Bright future at PanAmSat

$756 mil in revs predicted to double by 2000

MIAMI — Ten years to the day after launching the world’s first private satellite, PanAmSat is seeing revenue growth skyrocket and its flock of hi-tech birds multiplying at a quicker rate than ever.

The Greenwich, Conn.-based company, which launched the first privately-owned bird on June 15, 1988, and merged with Hughes’ satellite division in May 1997, recorded revenues of $756 million last year.

PanAmSat sales will double to $1.54 billion by the year 2000, predicted Rob Kaimowitz of investment bank C.E. Unterberg, Tobin.

“The outlook of the company is fantastic. It has a backlog of $7 billion in firm contracts,” Kaimowitz added.

Company plans call for another eight satellite launches by end-1999 — bringing the fleet to 24 — at a total cost of around $2 billion, prez Fred Landman told Daily Variety.

Much of the growth is due to an expanding demand overseas, notably in Latin America where PanAmSat has served longest and where it has allowed a regional pay-TV market to blossom in the last nine years.

“When we launched Pas-1, Intelsat was the global monopoly, PanAmSat had no customers and no revenue, and the pundits scoffed at the prospect of private-sector service providers,” said Landman.

Today, state-supported international consortium Intelsat, which has traditionally focused on telephony and data services, remains a large concern. But PanAmSat, which has been quicker to offer video services, has eclipsed it in terms of competitiveness, analysts say.

“The next big sector will be Internet connectivity, and PanAmSat has taken a pioneering role in that, setting up agreements with developing countries for high-speed connection to Internet access points,” said Antonette Goroch, an analyst with the Carmel Group.

“Intelsat only recently woke up to that market — it’s larger, slower and more lethargic, while PanAmSat is more agile and a very strong competitor now that Hughes is behind it,” Goroch added.

Of PanAmSat’s forthcoming birds, three will serve Latin America and two will serve Asia, where the company has helped drive the growth of the pay-TV industry since 1995.

But PanAmSat is also riding the telecom growth curve in the U.S., which Hughes’ Galaxy subsid began to serve in 1983 by providing the first all-cable TV bird.

The August launch of Galaxy-X will give the company its fifth platform for U.S. cablers, enabling programmers to further regionalize signals to attract local ad dollars, said PanAmSat exec VP Luli Saralegui.

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