PanAmSat plans to become the first private operator of a fully global communications satellite system.

Tim Furniss/LONDON


PanAmSat, of Greenwich, Connecticut, will not let a little problem like a failed Ariane launch and a lost satellite get in the way of its bold plans to become the first organisation to compete globally with Intelsat. Its PanAmSat (PAS) 3 satellite was lost in the V70 Ariane failure on 1 December, 1994, but a replacement, the PAS 3R, was ordered from Hughes for a possible launch in 1995, while the PAS 4 remains scheduled for an Ariane flight later this year.

PanAmsat has raised $262 million in a stock offering to finance the order of the PAS 5 and 6, which will serve the Atlantic Ocean region, particularly providing digital direct-to-home (DTH) services to Latin America, in 1996 and 1997 respectively.

With the PAS 1 and 2 satellites already in operation over the Atlantic and Pacific Ocean regions, PanAmSat will have met its global goal, established in 1984, when the PAS 4 is placed on station over the Indian Ocean. Using a transponder on the PAS 4, China Central Television will provide regional coverage and, linking with other PanAmSat satellites, will provide the world's first global Mandarin-language television service.

PanAmSat is the brainchild of Reno Anselmo, the founder of Spanish-language TV in the USA. In 1984, US President Ronald Reagan signed an Act allowing private satellite operators to compete with Intelsat for non-public telecommunications services.

A year later, Anselmo capitalised on the Reagan decision. Investing $85 million of personal funds, Anselmo formed Alpha Lyracom Space Communications, operating under the name Pan American Satellite, later known as PanAmSat. He purchased a spare former-GE Astro Space Series 3000 satellite for just $47 million, and a cut-price launch on the maiden Ariane 4 flight, with just $40 million insurance were the PAS 1 to have failed.

The 1,200kg PAS 1, the first privately owned international satellite, was launched into orbit in June 1988, to provide international services from its geostationary orbit perch at 45 degreesW. It is equipped with 12 C-band and six Ku-band transponders, and is operated with 1.4kW of electrical power.


Aggressive marketing

Despite Intelsat boycotts and regulatory barriers instigated through its US signatory, Comsat, PanAmSat used an aggressive marketing and lobbying effort to enable the company to generate a growing customer base and chip away at regulatory barriers.

When the PAS 1 was launched, PanAmSat was only authorised by Intelsat to provide a service between the USA and Peru. A customer base of more than 285 broadcasters and other communications users in over 85 countries has been built for the PAS 1, which is at full capacity. By 1997, there will be no prohibition on the traffic private satellite systems can carry.

The PanAmSat services fall primarily into two categories: broadcast services (programme distribution, like Cable News Network and Home Box Office), and satellite news gathering; and digital network services, to create customised communications networks for businesses and other users. DTH services were to have been introduced using the PAS 3.

Wide business penetration has been achieved by the innovation of beam-shaping and digital compression, which allow broadcasters to target specific geographic "hot spots" with high-power signals suitable for reception by dishes as small as 0.9m in diameter. Cross-strapping enables customers to uplink and downlink in Ku and C-bands, so that they can design hybrid, cost-effective networks.

The 2,920kg PAS 2, a Hughes HS-601 spacecraft, was launched into position over the Pacific at 191¡W in July 1994. This high-power, 4.2kW spacecraft is equipped with 16 C-band and 16 Ku-band transponders. What was to have been the PAS 3, with the same equipment as the PAS 2, would have complemented the PAS 1, stationed at 43 degreesW, while the PAS 4 - with an additional eight Ku-band transponders - will be stationed over the Indian Ocean at 68.5degreesE. The PAS 4 will be able to handle over 325 digital TV channels or over 54,000 simultaneous telephone calls.

Anselmo's goal will have been reached, although he required an additional $720 million funding for the PAS 2, 3 and 4. His coup was to persuade Hughes to begin construction of the PAS 2 before he had raised the funds. PanAmSat has so far signed $1.3 billion in agreements for PAS satellite services, and it does not have to look for business - the broadcasters come to PanAmSat.

The company made a $5.8 million loss in 1991. By 1993, it had a revenue of $50.8 million, with a net income of $16.9 million. Debts, however, are high, standing at $455 million in 1993. Customers pay about $1,300 for an hour of satellite use, compared, for example, with Comsat's $2,630. "We're a different beast from Intelsat," says Fred Landman, PaAmSat's president. "They are a government monopoly. We are an agile and visionary private carrier."


Satellite capacity

The big profit margins with the PAS 1 were a reflection of the shortfall of international satellite capacity. The market is getting more competitive with the introduction of the privately operated Orion satellite system over the Atlantic, and the leasing of NASA Tracking and Data Relay Satellite capacity over the Pacific by Columbia Communications, together with aggressive marketing and increased satellite capacity from Intelsat,.

Regional competition is even greater. Over 15 million home-based dishes in Europe are directed at Astra DTH-transmission satellites alone. PanAmSat, and other operators, have forged their success developing markets for the satellites. In the early days of communications from space, the market was directed by what the satellites could achieve. Now the market directs what the satellite provides. "Owning satellites is not a good business in itself," says Anselmo. "You have to develop services. If an airline wants to put in dishes for data and hook up travel agencies all over the world, the airline doesn't want to operate it. PanAmSat provides the service - we install the stations, take care of them, and provide the satellite transmission. That's where the money is."

Nowhere is a better illustration of this business philosophy than in the growing and deregulated Asia Pacific region, where PanAmSat competes, particularly with Asiasat, the impact of which in the region has been unprecedented.


Competition for PanAmSat

Asia Satellite Telecommunications (Asiasat)'s latest customer, Worldwide Television News (WTN), signed a lease of a C-band transponder on the Asiasat 2 spacecraft on 3 May. "WTN has waited for the satellite with the right footprint and right technology for full-time delivery of news to and from Asia," says Len Richardson, WTN's Asia vice-president.

The 3,500kg Asiasat 2 is a Lockheed Martin Series 7000 satellite which will be launched by a Chinese Long March 2E booster later this year. Its launch has been delayed by the demise of a Series 7000 satellite, the Telstar 402, in September 1994, and the loss of a Long March 2E in January 1995. It will be located at 100.5¡ E, and will be equipped with 24 C-band and nine Ku-band transponders. Advanced planning for the Asiasat 3 - with a launch scheduled for 1997 - and the Asiasat 4 is under way.

Asiasat of Hong Kong was established in 1989 by the trading conglomerate Hutchinson Whampoa, the UK's Cable & Wireless and China International Trust and Investment. Its first satellite, the 1,225kg Asiasat 1, located at 105.5¡E, was unusual and unique in that it was first launched in 1984.

A Hughes HS-376 spacecraft, called the Westar 6, was deployed from the Space Shuttle Challenger in February 1984 and, together with Indonesia's Palapa B2, was stranded in low-Earth orbit. They were retrieved by astronauts from the Shuttle Discovery in November 1984 and brought back to Earth.

For a total outlay of about $120 million, the Westar 6 was purchased by Asiasat, refurbished, equipped with 24 C-band transponders, and launched on the first commercial Chinese Long March 3 launch in April 1990. The Palapa B2 became the B2R, and was launched for Indonesia by a Delta, also in 1990.

Within days of the launch of the Asiasat 1, millions of dishes across Asia and the Middle East could receive Star TV's multi-channel entertainment. Previously the largely Pacific region was served only by Intelsat and limited regional operators in Japan, Indonesia and Australia.

Asiasat was "...the first to say there's a market here for Asia Pacific regional satellite services and it woke everybody up to the fact that there was something to be done", says Timothy Logue, a space and telecommunications analyst at Asia-Pacific consultancy Reid and Priest. The Asiasat 2's Ku-band capacity will enlarge the market area to include higher-power TV applications and network services.

Asiasat recently established a $225 million credit with a consortium of nine international banks to refinance Asiasat 1 and fund the Asiasat 2. "We are not a speculator in the market," says Sabrina Gubbon, Asiasat's marketing general manager, "we have a long-term commitment to the area".

Another Asia-Pacific regional-satellite operator in competition with Asiasat and PanAmSat is Hong Kong-based Asia Pacific Telecommunications satellite company, 75% owned by Chinese Government-backed companies, including China Telecommunications Broadcasting.

Its ApStar 1 satellite, a Hughes HS-376, 24 C-band satellite, launched on July 1994 by a Long March 3 and stationed at 131¡E, was to have been followed by the ApStar 2, a larger, more powerful, 26 C-band, eight Ku-band, HS-601 spacecraft. This was destroyed in a Long March 2 explosion during launch on 26 January.

The US Rimsat company also provides services to the Asia-Pacific region by leasing Russian Gorizont and Express and Express M communications satellites from Informcosmos. A total of two Gorizont and four Express satellites are planned. The Rimsats 1 and 2 (Gorizont 29 and 30) were launched in November 1993 and May 1994. Before this, Rimsat leased some Gorizont 17 transponders. The first of four Express satellites (but called the Rimsat 3) was launched in October 1994. Rimsat, however, is not on such a secure financial footing.


Source: Flight International