Expert View

October 7, 2002
The Indian market will grow at a much faster pace than any other market in the world

I am excited about the Indian prospects" says the CEO Dan Goldberg of New Skies after the agreement he has entered into with Internet major Data Access for facilitating its international long distance carriage on his satellites. Goldberg was speaking to Convergence Plus after jointly addressing a press conference in New Delhi with Siddhartha Ray, Managing Director of Data Access on their new relationship. Goldberg also touched on how he will deal with excess transponder capacity if it develops and explained the versatile and flexible nature of the facilities on the New Skies satellite.

New Skies was spun off from INTELSAT six years ago and had developed a momentum of its own as the satellite service provider for many operators in voice, data and video and also TV. Goldberg expects to capture 25 per cent of its business from India. The Hague based company has five satellites in geosynchronous orbit and ground facilities around the world. Two more are under construction and has rights to four more orbital positions.

CP: What makes you so optimistic about the Indian market?

Dan Goldberg: Experience! We have been here for over two years now. India has been one of our strongest growing markets over the past two years. We are encouraged by our past successes here. We know the customers in this market very well and their plans. Their businesses are growing at a healthy rate. They continue to need our services in order to grow their businesses. So, it's really factors such as being close to our customers, our good track record here over the past two years, increasing deregulation and strong macro-economic conditions here that are going to continue to see the Indian market grow at a much faster pace than any other market in the world.

CP: What do you actually expect from this agreement with Data Access?

Dan Goldberg: One, it is going to make a significant contribution to our revenues in 2003. Two, it is going to make India a still more important part of the world force because already, we have about 15 percent of our new business revenues direct from India. We think, by the end of next year or mid 2004, that is going to grow closer to 25 percent - which is a huge number for a company that has business around the world. And, for the first time, we will be offering voice services in and out of India. We would like to see a nice mix of our revenue profile and this will allow us to diversify the revenue profile still more.

CP: Would you be looking for customers within voice and general sectors, apart from Data Access?

Dan Goldberg: The deal with Data Access is non-exclusive. They are an important partner of ours. However, there are three other ILD licensees. We are talking to all of them. We would like to see some business close with the rest of them. For customers outside of the ILD space, we have already been doing businesses with significant number of customers here including Satyam, Siti Cable, Sun Television, etc. We would like to see our business grow with those customers and capture some new customers as well.

CP: Are you also looking for direct telephone connections, example, satellite telephones?

Dan Goldberg: Again, Our business very much tracks what our customers are doing. If companies like Data Access are interested in rolling out services like that or satellite, particularly, the NSS-6 satellite, it is perfectly well suited to provide those kinds of services. However, we will leave it up to the people here on the ground to determine whether they want to offer their services.

CP: In view of what has happened to several other satellite companies, do you expect any business challenges because of changes in technology?

Dan Goldberg: Probably, the satellite companies that have been most impacted in a negative way are those that provide very different kinds of services. There are Iridium and Globalstar were very much focused on the mobile telephony market. That is not our market. Although there are changes in technology, sometimes it improves our business and sometimes it creates risk to our business. But I don't see anything on the horizon that is a real material threat to the business.

CP: Not even surplus capacity in satellites?

Dan Goldberg: Surplus capacity in satellites is something we have been contending with now for over two years now. It is something we have been contending with in some other parts of the world for even longer than two years. There has been some price compression in the market as a result of overcapacity.

We will continue to see overcapacity, probably for the next year, certainly for the rest of 2002 and probably 2003. Thereafter, a lot is going to depend on just what the global economy does. Thereafter, I think we will be in a pretty good shape. All operators have recognized that we are in a situation marked by overcapacity. Everyone is dealing with it fairly responsibly by deferring additional satellite launches.

CP: Perhaps, your quality of satellite services is one of the reasons why you are so confident.

Dan Goldberg: Yes, we certainly emphasize the high quality of our satellite services. That has given customers like Data Access additional reason to do business with us. We also try to design our satellites like the NSS-6 very flexibly. If a particular region takes off, we can allocate additional capacity to that region. If a certain region cools down, we can allocate capacity away from that region. We try to mitigate the risk by doing that too.