The London Satellite Exchange has celebrated one year of trading with CEO Frank Genin reporting over $37 million in brokered sales. In an exclusive Q & A session with SpaceDaily’s publisher Simon Mansfield, Frank outlined the company’s successes to date and plans for the future.
Q: You have completed your first year of operations. How did you fare in these troubling times?
A: We have brokered deals totaling 953 MHz of satellite capacity and services during our first year of trading. The total volume of deals brokered was in excess of US$37m.
We have received more than 700 requests for satellite capacity and services during the year, and have built membership to 4,000. Our online marketplace offers for more than 5GHz of satellite capacity, posted by more than sixty important satellite industry players.
You mention “these troubling times”. The downturn in the general economy, the high tech sector stock market crash and its consequences have obliged us to react toughly and transform ourselves into aggressive brokers. We have turned ourselves into hard fighters on prices and conditions for the sake of all.
Q: Have the recent privatizations represented a shock to the market? You have your finger on the pulse of the market – what is really going on?
A: In each of the major players – Eutelsat and Intelsat – you have at present 5 dominant major shareholders. Naturally, 205 national operators for Intelsat, and 41 national operators for Eutelsat, are not left out in the cold.
They have some protective clauses, but in the reality of tough business conditions especially in current tense world conditions, they are left on their own to manage their capacity for the future. Consequently many of them are trying to resell their “old” capacity on the grey market – that is one of our main fields of action, and the price indices are suffering due to this volume of sudden offers.
Our world KU band index, for instance, has fallen from USD 5,010 per MHz/month to USD 4,500 per MHz/month recently, because of these new market dynamics. We expect prices to stay there for a while now, if the world macro economic conditions do not worsen further.
Q: Talking about macro and micro economics, what was your management response to this situation?
A: We cut costs very early, by 30% already in Q1, and now we have ended with 40 % reductions. We have slimmed the team from 12 to 8 and kept the best performers. The present team is the most efficient and organized team that we have ever had.
We are very positive about the present internal atmosphere. All are motivated towards the same goal: fast and excellent service for our buyers, protection of the interests of our suppliers family, and consequently success for our brokers team.
A: Question : We heard that one competitor is starting his operations this year. What is your feeling about this newcomer?
Satcap of The Netherlands has started 8 months later than us. In today’s accelerated times that is worth 10 years! We are very satisfied to have gathered experience and clout as the first entrant to the satellite brokerage field.
We more than welcome competition as liberal minded persons, and we respect our Dutch friends.
Up to now we never met them on any competing bid! Wake up gentlemen! – we are ready to fence, we are only a click away !!
Q: What about the future. Any bright ideas?
A: Today we are very disappointed by our fiber terrestrial colleagues. We believe that the future of global trade in bandwidth is in hybrid solutions. Transnational backbones are the perfect fit for satellite and fiber.
We have cooperated with all the major players but they don’t have a global presence and they still don’t get it ! This will change, without doubt.
We have two projects on the backburner, one is a very sensitive geopolitically, and will involve all 51 satellite operators, – but its too early to talk about that now!
The other will be a surprise, but you will know about it very soon; it concerns satellite-related applications that only two companies in the world have envisaged. You will be the first to have the scoop.
