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INSIGHT - What Makes A Top Teleport Operator?
by Robert Bell
Executive Director, World Teleport Association

When thinking about the satellite communications industry, most people will immediately look upwards where hundreds of satellites are orbiting the Earth transmitting the voice, video, and data communications we all rely heavily upon — however, the real value lies much closer to home. The $13 billion teleport sector produces more than 15 percent of the world satellite communications revenue. Teleport operators are no longer simply providers of basic uplinking and downlinking services.

Today’s teleport operators have evolved into providers of complex solutions ranging from TV program production and post-production to content hosting and distribution, systems integration to network management. While monopolistic national carriers continue to operate in many regions, the competitive commercial players in this sector include independent “uplinkers,” global hybrid carriers, and specialized service providers for whom satellites are a means to the end of providing a high-value service to their customers.

Strong Growth
Every year the World Teleport Association (WTA) issues the Top Teleport rankings. Surveying teleport operators around the world regarding their revenues, revenue growth, facilities, services, and business results develops this ranking. Based on this information, WTA publishes rankings of the Global Top 20 (companies by revenue including independents, carriers, and technology companies, the Independent Top 20 (companies by revenue excluding satellite and fiber carriers), and the Fast 20 (based on year-over-year revenue growth, including independents, carriers, and technology companies).

All of the companies comprising the 2007 Top Teleport Operators experienced strong growth over the prior year. The 2007 Global Top 20 had $9.5 billion in annual revenues, up 11 percent from the total revenues of the 2006 Global Top 20. The Independent Top 20 had a higher growth rate at 15 percent, with total 2007 revenues of $2.2 billion. The Fast 20 grew an average of 35 percent to $7.5 billion in 2007 revenues.

While membership in the Top Operators rankings changes from year to year, more than 30 companies have submitted data consistently for the past three years. These companies show the same pattern of strong top-line growth with $5.4 billion in revenue, up 39 percent from the total two years before. That’s an average 20 percent annual growth rate, including small, mid-size and large companies.

Show Me the Money
According to the survey, the average teleport operator earns revenues in several categories: “Teleport and value-added services” which includes traditional transmission services including up/downlinking, modulation/demodulation, encryption, standards conversation, switching, and routing; “Satellite” which is the resale of transponder capacity; and “Fiber and Microwave” which covers sale or resale of terrestrial capacity.

In terms of transmission, there has been a noticeable shift in 2007 with teleport operators earning slightly more of their revenue from the resale of transponders and slightly less from fiber/microwave capacity sales. Yet looking forward three years, operators expect that the percentage of their revenues from transmission will decline while non-transmission services will jump by 33 percent from today’s levels.

Where’s the Money Coming From?
Since 2006, there has been a shift in the mix of services teleport operators are offering. A higher percentage of operators reported offering transponder sales, systems integration, and systems design, portable/flyaway uplinking, network management, voice services, site commissioning, and post-production and production services than in 2006 — fewer offered terrestrial connectivity, enterprise data services, SNG, or non-broadcast content distribution. While fewer operators seem to offer enterprise data services, those that do have seen strong growth. Forty percent of respondents in 2007 reported generating at least half of their revenue from enterprise networking compared to 20 percent the year before. That’s a surprising shift for an industry that once was driven almost exclusively by broadcast-quality video.

Will the Growth Trend Continue?
The 2007 Top Operators are an optimistic bunch. Asked which markets they expected to grow most strongly, Africa was put at the top of the list, followed by Europe, Latin America, North America, and the Caribbean. About half of the Top Operators expected growth even in the weakest West Asian market.

The nominations for the 2008 Top Teleport Operator rankings closed in mid-October and the ranking will appear in November. However, the financial crisis that has rocked Wall Street and brought the global financial markets to their knees over the last couple of months will most likely have a significant impact on the 2009 results. While we won’t know what the effect will be on the teleport sector for some time, it’s safe to assume that the industry will be keeping a close eye on their business plans.

The Inside the Top Teleport Operators of 2007 report, as well as a host of other research reports, can be found on the World Teleport Association website. The reports are free to WTA members and available to non-members via the online store.

About the author
Robert Bell is Executive Director of World Teleport Association (www.worldlteleport.org). WTA is headquartered in New York City and has members – teleport operators, satellite carriers, fiber carriers, and technology suppliers – in over 20 nations. Robert welcomes your comments at rbell@worldteleport.org.

About WTA
Since 1985, the World Teleport Association (WTA) has been the only trade association focusing on the business of satellite communications from the ground up. At the core of the WTA’s membership are the world’s most innovative operators of teleports, from independents to multinationals, niche service providers to global hybrid carriers. They provide a broad and expanding range of value-added services, from origination of TV and radio channels to the integration and management of complex networks, and from IP-based content distribution to mobile telephony backhaul.

For Teleport Operators
WTA is dedicated to helping the operators of teleports to improve their operations, develop their markets, and grow their businesses within the $13 billion teleport sector of the global satellite industry. WTA helps members understand how big market changes will affect them, and offers information and advice on best practices in teleport operations and technology.

Market Development
Through ongoing public relations campaigns, annual Awards program, participation in events and market research, WTA works to build recognition for the teleport sector among satellite communications customers in media, enterprise and government.

Building Businesses
WTA provides its members with access to business opportunities around the world, with companies featured in the SATCON Marketplace, the searchable online directory of providers with detailed information on products, services, and connectivity. Alerts are sent to them by email regarding sales opportunities in the media, enterprise, and government markets. The WTA guides companies to potential customers and strategic allies within our membership and open the door for them with personal introductions.

For Companies That Do Business With Teleports
New channels to the industry are opened. Non-teleport members include:
  • Satellite and hybrid network operators
  • Providers and integrators of satelite
  • communications technology
  • Producers of system, network and content management software
  • Consultants on technology, business and marketing
  • Business support services for the industry
  • For more information regarding the World Teleport Association, from membership options to the services offered, select the organization’s web page graphic below.