Telesat moves toward revival in today’s satellite market by sticking to core business

Telesat VP corporate development Paul Bush was the featured speaker last week at the Technology Executives’ Breakfast in Ottawa. The following is adapted from his presentation. Telesat was created in 1969 with a mandate to provide basic service to all Canadians regardless of location. The Anik A1 satellite was launched in November 1972 to provide TV and telephone service for the first time to isolated communities. Today, we are 480 employees, a highly technical and specialized home-grown work force. Our Canadian expertise exported to the world. In 2001 we had revenues of $320M; 20 per cent of that came from outside Canada. We have seven generations of satellites providing increasingly more capabilities and services. In 1972, 37 communities were provided with CBC and telephone service. By 2002, 99 per cent of all TV in Canada is carried on Anik and NIMIQ satellites. We expect to have nearly two million Direct-to-Home (DTH) customers by end of year. Our Advanced Information and Telephony services are provided to industry and government customers in the U.S. and South America. Telesat operates in a highly competitive market today. The government has licensed almost 50 foreign satellites that cover Canada, belonging mainly to large U.S. and European operators. The satellite business is highly capital intensive. Over the last five years we have invested almost $2 billion in satellites: Telesat has built & launched Anik F1 and Canada’s first DBS satellite, NIMIQ; we are now constructing Anik F2 and NIMIQ 2. Continued Canadian presence in the global satellite marketplace requires continued development and expansion. The scope and scale of Telesat’s business has changed to anticipate the new WTO environment and the major trends in satellite industry. We continue to focus on our core business. "Stick to your knitting"—continue to do what you do well domestically and apply it to new geographic markets. This establishes a critical platform to compete and to leverage future expansion plans. Telesat has secured service commitments from key sectors in Canada and is using those strengths to apply to U.S. market. If you need new channels to market for your product, partner with a company that already has those channels. New financing is more readily available where a company’s value increases through growth of its core business, rather than starting new business units or new directions.Identify what your future market will be, while working within current market realities and limitations. Focus on key technologies—improve their efficiencies, develop cost-effective models. Focus on R&D—have applications ready in anticipation of market demand. Real R&D means having customers waiting.At the same time, we must expand on Telesat’s core business. North American DTH subscribers are approaching 20 million. Estimates are that 25-30 per cent of households will not have high speed access. Therefore, demand is strong. Enterprises are demanding more and cheaper bandwidth alternatives. High-speed satellite links to other communities may be used for telehealth, videoconferencing, and similar ventures. Flexible capacity is available now. High-speed Internet access is available anywhere. Look at the Anik F2 capacity: it has 200,000 to 300,000 users across Canada and 400,000 to 600,000 users across the United States. Telesat is building on its existing infrastructure and operations. The cost-competitive North American Ka-band spot will beam its payload on Anik F2. It was six years in development and will be the first of its kind in North America. We have extensive working relations with government departments and the provinces to facilitate rollout of high-speed broadband access to all Canadian communities by 2005. We will introduce new products and services to the installed base of customers in Canada and the U.S. Telesat has all of the necessary building blocks to cost-effectively provide satellite broadband services. We have technical expertise in the sky and on the ground. We have the customer base, the sales force and the channels to market through partnerships.

Telesat moves toward revival in today’s satellite market by sticking to core business

News | November 4, 2002

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