans to retire Hispasat 30W-4 shortly, leaving seven total satellites in geosynchronous orbit.
At the same time, HISPASAT has joined the wave of satellite industry incumbents investing in low Earth orbit satellite operator startups. In July 2018, news broke that HISPASAT invested an undisclosed amount of money in LeoSat, HISPASAT plans to market LeoSat capacity and utilize its technology for its own use.
Operating fewer of its own satellites and using money to invest in LEO startups will result in a significant reduction in deliveries of geosynchronous satellites to HISPASAT. This is not to say that HISPASAT will not take delivery of any new satellites. After a lull between 2018 and 2024, deliveries will resume. HISPASAT is expected to take delivery of new satellites at a low but steady pace during the late 2020s and early 2030s. These satellites will be used to replace current spacecraft as they reach the end of their service lives. They will likely feature higher capacity, enabling HISPASAT to increase bandwidth while maintaining the same number of satellites in orbit.
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