SP: For those not yet familiar with Axesat, please provide a high level description of the company including origins, current services, markets addressed and countries where Axesat operates.
Segovia: Axesat was created in 2003. This year we celebrate our 12th year of operations. We provide telecommunications satellite solutions for enterprise customers who use our services for data, voice, video and Internet applications. Our company currently operates in Colombia, Peru, Ecuador, Chile, Mexico and Central America. Our presence is strongest in vertical markets that operate outside urban areas such as Oil and Gas, Mining, Infrastructure, Energy and Government (not universal service type of projects but government agencies that use our services to operate). However we also have an important presence in other sectors such as banking, financial services, retail and others.
SP: Can you share with us information about Axesat´s infrastructure and network? Teleports, satellites, amount of capacity leased from operators and deployed VSATs across Latin America?
Segovia: We have teleport operations in Colombia and México. Currently we have more than 12,000 sites installed at enterprise customers throughout the region. We work mostly with Gilat and iDirect equipment and use their products to provide a full range of satellite telecommunications solutions (TDMA and SCPC). We also have more than 300 Mhz leased with the “big four” satellite operators.
SP: As the leader of a specialized satellite service provider, what are your ideas or concerns about high throughput satellites (HTS) in the pipeline and how this shift could affect the markets where Latin American service providers like Axesat operate?
Segovia: HTS is finally a reality in our region. It took longer to get to LATAM than most other regions. It began last year with the Hispasat/Media Networks initiative but with limited coverage and product offering. However during the next couple of years there are important projects coming to the region that will have an important impact on our landscape. We believe the changes brought about by HTS will be good for us and for the industry in general. Cost per bit price points will come down and that should improve access to opportunities and market segments. For us a big challenge will be to adopt those new satellite technologies while still operating on traditional satellites. Defining when, how and in what cases it makes sense to use the new satellites will be our bread and butter going forward.
SP: What are the your thoughts around the so called “open” and “closed” HTS business models? Can both models co-exist in the long run? Threats and opportunities?
Segovia: In Latam I believe the open HTS models make more sense and have a higher probability of being successful. For service providers like us, open systems are the only way to go. By definition, considering closed system do not include players like Axesat in the value chain, but also because in most cases the requirements of our customer cannot be satisfied with the solutions provided by closed models.
I think closed models are going to have important challenges in order to be successful in the region. As a matter of fact, my understanding is that closed models are having a tough time almost everywhere in the world except in the US. By definition most closed systems are focused and designed for residential and small business broadband initiatives. In Latam residential and small businesses that are able to pay for a Us$40 broadband service are mostly in main cities. Or at least outside the main cities there aren’t enough customers that are able to pay for such services to support the scale needed for the closed models to be successful. On the other hand in cities closed models face harsh competition from terrestrial players which have several advantages vs satellite service providers (triple play offerings). Something that might improve considerably the chances of having successful players with closed models in the region will be Government Universal Services type of projects. Many countries have been toying around with these initiatives for years and, in most cases, such projects have a very important satellite component. Closed models service providers seem to be able to provide products that are a good fit for such initiates.
SP: A transition to HTS for non-broadcast applications is highly anticipated as satellite operators deploy substantial HTS capacity that lower the cost per bit of transport. What services and applications do you envision have best potential to more rapidly transition to HTS in Latin America? Residential broadband, enterprise VSAT, mobility, cellular backhaul?
Segovia: From our perspective Enterprise VSAT and cellular backhaul are the services and applications which stand to benefit the most and more rapidly with the new HTS initiatives in the region.
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