SES Americom maintains rare, positive business outlook

SES Americom’s content aggregation business continues to thrive in the face of an economic downturn, buoyed by demand for high-definition television and long-term relationships with programmers, chief financial officer Robert Kisilywicz told attendees at UBS’s annual global media and communications conference held this week in New York City.

The wholesale distributor, which announced at TelcoTV that it had signed up 65 total telcos in 31 states to its IP Prime platform, will launch 13 new satellite programs in the next three years, adding more than 28% growth in its transponder business. Kisilywicz said it has no liquidity concerns and will remain fully funded through 2010. Also helping the financial outlook is the fact that SES customers typically sign 10- to 15-year non-cancelable contracts, giving the company long-term visibility.

“When a customer makes a buying decision, it’s typically a long-term relationship,” Kisilywicz said. “As that platform grows, as they add subscribers and, in turn, more channels, customers want to sign on with operators who have the capacity to grow with them…They don’t want to be turned away when they reach growth capacity or be told to repoint their network. That puts SES in quite a good position as some of our competitors are withdrawing their fleets in the market.”

IP Prime differentiates itself from its competitors with a specific focus on HD. It provides its mostly telco customer base with either a complete IPTV programming package of more than 200 standard definition and 50 HD channels or an exclusive HD overlay to existing IPTV operations. One third of its customer base has already adopted the HD-4 platform to add HD channels in MPEG-4 to their existing operations. Kisilywicz anticipates the steady, progressive expansion of HD to be the biggest growth driver going forward as more consumers watch TV, perhaps even increasing their viewing as the economy worsens.

“For our business outlook standpoint, the supply and demand balance is tilted quite favorably in favor of [fixed satellite service] operators,” Kisilywicz said. “Operators’ demand outpaces supply in all major regions fueled by growth in high definition for video broadcasting, fueled by new [direct-to-home] platforms in emerging regions and demand for government services, particularly in the US and with the new administration .”