Four operators bidding in Brazil’s orbital sale

Four satellite operators have placed sealed bids to take part in Brazil’s latest round of orbital slot sales next week. Companies controlled by Spain’s Hispasat, France’s Eutelsat, Canada’s Telesat and UAE-based Yahsat made 19 proposals for…

Four satellite operators have placed sealed bids to take part in Brazil’s latest round of orbital slot sales next week.

Companies controlled by Spain’s Hispasat, France’s Eutelsat, Canada’s Telesat and UAE-based Yahsat made 19 proposals for the four 15-year licences up for grabs, according to local regulator Anatel.

The bids will be opened on 26 May when Anatel will decide on the best ones.

Its sale comes only a year after the country last auctioned off orbital slots. Those were won by Luxembourg’s SES, Eutelsat, and Hispasat – which bids through Hispamar, a joint venture with Brazilian telco Oi.

Telesat and Yahsat also took part in that auction.

Despite losing out last time, Abu Dhabi-based Yahsat has announced that its third satellite will be a Brazil-focused HTS bird that will see it cover South America for the first time.

Al Yah-3, which is being built by US-based Orbital Sciences, is set to be launched in Q4 2016. It is reportedly targeting 20W, one of several locations that were still in the coordination stage when the satellite plans were announced in June.

Anatel has held six orbital slot sales since its inception in 1997.

Brazil’s capacity glut

Satellite operators have been flocking to Brazil in recent years as they look to Latin America as a source of emerging market growth. But this rush has prompted concerns about a potential oversupply of capacity.

According to Euroconsult, the rapid investment in expansion satellites in the region will see regular capacity supply in Latin America double between 2010 and 2017, while HTS capacity will increase eight-fold to over 370 Gbps by 2017.

However, the consultancy does not expect demand to keep pace with supply. It expects the average regular capacity fill rate to fall from 80% in 2014 to 70% in 2017. The decrease will be particularly evident in Ku-band, where utilisation levels are anticipated to fall from 86% in 2010 to 64% by 2017.

Many operators are pinning their hopes on the predicted growth of the direct-to-home market in Brazil. Pay-TV penetration in the country is still relatively low and Digital TV Research recently forecast that Brazil will become the second-largest market for satellite TV by 2020, generating around US$6.8bn.

Beyond DTH, universal access projects, 3G expansion in areas with poor terrestrial infrastructure – such as Amazonia and the West of Brazil – and enterprise VSAT supplying the growing energy sector are seen as key drivers of capacity demand.

Against this, though, are the macroeconomic woes that Brazil has been facing of late. The country’s gross domestic product is expected to contract slightly this year, the Brazilian real has slumped against the dollar and São Paulo, its most populous state and the industrial and economic powerhouse of the country, is suffering a multiyear drought.

With a population of just over 200 million and land mass greater than Australia, Brazil is a country of huge potential for the satellite industry, but it also faces many challenges and questions remain about whether demand will be able keep up with the rapid increase in supply.