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."