Loral eyes Asian satellite mart

Loral eyes Asian satellite mart

SINGAPORE (Reuter): Asia-Pacific telecommunications demand is growing so fast the region will soon dominate the world's satellite market, American satellite-maker and operator Loral Space & Communications said yesterday.

Hank Stackpole, president of the company's Asia-Pacific arm, Loral Asia Pacific, said the region would have up to 90 satellites in orbit by 2006, worth around US$10.5 billion.

He quoted industry estimates suggesting that over the next decade the region was likely to order up to 70 new satellites, well above the 45-50 orders expected for North America.

"We would hope that we would have won contracts to build a third of them," he said in an interview.

"In terms of telecommunications and broadcasting, Asia is the growth area of the world and the foundation of development in those areas well into the next century," he said.

Loral -- the independent space arm of the former Loral Corp which was mostly sold to Lockheed Martin Corp last year -- is one of the world's biggest satellite-makers with an annual turnover of around US$1.4 billion.

Most of its income has come from manufacturing, but it has invested heavily in a system of low-orbiting satellites called Globalstar, due to come into service in 1998 supporting a global network of digital mobile telephones.

Loral spokesman David Benton said the company's heavy investment in Globalstar and other subsidiaries was partly responsible for its $10.3 million net loss in the three months to June 30.

But he said income from operating satellites through its subsidiaries would eventually generate large profits, far more than from making satellites.

"By 10 years time, the revenue from operating satellites should be three times as much as from manufacturing them," Benton said.

Stackpole agreed, saying the Globalstar system, which is 38 percent-owned by Loral but run by local firms in 106 countries around the world, would be highly lucrative once operational.

"Globalstar will really be a cash cow once it's operational," he said. "It will have a very quick uptake and should be up and running by late 1998."

Much of the revenue from the unit, and from the sale of satellites, would be from the Asia-Pacific region.

"I would say that by 2000, 65 percent to 70 percent of Loral Space and Communications' income outside the United States will be coming from the Asia Pacific," he said.

He declined to give a profit forecast but said Asia-Pacific revenues would continue to escalate.

"We would be looking to be a billion-dollar company in Asia by early next century in partnership with the other operators," he said.

"Hundreds of thousands of villages in China don't have a single telephone and there are archipelagos in Indonesia and the Philippines with hardly any communications. The satellite can bridge those gaps," he said.

"Telecoms is no longer a 'nice to have'. It has become an essential of life."