The coronavirus pandemic has swept the globe in one of the worst human tragedies of recent times. It is something that has united us all as we embrace a new normal and trying to keep ourselves and our loved ones safe. As the timeline for a vaccine is uncertain, the status quo of social distancing may remain in effect for months moving forward. Major operators in the satellite industry face adapting to this new reality, and navigating the challenging year ahead.
Slowdown in Business
One of the big questions facing satellite companies is what kind of slowdown they might see in its business in the second half of the year. John Flaherty, vice president of Business Planning and Marketing at Telesat says a large percentage of Telesat’s business relies on remote collaboration with its customers, online video conferences, and electronic communications.
“Without knowing the longevity of the pandemic, it is too early to predict the impact on network build-outs for new services, which could result in later start dates for bringing capacity into use. Telesat does not have replacement or new satellites launching within the next 12 months, but we recognize a potential backlog of launches could impact our (Low-Earth Orbit) LEO launch plans for late 2021. With multiple launch arrangements in place for our LEO constellation, we believe we have the right resources and strategy in place to mitigate significant delays,” he says.
Flaherty admits that the space industry is just beginning to recognize impacts with industry event postponements, mandatory telework, and the suspension of launches at the Guiana Space Center in French Guiana. Further launch delays and supply chain issues can certainly emerge if the pandemic continues for several months, he believes.
AsiaSat CEO Roger Tong admits that at the moment selling transponder capacity is very difficult as the demand is being constricted by all the lockdown measures. With everything from content creation to equipment delivery being delayed, leasing capacity — the last step of the commercial process — is also being held up. He adds that satellite manufacturers and launch companies are also affected and have announced program delays, which will inevitably upset the launch plans of satellite operators, for both LEO and Geostationary (GEO) projects. “As for major CapEx, this is delayed as companies will have to review their business plans and recover from the drop in revenue or other losses from this outbreak,” he says.
Tong believes it is too early to say until the full impact of the coronavirus outbreak is understood, but he believes the outbreak will not only drive a massive change in consumer behaviour, but also that of multinational enterprises, logistic service providers, and governments. “The social, economic, and political shock waves [are] too great for us to make any hasty decisions. One thing is for certain — governments of the world should revisit the need for different means of broadcasting and telecommunications, and do not rob Peter to pay Paul,” he says.
American operator Viasat will have to be sensitive to supply chain issues, as well as problems downstream in its customers’ businesses and ecosystems, CEO Mark Dankberg says. “It’s too early to predict overall industry or revenue impacts. Like many companies across industries, we’re just trying to understand, evaluate, and model follow-on consequential global impacts,” Dankberg says. “Viasat remains fully committed to making progress on the ViaSat-3 program. The COVID-19 situation is extremely fluid, but we are working hard to understand potential risks and mitigate schedule impacts.”
A number of satellite players operate in developing areas where customers may be squeezed when paying bills for satellite bandwidth. Azercosmos, for example, expects a decline in its revenues due to the pandemic. Azercosmos CCO Mark Guthrie said that while the Azerbaijani operator has customers who will continue buying its services under any circumstances, markets in Africa and the Commonwealth of Independent States (CIS) of post-Soviet nations are vulnerable, and this vulnerability may result in revenue declines.
“It is too early to say how severe the impact will be,” Guthrie says. “This being said, we do not precisely know when this pandemic will end. For example, in Singapore, [which] dealt with the coronavirus at its very first stages, now goes through the second wave of this pandemic. So, we do not exactly know when this situation will end, and when the world will fully recover.”
Azercosmos had plans to recruit new personnel and build new office areas in the first quarter of 2020, but those plans have been postponed. The company has also been unable to fully implement its marketing and business plans since many trade shows where it was planning to participate have also been postponed.
Satellite Connectivity Aids Fight Against Virus
Paul Gaske, executive vice president and general manager for Hughes North America Division says in the midst of a global pandemic, people and businesses everywhere are seeing first-hand just how essential connectivity is to healthcare and the economy. He believes Hughes and the entire industry can help by connecting people around the world and providing the links to critical information – from precautions to help curb the spread of COVID-19, to access to telehealth resources, to dissemination of government regulations such as shelter-in-place orders.
Looking at the situation close to home in North America, Gaske says: “For millions of people in the Americas, HughesNet has become the lifeline that enables teleworking, and the home learning that many students now need to continue their education. Right now, our networks are also helping businesses stay in business – whether that means conducting business online instead of in-person, enabling customer support, managing finances and payroll, and using other cloud-based applications. Governments around the world are depending on their networks to manage the crisis – by sharing information with citizens and healthcare providers and providing vital services, supplies, and funding.”
Gaske believes what we have seen throughout this pandemic only reinforces the need for the technology and services that Hughes offers to customers around the world – today and into the future. “We are focused on serving our customers’ current needs while also planning for what’s next – such as multi-transport technologies, new JUPITER ground system technology and the launch of our JUPITER 3 (EchoStar XXIV) ultra-high density satellite.”
Dankberg agrees, saying for its residential customers, Viasat is working hard to actively manage its network, which is critically important during a time of much higher network usage and demand. “During this time, we have optimized our network to best serve as many customers as possible with the data and speeds each needs to be productive; we want to ensure that web traffic is responsive; that collaborative work applications and shared online workspaces are supported; and that we’re able to deliver quick response times for the most commonly used online teaching/education sites and business applications,” he says. “In fact, many of the people who use our network have few other options to be connected – and connectivity can literally represent a lifeline now.”
Guthrie from Azercosmos says the satellite industry today has a greater importance than ever before, and will contribute significantly to the fight against COVID-19 pandemic. “As we know self-isolation and social distancing are the measures that each of us must take during this period. There are processes in our life however, that require social interaction, for example doctor’s appointments and education. When COVID-19 forced us to isolate ourselves from others, we became creative and found ways to stay home and still carry out our necessary and day-to-day activities. Today, our children are studying online, and doctors are ‘seeing’ their patients by video calls. Systems are in place to identify, assess and test suspected individuals, with regards to symptoms of COVID-19,” he says.
Lessons from Prior Experience
Given its close proximity to China and operating in Hong Kong, Tong is uniquely placed to talk about the challenges that surround the pandemic given that the operator has experience in dealing with the SARS outbreak in 2003, and the social unrest in Hong Kong over the past year. He says this has equipped the company to deal with the operating arrangements to overcome the adverse conditions under the current coronavirus outbreak. “We have also developed, demonstrated and fully implemented our business continuity plan to ensure the company can continue its operation with minimum staff in case of a public health crisis. In addition, over the last two years, AsiaSat has employed local staff in different countries to get ourselves closer to our customers. This has demonstrated its value during this critical period when cross-border travel is restricted,” he says.
Tong also believes the current pandemic could lead to a reassessment of the importance of satellite going forward. He says, “In cases like this, it is more apparent that once a satellite link or service is in place, the number of staff required to keep the network running is minimal. If one looks at a satellite network, be it data or video, the services required are mainly on the hub side and at the customer premises. There is no ground-based inter-connection that can get affected by the lockdowns or maintenance requirements,” he says. “Therefore, during a pandemic, a natural disaster or other emergencies, one will appreciate the power of satellite. I hope the different administrations will reconsider their reallocation of satellite spectrum to terrestrial systems. A balance has to be maintained and a multiplicity of services to be offered to tackle the challenges that we all face. Just as you need to use the right tool for the job, different communications systems should be used where they have their natural advantage.”
Progress in the Year Ahead
Ambitions for 2020 have been reset. Satellite companies that generally perform strongly even in dire global circumstances are likely to scale back their goals. Tong admits a good year for AsiaSat would be to live through the year without having to lay off any staff and fulfill its corporate citizen’s duty at the same time.
Hughes’ Gaske says that the company is first and foremost concerned with the health and wellbeing of its employees, partners, and customers. “We hope that we can emerge from this pandemic knowing that we were able to help families, communities, and businesses by delivering the connectivity they need,” he says.
Viasat’s Dankberg says that no one can predict how long the current situation will last, or how long a rebound will take. “Our focus right now is to prepare for getting back to normal. We are working hard to anticipate and analyze a broad range of financial scenarios — and will have to balance short term challenges with long term opportunities. All of our businesses are attractive — and we have great opportunities on both the satellite broadband and defense communications markets,” he says.
Dankberg adds that Viasat will continue to work to improve its products and services, and expects to bring some products and services to market this year, while finding creative ways to maintain its competitive advantage.
Taking Care of the Team
All companies are focused on doing the best for their staff, both in terms of keeping them safe and keeping as many people employed as possible. For example, Guthrie says the Azercosmos technical team — who manage and operate telecommunication satellites Azerspace-1 and Azerspace-2, along with optical Earth Observation (EO) satellite Azersky — has split into two groups that work from the main satellite ground control station and Azercosmos’ Administrative Center for Satellite Backup and Emergency Operations in order to minimize physical contact. All centers and office rooms at Azercosmos are regularly disinfected, and the staff are provided with all the necessary safety equipment. Azercosmos has also provided all departments with licensed Zoom accounts to make unlimited calls to minimize the impact on the day-to-day business.
Telesat enacted its work from home policy globally in mid-March. As a provider of critical infrastructure to its customers, its business continuity plans are designed to support continued operation of its satellites, network, and teleport infrastructure. “With increased cautionary measures in place, critical operations staff still report to Telesat facilities, and in the event we need to close a facility, we have redundant operations locations and secure remote access to deliver our critical connectivity services. Our IT structure enables a fully remote workforce,” Flaherty says. VS