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Canada’s Telesat wins major Brazilian deal

Ottawa-based satellite operator Telesat says its latest Q2 grew slightly despite suffering industry-wide declines in transponder lease prices of some 10-15 per cent in Latin America and 15-20 per cent over Asia.  Telesat’s Q2 revenue of C$232 million ($178.4mn), up 2 per cent from a year ago and up 1 per cent after accounting for the US dollar’s rise in value.

Telesat’s fleet comprises 15 satellites plus Telstar 19V on order, as well as Telstar 18V which is co-owned by APT Satellite of Hong Kong.

CEO Dan Goldberg said its upcoming Telstar 19V Ku and Ka-band craft, not due to launch until 2018, had already achieved a “large” Ku-band contract with a Brazilian client.  Telesat has also sold some Ka-band capacity to Hughes Network Systems for use over Brazil.

Goldberg, in a conference call with industry analysts, said Telesat’s had won the contract from an incumbent satellite provider – which he did not name.  He said Telesat’s winning bid was at a price that was not dramatically lower than prevailing price conditions in Latin America, although the company was obliged to offer free capacity for a limited period to allow the customer to repoint its satellite dishes to Telstar 19V, to operate from 63 degrees west under a Brazilian license.

As to satellite over-capacity in some markets, Goldberg said there was excess capacity, and has been the case for at least a year now,” adding that “Demand is still growing; folks want more bandwidth. But industry is going to have to digest” the over-supply by cutting capital investment to give time for demand to grow into the existing capacity. “Operators are exercising more capex restraint and the excess supply will be mopped up,” Goldberg said. “These conditions have been true for at least 18 months and it will take two, three, or maybe five years to recover.”

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