Archive for February, 2007

Satellite Broadband Gets to Europe

Wednesday, February 21st, 2007

Looking to go check out the Northern Lights in Europe, but afraid the lack of a solid connection to the net will prevent you from convincing the boss you can work in the Arctic Circle? Well, have no fear, according to CNET UK, it looks like even the farthest reaches of Europe will be wired just in time for a summer roll-out in June and in place in time for next year’s show.

The expansion will, employing Eutelsat’s birds, use ViaSat’s Surfbeam system (the same one SES-Americom started using with enterprise customers a couple of years ago) to bring two-way broadband Internet connections to EU citizens in Germany, Switzerland, Spain & Portugal who live in areas that don’t generally have access to wire and wireless-based broadband.  The hub will be run by Skylogic from the SkyPark teleport in Turin, Italy, home of the 2006 Winter Olympics. The full story can be found in a surprisingly informative press release on ViaSat’s site.

The even better news for those in Europe looking to connect via satellite is that you may not have to pay an arm-and-a-leg or necessarily suffer with dial-up technology for uploads. Wildblue, the company utilizing the two-way satellite broadband technology in the states, has been around for around two years and seems to be charging rates that are comparable to wired-broadband rates in some of the country’s more expensive markets (between $50-80/month) with upload speeds starting at 128Kbps. While equipment fees might eat away at some of the initial savings, the possibility of being able to do your work and watch nature’s greatest light show at the top of the world? Well, that’s priceless.

Ed’s “What’s Next?” Speech

Tuesday, February 20th, 2007

SES AMERICOM CEO Ed Horowitz was the guest speaker at the Washington Space Business Roundtable’s Flagship Lunch and Silent Auction on Tuesday, 20 February 2007.

We don’t have a podcast or video available, so here’s the text of the speech:

“What’s Next?”

I appreciate this chance to speak with you today in this beautiful new facility. Not long ago, as many of you remember, this spot was part of a run down community — which has obviously been brought back to life.

It’s changed.

And — in the midst of the good change around us, I feel it is appropriate to ask, “What’s Next” for our  business and for us?

Where will we be in 20 years?

Will we be in 20 years?

I subscribe to Stanford’s “Growth Theory” economist Paul Romer’s view that growth occurs whenever people take resources and rearrange them in ways that are more valuable”.

To know what is “more valuable” is a matter of vision.

At the Twenty-second Communist Party Congress in 1961, Soviet Premier Nikita
Khrushchev’s vision was that within 20 years the Soviet Union would out-produce the United States in all the traditional sectors of industrial might — coal, steel, cement, fertilizer and so on.

In 1981, that vision was indeed fulfilled: that year the Soviet Union outdid America in every one of those industries.

They successfully reproduced a late 19th, century manufacturing based industrial economy…while the US was inventing a 21st Century chip, computer and information based economy.

A new world happened, shaped by a furious and unplanned burst of technological, cultural and economic force. 

The Soviet vision of the future was as over-confident, but more importantly it was simply — over.

Nikita Khrushchev saw the future through the wrong end of a telescope where the moment seemed larger than it was — and the horizon smaller. He believed he could outwit history with a good plan built on dedicated incrementalism which had one gear — sideways.

As we meet today and at other conferences persistently speaking —to each other —my fear is that we might be inclined to use Nikita’s telescope to envision what’s next for us.

The satellite industry, including SES, has dictated broad global changes in other businesses from entertainment to defense; from detection and GPS to secure communication.

Today, the satellite business is producing reliable earnings for our shareholders. But undeniably, there are changes on the horizon dictated, if nothing else, by the changing worlds of our customers…. And they expect us to “get it”. They expect us to anticipate needs.

What the future holds is an exciting mystery. But, we are better off addressing possibilities while we have a chance to invest in them; to own them —-rather than to ignore or possibly be displaced by them. That’s what we will talk about today.

What we know is that the future will be vastly different.

It is estimated that within the next 25 years, science and technology will advance by a factor of 4 – 7x beyond the advancements over the last 25 years.

While we may hear this in stride — it is absolutely stunning in its business and social implications.

It means that where we stand today on the technology and science scale versus where we will be in the next 25 years — is a moment equivalent to being in the year 1650.

Think about it …1650!

Of course the 25 years from 1650 – 1675 saw their own dramatic developments. The English started drinking tea. Cromwell dissolved Parliament, and the first bank note was issued in Sweden.

During this time the world population expanded to 500 million, which is about one-third the size of India today.

Isaac Newton began experiments with gravity and Cheddar Cheese was invented.

The great Plague of London commenced and the English settled in Charlestown, Virginia.

Ice cream was invented and La Grand Vetel, a famous French chef killed himself because Louis the 14th didn’t like the dinner La Grand had prepared.

You could say a lot happened in those 25 Years…But, the world had seen nothing yet.

1650 was 225 years before the phone was invented and…a century and a half before the ratification of the US Constitution.

It was 200 years before Edison was born.  It was 200 years before the US population would reach 23 million and China’s population then — was almost the same number as China Mobile’s cellular customers today (about 350 million).

1650 was 307 years before Sputnik and 315 years before the first satellite.

We are all familiar with the advances made in the satellite industry through compression. Well, get ready for the advances in history made by an unprecedented compression of knowledge in the next 25 years.

We’re about to enter “The Great Compression”.

We are looking at the equivalent change of the last 315 years — about to be compressed into the next 25 years.

What does this mean?

It means — for example — that if you are in the transportation business — the worst four words you could imagine for your business — may actually be heard in the next 25 years…The four words? — “Beam me up Scotty”.

The odds that the massive changes coming in the “Great Compression” will leave the satellite industry untouched — are zero. Change will come to us whatever we choose to do or not to do.

What will we be doing when it comes?

While technology is a “business”, it is also a force not to be controlled even by the best of intentions.

The genie is out of the bottle and the question is whether the genie is working for us or are we working for the genie?

Let’s spend a little time today on some broad issues of concern to our industry and to our customers:

1. U.S. Government business…

2. The commercial and media business…

3. The ramifications of change in both worlds and lastly …

4. I want to discuss a looming talent deficit as we face the  coming “Great Compression”.

The US government business is, as you all know, changing rapidly. Saddam Hussein invaded Kuwait in August, 1990 and the US and Coalition forces liberated it in January of 1991.

During the 5 ½ months between Hussein’s invasion and ours, the American military was caught without the satellite capacity to track and mount the offensive.

They scrambled to acquire the needed transponders and didn’t have time for emergency appropriations to acquire them, so the costs were guaranteed —- by Private Citizen Ted Turner.

It was no coincidence that Turner’s CNN had the best and for a time the only video from Desert Storm.

The US military will never be caught like that again. Six months after our troops landed, DISA was created to make sure it wouldn’t happen again.

In the intervening years between Desert Storm and 9/11, the US military changed. 

When 9/11 came, the military was ready with a system in place to fund $78 million dollars worth of contracts to provide the satellite and communications services needed. The contracts were in large part for bundled solutions in addition to the broadband commodity.

We learned then that in the future we need to leverage what only satellites can provide — advanced mobile communications and high speed internet access — while on the move —-anywhere in the world — via aircraft, boat, humvee or on foot.

What the military needs is megabytes, not megahertz. The military expects a ground and mobile capacity consistently capable of facial recognition.

Increasingly, the US government wants net-centric bundled solutions as well as broadband and they are calling upon us to be creative about it.

There is a demand for specific megabyte capacity per war fighter and we also know that this demand will only grow over time.

Increasing our military business means persistently increasing capacity and solutions.

For example, there is an ever expanding need for video teleconference capability (VTC) — for commanders in the field, in Washington, and for soldiers on the ground.

The invasion of Iraq was witnessed live on multiple screens in the White House Situation Room. Decisions could be made in real time with real data. Before that it was almost like Abraham Lincoln waiting for a telegram telling him that Grant had taken Richmond.

Soldiers on the ground also have growing “human terrain” needs in addition to VTC — also things like  IM and secure chat capability.

Remember, in five years … 50% of the military will be Gen X and Y. They grew up in a digital world. The military has to grow with them – and so do we.

Whenever we speak of high speed mobile communications we must, in the same breath, speak of advanced development of “in-orbit” flexibility and new antennae development.

Satellites must increasingly have capabilities for re-direction and re-programming in space.

We must advance efforts to change frequencies and footprints in orbit.

We look over our shoulders for our competitors and can’t see some of them because they’re in front of us. They may not even be in our business.

For example, let’s look for a moment at the world of Nano-technology, once viewed as science fiction, but today may represent the “key enabling technology” of the 21st century.

Nano- technology is the “purposeful creation, manipulation and use of matter, physical structures and engineered devices with previously unimaginable dimensions”.

Nano-technology is starting to impact chemistry, biology, applied physics and medicine. The inevitable applications to the space and satellite world are just beginning to be imagined.

But, one way to think of it, knowing that a nanometer is one billionth of a meter, is to see every person as a nano-unit in a world with six billion people. That is the level of services and connection we must contemplate.

What are some of the ramifications of these great changes for our customers and for our business?

One ramification could be friction with our current customers and we have to think about that.

Many of our major customers are in the commercial media world — where things are also changing at a furious pace.

You Tube, MP3, file sharing and a host of  other technological and social changes are threatening old business models like “Beam me up Scotty” would threaten transportation.

Our media customers are losing control of their customers who are increasingly less dependent on mass packaged media which we reliably deliver.

User generated and niche media (nano media) are replacing mass media.

Remember the 1998 Jim Carrey movie, “The Truman Show” where an unsuspecting insurance salesman’s life was made into a 24/7 movie for the entertainment of the town’s people?

Everyone in his fabricated town, his mother included, made a fool of him everyday — in their controlled entertainment world.

It was all run out of a network studio from which Truman eventually escaped– heartbroken.

Now think of The Truman Show in reverse where the insurance salesman watches everyone and anyone all day and all night, as he chooses.

Imagine control gone from the entertainment business into the hands of Truman… and the walls of the entertainment and media world come tumbling down.

That’s where we’re headed — along with our customers. User generated content and demand is going to turn the media world upside down.

Control will shift and it will be a new challenge to make an honest buck for the old institutions.

What is the response of the media and entertainment business to this creative destruction threat?

A recent book called “Wikinomics” – gives one example of how the media world is responding in the field of music… and I quote:

“Rather than embracing MP3 and adopting new business models, the industry has adopted a defensive posture. Obsession with control, piracy, and proprietary standards on the part of large industry players has only served to further alienate and anger music listeners…If your invention can be replicated at no cost, why should anyone pay?…Today a new economic model of intellectual property is prevailing”.

What is our response?

In the commercial and media world, let’s look at two business prospects on extreme ends of the continuum.

On one end, is the real prospect for business in the under and un-developed world. Half the world does not participate in the global economy in any way shape or form.

The developed world is increasingly understanding the value of changing this through governmental, private and NGO enterprises. It is not strictly a charitable exercise but a way to grow demand and markets.

The economy cannot be called global until this succeeds on a much greater scale. Central to these prospects are enterprises within our expertise. The sooner undeveloped countries have access to the information and communication revolution which, in many ways we can steer, the sooner there will be unprecedented growth and demand not evident in mature economies.

An example of how we extend the reach into being  called “truly global” may be characterized by SES’ support of One Laptop Per Child (OLPC) Initiative.

OLPC is designed to put into the hands of children around the world the capacity of accessing information and connectivity with others ranging from people in their village or nearby villages, anywhere in their country and potentially around the world.

On the other end of the continuum are the possibilities in the media world with the disruption of old models.

But before we go any further, let’s make something clear. When we say “user generated content” we all think of You Tube or something like it. But You Tube makes no money and never has — except for its original creators who profited handsomely when they sold to Google. 

When Google purchased You Tube and was asked how they intended to monetize it, the answer was: “we’ll figure that out later.”

Let’s be honest. You tube content is dominated by really, really bad material —and the most frequently viewed material inclines toward quality production and content.

But, as you have seen, Viacom is now demanding that You Tube remove all of its Viacom material. Others will surely follow. And You Tube’s offerings will begin to diminish.

Then there is Current TV, Vice President Gore’s effort, which is totally user-generated content. But it’s still part of the standard Dish and cable mass media package.

It’s user-generated content but it’s still part of the old business model for the system providers.

From our point of view, the revolution may have little to do with user generated content and everything to do with user “dictated” content.

I’m talking about free enterprise — for real.

Very recently, an outfit called Virtual Digital Cable in Illinois, has started a service to deliver cable programming without cable — by using only the internet.  No trench digging or coaxial cable or fibre placement… no local franchise or fees. Naturally,
the legal challenges to VDC are blocks long but the point is Disruption for our customers and for us — is inevitable.

Product development and innovative bundled Solutions like IP Prime are important targets. But how do we most effectively and most profitably adapt to the new net-centric content world?

One answer is to consider what I called “My Geosynchronous Media” but someone told me that MGM was taken. Then I tried “My TV” but of course, MTV was taken. So for now let’s just call it “My TV Station”.  “MTVS”

MTVS is a niche media for one; a nano niche.

It is the creation of a net-centric and net- neutral, trusted third party content aggregator designed as “My TV Station” which runs exactly what you want, when you want it on whatever device you choose.

The customer pays only for the exact content they want… whether it’s sports or Friends re-runs, all CSI or whatever. MTVS delivers it and pays the content provider — as a trusted 3rd party must.

Unlike cable and traditional satellite mass programming where you pay for things you never watch, MTVS gathers exactly and only what one person wants to watch when they want to watch it.

This direction means we would become a “Relationship Management” business in addition to our conventional business.

It also means we would, to an unavoidable extent, be in competition with our current customers.

Does that matter? Of course it does. But, these are the kinds of questions we need to face now before it’s too late to do anything about it.

My last issue is “People”. Are the Human resources and talent out there? Can we keep what we have and get what we need? What about the Demographic Wall?

Business Week Magazine recently advised new professionals to stay away from the space business because it offered “no future”. The engineering and science expertise that is the fundament of our industry is aging and this means on one hand that many are near retirement with a thin bench of possible replacement.

On the other hand, those who choose to stay in the business, and we need them desperately,  are making it hard for new people we do attract to move up —- and also difficult to make change.

The truth is that as we move forward, this is not your “Father’s Satellite” world.

When it comes to attracting talent, you could say, we have an image problem natural to a maturing industry and …we have an advancement opportunity problem for the ambitious new engineer we do attract.

It is the science and invention that makes us grow. There is a clear shortage on the horizon.  It is also true that as an industry, we have very poor public communication and we tell no exciting stories which we need to attract talent.

Just as the American military will be 50% composed of X and Y Gen soldiers who grew up in a digital world, my fondest hope for our industry is that we can say the same. If we can’t –then the future will be a lot harder to face.

I have shared some things to think about with you today and I appreciate your listening to them. I’m glad to hear your ideas as well — any time.

But for now, I see my time is up so I guess all I can say is Thank You and…“Beam Me Up — Frank ”.

Thank you very much.

Dean O’s “Hot Tango” Speech

Tuesday, February 20th, 2007
As reported in today’s Satellite 2007 Daily:

Dean Olmstead, director of Loral Space and Communications, said the satellite industry is in the midst of a “hot tango” with the financial community but warned that the industry needs to make sure that the tango does “not turn into a rave.” The financial community is enthusiastic to invest in the satellite industry, especially new opportunities being driven by huge demand for content on the move, Olmstead said Monday
at SATELLITE 2007. But with history littered with spectacular failures, the industry needed to proceed with caution when approaching these new opportunities and not charge headlong into these new market segments “like five-year old kids chasing a soccer ball.”

Olmstead pinpointed numerous opportunities for the satellite industry in areas such as Digital Multimedia Broadcasting and Digital Audio Radio Satellite, but while the broad tone of his speech was optimistic, there was an undercurrent of caution behind his statements. “The financial markets have a lot of money that they are offering,” he said. “You could say there is almost too much money. There are lots of opportunities for new business and to take risks.”

Throughout his speech, Olmstead would paint a bright picture but then invariably put in the odd dark cloud of warning. He also stressed the importance of “satellite fundamentals,” a more old-school type term amongst the new market opportunities. Olmstead pointed to the strengths of the satellite such as point-to-multipoint broadcasting. He pointed to the success of SES Astra and the strong position they have in the market, as well as the Intelsat/Panamsat merger and the importance of point-to-multipoint distribution in the context of that deal.

The other key fundamental Olmstead pointed to was something he dubbed “white spaces” where satellite could provide coverage beyond terrestrial alternatives. However, the demand from the new generation of users for mobile communication services is such that services like Digital Multimedia Broadcasting are no longer dependent on having these so-called “white spaces” to succeed. Olmstead spoke of the multi-faceted nature of modern communications and how the younger generation was anxious to consume video and have a more “liquid” form of communications. With these stronger consumption patterns in mind, Olmstead believes there has never been a better time for the satellite industry to have a stronger impact in the modern communications world.

Olmstead believed satellite operators need to take a more outward approach in its thinking. He referred to Terrestar, a company that likes to see itself as a network company and not a satellite company, and also noted the trend of different people running satellite operators, pointing out David McGlade at Intelsat and Andy Sukawaty at Inmarsat, two executives with strong telecoms backgrounds.

Another key theme of Olmstead’s speech related to the Asia Pacific market. He spoke in-depth about AsiaSat, as well as the impact China could have on the global communications market. According to Olmstead, the SES deal with GE was a “win-win” situation and “is excellent for the Asian marketplace.” Olmstead also hinted at a more vibrant communications landscape in Asia, noting that governments in the region “were acting in a more pragmatic way than before.”

However, Olmstead again followed with a warning. He talked of the growing influence of China and the financial firepower it now carries, warning if Congress adopted a more aggressive stance towards China, it could create long-term ramifications for the satellite industry. In a direct warning to U.S. politicians, Olmstead said, “As an industry, that would not be a cool thing (if Congress flexed its muscles) to happen if they were to buy fewer U.S. treasuries, the kind of low-cost debt money fuelling acquisitions would begin to change. I think you would see fewer [private equity] owners, and more strategic owners.”



Satellite 2007 Blog Feed

Tuesday, February 20th, 2007

Click here for the latest blog posts from the official Satellite 2007 blog.

Making Money on the Moon

Tuesday, February 20th, 2007


Want to get in on the ground floor of the moon?

As NASA moves forward with its $100 billion plan to start human settlement of the moon by 2030, it is making room for private enterprise on our original satellite.

Alan Boyle at MSNBC explains: 

The prospects for private enterprise on the moon  — ranging from astronomical telescopes to gee-whiz television to medical isotopes and fusion fuel — were listed during a weekend session at the annual meeting of the American Association for the Advancement of Science….

The first thing that anyone’s going to make money off of, from the moon, is probably going to be information of some kind," [Paul Spudis, a planetary scientist at Johns Hopkins University’s Applied Physics Laboratory,] said. That could take the form of interactive television, virtual-reality tours or remote control of lunar probes, leading to "a huge entertainment/educational market that will develop around the lunar return," Spudis said.

Worden touted the idea of lunar surface observatories: "There is already a reasonable investment that’s been made by a private group for putting telescopes on the moon for scientific purposes, much in the way that private investors have built many of the large telescopes in the world," he said.

That group is the International Lunar Observatory Association, which is still being organized by Space Age Publishing’s Steve Durst. The concept calls for sending a 10-foot-high (3-meter-high) probe, equipped with a radio dish antenna as well as communication and power-generating equipment, to the lunar surface. In a telephone interview, Durst told that the likeliest site would be Malapert Mountain near the lunar south pole.

Based on two feasibility studies conducted by California-based SpaceDev, the mission could be done for $50 million, with a target date in the 2010 time frame, Durst said. A "founders’ meeting" for potential funders is being planned for this November, he said….

As the pace of NASA’s plans accelerates, Durst hopes the International Lunar Observatory will serve as a relay for communications traffic between Earth and the moon. "We’re looking at commercializing that capability," he told

What I’m waiting for — though admittedly I’ll be waiting a long time — is the first scheduled Virgin Galactic flight to the moon, as I’ve always wondered what spring really is like on Jupiter and Mars.

Sirius and XM Plan to Merge

Monday, February 19th, 2007




They’ve been talking about it for a while, and we blogged how you can have both Sirius and XM integrated in your car. It got real today.

This morning, the New York Post, America’s oldest continuously published daily newspaper, got the scoop:



February 19, 2007 — Satellite radio operators Sirius and XM are expected to announce their long-awaited merger today, according to a source familiar with the deal.

The two sides were locked in negotiations over the weekend trying to hammer out a final agreement with an eye toward going public with the merger today in Washington, D.C., where XM is based, this source said.

Talks were still going on at press time and the deal could fall apart at any time. With antitrust issues of paramount importance, this source said lawyers for both companies were working overtime to fine-tune the language of the agreement and frame the discussion around the deal itself and not regulatory concerns.

The transaction is expected to be structured as a merger of equals, but given Sirius’ higher enterprise value, shareholders in the Mel Karmazin-led firm will likely come away with a larger percentage of a combined company.

According to the source, XM Chairman Gary Parsons will retain that title in the combined entity, with Karmazin likely taking the CEO role. It is unclear what role, if any, XM CEO Hugh Panero will play.

Combining Sirius and XM would result in a single satellite radio operator with more than 12 million total subscribers. A deal would also marry Sirius content, such as Howard Stern, Frank Sinatra and Nascar with XM’s Oprah Winfrey, Bob Dylan and Major League Baseball.

More important, analysts widely predict that a deal would also save the two companies nearly $7 billion annually.

Karmazin and Parsons have been dropping hints since last summer about a possible tie-up, believing that competition from terrestrial radio, online radio and mobile music devices such as iPods have not only expanded the marketplace but also lowered the regulatory hurdles to a deal.

In a note on Friday, Bear Stearns analyst Robert Peck speculated that Sirius and XM needed to move quickly before their window of opportunity closed.

Gaining regulatory approval "could take up to 15 months; hence, we think any proposed deal needs to be announced by the end of March to close by mid-2008," Peck wrote.

On Friday, XM shares hit their lowest point since early November while Sirius shares were approaching 52-week lows. Shares in both companies did trade on heavy volume and ended the session higher, with Sirius gaining 10 cents to close at $3.70 and XM jumping a dollar to $13.98.

 Later this afternoon, it became official: a merger of equals? That’s what they said about Daimler and Chrysler. Here’s the press release:

SIRIUS and XM to Combine in $13 Billion Merger of Equals
Provides Consumers with Enhanced Content, Greater Choices and Accelerated Technological Innovation

Enables Satellite Radio to Better Compete in Rapidly Evolving Audio Entertainment Industry

Extraordinary Value Creation for Shareholders

Mel Karmazin to Serve as Chief Executive Officer and Gary Parsons to Serve as Chairman of Combined Company

WASHINGTON and NEW YORK, Feb. 19 /PRNewswire-FirstCall/ — XM Satellite Radio (NASDAQ: XMSR) and SIRIUS Satellite Radio (NASDAQ: SIRI) today announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.

Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.

Mel Karmazin, currently Chief Executive Officer of SIRIUS, will become Chief Executive Officer of the combined company and Gary Parsons, currently Chairman of XM, will become Chairman of the combined company. The new company’s board of directors will consist of 12 directors, including Messrs. Karmazin and Parsons, four independent members designated by each company, as well as one representative from each of General Motors and American Honda. Hugh Panero, the Chief Executive Officer of XM, will continue in his current role until the anticipated close of the merger.

The combined company will benefit from a highly experienced management team from both companies with extensive industry knowledge in radio, media, consumer electronics, OEM engineering and technology. Further management appointments will be announced prior to closing. The companies will continue to operate independently until the transaction is completed and will work together to determine the combined company’s corporate name and headquarters location prior to closing.

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts’ consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform for future innovation within the audio entertainment industry and will provide significant benefits to all constituencies, including:

  * Greater Programming and Content Choices — The combined company is committed to consumer choice, including offering consumers the ability to pick and choose the channels and content they want on a more a la carte basis. The combined company will also provide consumers with a broader selection of content, including a wide range of commercial-free music channels, exclusive and non-exclusive  sports coverage, news, talk, and entertainment programming.  Together, XM and SIRIUS will be
able to improve on products such as real-time traffic and rear-seat
video and introduce new ones such as advanced data services including enhanced traffic, weather and infotainment offerings.

  * Accelerated Technological Innovation — The merger will enable the combined company to develop and introduce a wider range of lower cost, easy-to-use, and multi-functional devices through efficiencies in chip set and radio design and procurement.  Such innovation is essential to remaining competitive in the consumer electronics-driven world of audio entertainment.

  * Benefits to OEM and Retail Partners — The combined company will offer automakers and retailers the opportunity to provide a broader content offering to their customers.  Consumer electronics retailers, including Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit from enhanced product offerings that should allow satellite radio to compete more effectively.

  * Enhanced Financial Performance — This transaction will enhance the long-term financial success of satellite radio by allowing the combined company to better manage its costs through sales and marketing and subscriber acquisition efficiencies, satellite fleet synergies, combined R&D and other benefits from economies of scale.  Wall Street equity analysts have published estimates of the present value of cost synergies ranging from $3 billion to $7 billion.

  * More Competitive Audio Entertainment Provider — The combination of an enhanced programming lineup with improved technology, distribution and financials will better position satellite radio to compete for consumers’ attention and entertainment dollars against a host of products and services in the highly competitive and rapidly evolving audio entertainment marketplace.  In addition to existing competition from free "over-the-air" AM and FM radio as well as iPods and mobile phone streaming, satellite radio will face new challenges from the rapid growth of HD Radio, Internet radio and next generation wireless technologies.

"We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Gary Parsons, Chairman of XM Satellite Radio and Hugh Panero, CEO of XM Satellite Radio, in a joint statement. "The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago."

"This combination is the next logical step in the evolution of audio entertainment," said Mel Karmazin, CEO of SIRIUS Satellite Radio. "Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies. The combined company will be positioned to capitalize on SIRIUS and XM’s complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders."

The transaction is subject to approval by both companies’ shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. Pending regulatory approval, the companies expect the transaction to be completed by the end of 2007.

SIRIUS’s financial advisor on the transaction is Morgan Stanley and Simpson Thacher & Bartlett LLP and Wiley Rein LLP are acting as legal counsel. XM’s financial advisor on the transaction is J.P. Morgan Securities Inc. and Skadden Arps, Slate, Meagher & Flom LLP; Jones Day; and Latham & Watkins LLP are acting as legal counsel.

I remember when the FCC first authorized both satellite radio service. One stipulation was that receivers be able work with both services.

Personally, I chose Sirius because I think they have better satellites in orbit. The FS-1300 bus, built by Space Systems/Loral, has a long history of reliability. XM’s satellites, the Boeing 702, are technological marvels — but they’ve had some power problems.

Tuesday’s webcast ought to be good. The approval process is going to be quite a show — the NAB has already objected. Since both license terrestrial spectrum to fill in the gap in larger cities, expect every broadcaster to chime in on this one. I can see additional competion coming from digital television radio, too.

DIY Friday: USB Charger Kit

Friday, February 16th, 2007

No matter how cool gadgets get — and whether you buy them or make them yourself — battery life is still the barrier that reminds us that cool stuff only remains cool so long as the juice is flowing.

Unfortunately, toting around all the different chargers that one needs to keep cameras, MP3 players, cell phones and other gadgets going can be a pain in the posterior.

And so for today’s edition of DIY Friday, we present to you…. (drumroll)….. a tin of Altoids!

Ok, not quite. Close observers will notice that little USB port over on the left. Open up the tin, and this is what you’ll find:

The inner workings of a DIY USB Charger Kit, made from this schematic:

What’s that? Need more detail, you say? Complete details on how to make your own USB charger kit for your personal gadgets — with or without the handsome Altoids case — can be found here. An even quicker way to jumpstart your weekend project is to buy this kit from Make magazine. For only $20 plus shipping and a few hours of your time, you can have your own portable way of recharging your gadgets without towing around a bevy of chargers and cords.

Ramen in Space… Again, but Now for Longer

Thursday, February 15th, 2007

According to one of my favorite space sites, SpaceDaily, Japan is Koichi Wakata, whose a veteran astronaut at the ripe old age of 43, will be the country’s first citizen to stay long-term in space begining in the fall of 2008 a three month stint on the International Space Station (ISS).

On his third mission into space (the first happened in 1996, the second in 2000) Wakata will be spending much of his time running a series of experiments in a small laboratory, Kibo (meaning "Hope"), on the multi-national space station. While excited about the opportunity his trip represents, Wakata is even more excited about bringing his nation’s noodles into space.

"’Since I believe that the chances will increase for Japanese astronauts’ long-term stays, I want to check things out such as the clothing, food and accommodation" for future astronauts,’ [Wakata] said.

‘I especially want to try Japanese foods like delicious ramen,’ he said."

Those tasty noodles, invented by the recently deceased Mr. Noodle (right), were originally flown into space on a 2005 US Discovery flight with Japanese astronaut Soichi Noguchi.

Oh, and for those keeping count, according to the Wikipedia, currently 14 of the 193 countries on earth have had representatives visit the ISS so far. Looks like we got 179 to go!

SES Buying Out GE

Wednesday, February 14th, 2007

Reuters reports:

European satellite company SES (SESF.LU: Quote, Profile , Research) (SESFd.PA: Quote, Profile , Research) said on Wednesday it had agreed to buy back a 19.5 percent stake in the company from General Electric (GE.N: Quote, Profile , Research) in a deal worth 1.24 billion euros ($1.62 billion).

SES shares shot up to an 11-month high of 14.80 euros and were up 6.4 percent at 14.50 euros at 1600 GMT, with investors relieved of the prospect of GE releasing shares onto the market.

"SES will contribute certain assets and cash to a new company and exchange shares of that new company for GE’s entire holding of 103,149,900 shares in SES," the company said in a statement of a deal it expected to boost earnings.

In a presentation, SES said it expected its earnings per share to rise by over 13 percent in 2007.

SES Chief Financial Officer Mark Rigolle described the deal as "made in heaven" by removing the overhang of GE’s holding that has been depressing SES shares and by restructuring SES’s portfolio after its 2005 acquisition of New Skies.

SES, one of the world’s largest commercial satellite operators, said it would pay the equivalent of 12 euros for each exchanged share, resulting in a total transaction value of 1.238 billion euros.

This could rise by 45 million euros depending on the closing date. SES said the deal was expected to close in the second quarter of 2007.

GE took the stake in 2001 when SES bought GE’s satellite business Americom.

KBC Securities said in a research note that the valuation of the assets appeared fair, and the disposal of certain assets made sense, with some overlap following SES’s purchase in 2005 of New Skies.

"The transaction should be earnings accretive, will increase financial leverage and bring the free float up to 70 percent," KBC said.

In the credit derivatives market, the cost of insuring SES debt against default edged higher, up 2 basis points to 30.5 basis points, a trader said, on fears that the deal could make the company more attractive in a leveraged buyout.

GE will swap its SES shares for shares in the new company, SES International Holding Inc, comprising assets including one satellite, a variety of stakes in related businesses and 588 million euros in cash.

SES will seek to cancel some 86 million of the 103 million C shares it buys back and convert the remainder to FDRs to pay B-shareholders.

CFO Rigolle said the deal would simplify the shareholding structure, with the cancellation of around one in five of its shares.

SES also set new revenue and core earnings (EBITDA) guidance for 2007 to reflect the GE transaction. It sees revenues of 1.568 billion to 1.608 billion euros and EBITDA of 1.041 to 1.081 billion euros.

SES agreed to buy New Skies in December 2005 to boost its presence in Latin America and the Indian Ocean region.

Separately on Wednesday, Asia Satellite Telecommunications Holdings Ltd (1135.HK: Quote, Profile , Research) said its major shareholder Modernday Ltd planned to take the company private for $282 million. Modernday is jointly owned by CITIC and General Electric Capital Corp. (Additional reporting by Richard Barley in London)

Here’s the official news release:

SES (Euronext Paris and Luxembourg Stock Exchange: SESG) announces that it has agreed with GE a EUR 1.2bn split-off transaction in which SES will contribute certain assets and cash to a new company and exchange shares of that new company for GE’s entire holding of 103,149,900 shares in SES, subject to satisfaction of certain closing conditions. As disclosed in March 2006, SES has been discussing with GE a number of options to achieve a structured exit from its remaining shareholding.

GE will exchange its shareholding in SES for shares in a new company, SES International Holdings, Inc. (“SIH”), comprising assets and EUR 588 million in cash, subject to certain closing adjustments. SES has agreed to pay an equivalent of EUR 12 for each exchanged share1, resulting in a total transaction value of EUR 1,238 million. The cash amount and the transaction value may be increased by approximately EUR 45 million depending on the closing date.

The assets of SIH will be:

  • The AMC-23 satellite and its related business
  •  100% of SATLYNX
  •  49.5% of Bowenvale (representing a 34.1% interest in AsiaSat)
  •  19.99% of Star One
  •  5.5% of Orbcomm

Due to the intended US tax treatment of the transaction, third party valuations of the assets were secured.

The transaction announced today allows SES to achieve two important business objectives: to restructure and optimise SES’ portfolio of assets following the SES NEW SKIES acquisition and to remove the GE share overhang.

The acquisition of SES NEW SKIES in March 2006 added to the SES fleet five 100% owned satellites over Asia, Africa and Latin America (NSS-806, NSS-7, NSS-703, NSS-6 and NSS-5). These satellites are in addition to the spacecraft already owned through participations in AsiaSat and Star One, as well as the three other 100% owned assets (AMC-12/ASTRA 4A, AMC-23 and AAP-1), which have comparable coverage and serve similar business purposes to some of the NEW SKIES satellites. This created an opportunity to restructure and optimise SES’ business assets and portfolio of minority participations which led to the decision to divest from the shareholdings in AsiaSat and in Star One as well as to dispose of the AMC-23 satellite operated over the Pacific Ocean Region (POR).

With SES NEW SKIES generating most of its revenues in the government and enterprise infrastructure segment, SES has also re-evaluated the relevance of certain of its satellite end-to-end managed service activities in the enterprise market. As a result, SES decided to divest from SATLYNX, the group’s end-to-end managed service entity. There will now be an increased focus of the SES service business on media and government applications.

SES expects to derive significant corporate benefits from the transaction as it removes the GE overhang which had created the perception of a cap on the SES share price since the announcement that GE intended to divest its interest in SES.

The transaction is expected to close by Q2 2007 subject to the satisfaction of the closing conditions (which include, among others, receipt of certain approvals from SES’ shareholders, a tax ruling regarding the tax treatment of the transaction for GE, and required regulatory approvals).

An Extraordinary General Meeting will be scheduled for March 15th, 2007, in order to allow the Company to buy back all 103,149,900 C-shares, of which 85,958,250 will be canceled. As the B-shareholders have elected to be paid in FDRs in lieu of cash, the remaining 17,191,650 C-shares will be converted into FDRs in order to pay the B-shareholders for their 42,979,125 B-shares. As a result of the transaction, and while maintaining the number of B-shares at 1/3 of the total, the shareholder structure of SES will be simplified.


Detecting Debris in Space

Tuesday, February 13th, 2007


Just last week we wrote about the International Space Station needing to manuever to dodge junk in space — or, specifically, the debris from the disused satellite that the Chinese recently shot down in a military experiment.

Thus it’s a bit ironic, as NewScientistSpace points out, to learn that the "only experiment designed to survey and trace the origin of space debris too tiny to be tracked by radar has been cancelled:"

An international team of scientists had been planning to capture and catalogue this dust from outside the International Space Station with an experiment called LAD-C (Large Area Debris Collector). Meant to be launched on a shuttle in 2008, LAD-C was going to catch the debris in a sponge-like aerogel mounted on a 10-square-metre aluminium grid.

When a piece of space debris hit the aerogel, it would have sent vibrations along the metal grid, where piezo sensors similar to the ones in electronic drum kits would have picked up the signal.

A computer would have registered the location, impact speed and timing of the strike, and based on the orientation of the space station, this would have given the particle’s orbital trajectory. Researchers would then know whether it came from space junk, an asteroid or a comet, and would be able to study its composition when the experiment was brought back to Earth in 2009…

The cancellation of LAD-C collector (additional details of which can be found here, in this PDF) comes at a strange time, NewScientist argues:

The cancellation coincides with the most dangerous orbital debris event in the history of space launches. On 11 January, China destroyed one of its own weather satellites with a ground-launched ballistic missile, creating more than 900 objects larger than 10 cm across and an estimated 35,000 smaller objects spanning at least 1 cm. The debris spread throughout low-Earth orbit, from altitudes of 200 to nearly 4000 kilometres, and is expected to stay in space for hundreds of thousands of years. 

Without the LAD-C, how will rocket scientists keep up with all the debris in space?

Why, by reading the Orbital Debris Quarterly, of course.

Meanwhile, this rockets scientist has been told by his supervisor (at home, not in the office) that our own personal LAD-C is operational and should in fact be deployed.