Intelsat is the world’s largest provider of satellite capacity for network services, according to Euroconsult, with a 32 percent global share. There is an increasing need for basic and high-speed connectivity for fixed and mobile applications in developed and emerging regions around the world. The largest application within our network services business is the provision of private data networks for enterprises, value-added service providers and other organizations, supporting broadband connectivity for financial, energy, mining and other verticals. In addition, we provide an essential element of the infrastructure supporting the rapid expansion of wireless services in many emerging regions.

Network services is our largest customer set. At $1.2 billion, our network services revenue declined four percent as compared to 2013, and represented 46 percent of our revenue for the year ended December 31, 2014. Network services contracted backlog totaled $2.7 billion at December 31, 2014, as compared to $3.2 billion at year-end 2013.

Growth opportunities for our network services business include increased demand for aeronautical and maritime mobility applications and high-throughput satellite (“HTS”) capacity for fixed and mobile broadband applications for telecommunications providers and enterprise networks. We are developing new service offerings and investing in innovative ground technologies that will provide ease of access to our services, expanding our addressable applications.

Overall, in 2014 our network services business was challenged by three factors:

  • Oversupply in Africa, resulting in pricing declines;
  • Our point-to-point channel and trunking product reaching end of lifecycle; and
  • No new launches of Intelsat capacity suitable for network services applications until 2016.

In 2015, we expect that additional point-to-point services will be unlikely to renew, given the availability of fiber in certain of our territories. The network services business will also continue to experience pricing pressure, particularly in the Africa region.

Focused on the Next Generation

Our next generation Intelsat EpicNG satellites, such as Intelsat 29e and Intelsat 33e, will provide high performance inventory to offset these recent trends, providing bandwidth for wireless infrastructure, mobility and enterprise applications. Additional upcoming satellite launches benefitting our network services business include Intelsat 34, Intelsat 29e, Intelsat 32e and Intelsat 33e satellites, which are expected to enter service largely in 2016 and 2017.

Network Services Case Study

Intelsat’s satellites continue to provide critical broadband infrastructure to regions where terrestrial technologies are not cost-effective, are unreliable or are impossible to use given geographies. In 2014, Intelsat and Gilat Colombia, affiliated with Gilat Satellite Networks, a worldwide leader in satellite networking technology, solutions and services, signed a multi-year, multi-transponder agreement under which Gilat Columbia will use Ku-band capacity on Intelsat 907 at 332.5° E to support the Kioscos Vive Digital 2 (KVDII) project. KDVII provides connectivity to rural communities and schools in six regions within the framework of the Colombian Ministry's national Kioscos Phase 2/Vive Digital project. Gilat’s high performing and efficient technology combined with Intelsat’s flexible and high-performing satellite services closes that digital divide and delivers essential internet connectivity and telephony to children and adults in communities across Colombia. The KVDII project is a great example of how the satellite community works together to provide the necessary connectivity to aid in the educational and economic development of fast-growing economies, such as Colombia. In addition, Gilat will integrate its SkyEdge II WebEnhance data networking platform with Intelsat’s satellite services to provide internet connectivity to 1,903 kiosks in rural communities in Colombia.