Intelsat floats three independent outfits

By Our Special Correspondent

CHENNAI, JULY 19. The privatised $1.1 billion satellite communication company Intelsat has floated three independent outfits to take care of assets, upkeep and sales.

Intelsat Holdings LLC will be based in Washington and own the assets - the 19 satellites. Intelsat Global Services will also be based in Washington. This will primarily take care of the upkeep of satellites and provide requisite support service. Intelsat Global Sales and Marketing Company will be headquartered in London and concern itself with selling satellite capacity.

Intelsat has regional support centres in India, South Africa, Singapore and London. It has points of presence - through field offices - in Norway, Germany, Australia and Hong Kong. All these will now report to the London-based Intelsat Sales and Marketing Company.

The floatation of these three companies follows a final nod from the board of governors for privatisation of Intelsat. Henceforth, it will be a board-managed company. The board will comprise 17 directors. Besides the CEO, it will have eight independent directors. A similar number will be elected by the shareholders. Intelsat, it may be recalled, was formed under a treaty in 1964 between 144 member-Governments, and managed by board of governors.

The Videsh Sanchar Nigam has a holding of 5.5 per cent in the company. With the privatisation, the 200-odd owners of Intelsat have now become their shareholders.

According to Mr. Raju T. Pulugurtha, Managing Director (South Asia Asia-Pacific) of Intelsat, the privatisation will give the company `flexibility' vis-a-vis pricing, satellite capacity sale and provision of new value added services. He said Intelsat - by the very nature of its existence - had to function under lots of constraint. It restricted itself to selling satellite capacity. Further, it was also forced to sell capacity at a uniform price to member-customers. All these would now change. Intelsat would move towards market-related pricing.

Interestingly enough, Intelsat - functioned largely out of Washington DC - will now operate from Bermuda.

The managing director indicated that of the nine new satellites proposed to be launched by Intelsat at an investment of close to $3 billion, at least four would be positioned to serve the needs of Asia Pacific region. Of the total revenue, nearly $48 million came from Indian traffic. Around 40 per cent of this comprised revenue from voice traffic, 25 per cent video, another 25 per cent from Internet and the rest from corporate network. The revenue from Indian traffic would grow to $56 million this year.

Asked as to why the Indian operations of Intelsat were moved from Mumbai to Chennai, he said the presence of many broadcast companies in the South and cost consideration had forced Intelsat to shift operations. Further, VSNL had also an uplinking station here.

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