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WorldSat 1999 Review
by Owen D. Kurtin
From June 14-16, leaders of the satellite industry, executives, financiers, analysts and space law specialists convened atop the World Trade Center in New York City (http://www.windowsontheworld.com) for "WorldSat 99: Space & Satellite Finance Conference - Financing the Race for Critical Mass, Key Distribution Channels & Market Share" (http://www.iir-ny.com), one of the leading international conferences on developments in satellite technologies, including launch systems, satellite television and radio broadcasting, mobile telephony, broadband services and remote sensing applications. The Institute for International Research organized the event. The program was divided into three parts:
1) emerging technologies and applications in satellite;
2) applications and markets; and
3) financing techniques and developments.
The Conference tried to assess the role of satellite in the communications future. The key question on the agenda: If we build it, will they come?
Speakers identified certain trends in the market. They took stock of the past year's fail-ures in satellite mobile telephony and the overwhelming success of direct-to-home (DTH) broadcasting marked by the consolidation of the market around two players, Echostar (http://www.echostar.com) and DirectTV (http://www.directtv.com) and their resellers. The recent decision by GM and Ford to offer on-board satellite radio packages from XM Satellite Radio (http://www.xmradio.com/) and CDRadio (http://www.cdradio.com), respectively, is seen as a boost to DARS (Direct Audio Radio Service) and the satellite industry. Digital broadcasting services (DBS) are now expected to reach a wider audience than the rural populations they once served in the USA and open up new markets, including Asia. Tough competition is expected from digital cable services.
The future of MSS (Mobile Satellite Service, the LEOs and MEOs) is not so clear. Iridium's miscalculation of the potential market and the right price point for its product has raised doubts about demand for satellite telephony. In densely populated areas, satellite cannot yet compete with cellular and PCS wireless solutions and for underdeveloped areas the prices are too high. The future of satellite broadband services, including high-speed Internet and multimedia, suffers from the same uncertain prognosis. Commercial remote sensing and narrowband services such as paging and global mobile messaging, positioning, navigation and tracking services have all made exciting technical strides but the satellite "killer app" to wow the market is not in these sectors. Though the industry's capital needs have increased with the growing range of services, opinion is divided as to whether there will be a satellite IPO this year at all.
There was also discussion during the conference of a draft protocol of the Space Working Group (http://www.spacegroup.org) of the UniDroit Convention (International Institute for the Unification of Private Law) in Rome (http://www.unidroit.org) to create security interests in space property to facilitate financing.