A Russian rocket on Thursday launched the largest satellite to serve Latin America into orbit, and the satellite's operator forecast that the booming communications business between Spain and the region would double its revenue by 2008.
Revenue of Hispasat, part-owned by French satellite group Eutelsat and the Spanish telecom giant Telefonica, will double to around $241.2 million by 2008 thanks to the Amazonas satellite, Hispasat Chief Executive Jacinto Garcia told Reuters in an interview.
Garcia said the satellite would also boost its joint bid with Eutelsat for the European Union's multibillion-dollar Galileo satellite navigation scheme, expected to be the continent's most lucrative infrastructure project.
"Ibero-America is a key market for Hispasat, with some 400 million people," said Garcia. "It is a fast-growing market with demand for a wide range of services."
"Amazonas should double Hispasat's revenues by 2008," he said. "Profits will grow significantly starting from 2006."
TV, telephone and Internet
Hispasat has two other satellites already in the air, but both are operating practically at full capacity.
The new 4.5-ton satellite was launched atop a Proton rocket from Russia's Baikonur Cosmodrome in Kazakhstan, and boosted into orbit by a Russian Breeze-M upper stage. The satellite will reach its final orbit within two weeks.
It will be able to provide television, radio, broadband Internet and corporate communication services to the whole of the Americas, Western Europe and North Africa. However, Hispasat expects roughly half of its business to come from Brazil.
"If we see that this satellite is successful, then in three years or so we will consider launching a new Amazonas," Garcia said.
Big investment
Roughly 30 percent of the satellite's capacity will be dedicated to traditional telecom services, with a further 20 percent likely to go to broadband Internet business.
The remainder will be spread between a variety of services, but Garcia forecast that providing corporate communication networks for Spanish companies with large Latin American operations — like Telefonica or Union Fenosa — would become an important activity.
Hispasat is 13.2 percent owned by the Spanish-speaking world's largest telecom service provider, Telefonica, which has made Brazil, with a population of about 175 million people, one of its top priorities.
Investment in the satellite, which has an expected life of 15 years, was $367.5 million. Garcia said the investment had been fully financed and no capital increase had been necessary.
Paris-based Eutelsat — the world's fourth-largest satellite operator with its own network of around 24 satellites — owns the largest stake in Hispasat, 27.7 percent.
Looking forward to Galileo
Eutelsat and Hispasat are presenting a bid for the operating contract for the Galileo project, which is expected to generate $10.8 billion a year in service and equipment contracts. The project is due to come on line in 2008 and rival the U.S. Global Positioning System.
"We are optimistic that our candidature will make the short list in September or October," Garcia said. "Between Eutelsat and Hispasat we have global coverage and that is a key advantage we are putting on the table."
Spain's second-largest telecoms group, Auna, owns 17.6 percent of Hispasat and the BBVA banking concern owns 11.8 percent. Spanish state holding company Sepi holds 7.4 percent, and the Spanish division of the European aerospace company EADS owns 5 percent.
