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Of Satellites and Bicycle Rickshaws

Posted By Robert Bell, Thursday, January 13, 2011
What is the single biggest operating expense for most teleport operators?  Teleports are capital-intensive businesses, but that cash outflow appears on a different part of the ledger.

Teleport operators write their biggest operating expense checks to the vendors who sell them satellite transmission capacity, which they use to deliver end-to-end solutions to customers.  That fact makes the ability to get the best deal of prime importance to every operator, and a matter of survival to some. 

WTA has just published the first-ever guide to getting that best deal.  How to Buy Satellite Capacity is based on interviews with more than a dozen executives for operators large and small in North America, Europe and Asia.  It describes the factors that determine what teleport operators pay for capacity, how to position requirements, negotiate and – perhaps most important of all – manage the risks. 

The relationship between teleport operators and satellite operators is complex.  Satellite operators are vendors to teleport operators, and view them as an important channel to market.  Sometimes, satellite operators function as strategic partners that bring uplinking business to teleport operators.  But in other cases, satellite operates compete directly with teleport operators for managed services business.  As one of our interviewees put it, "Everybody is a partner and customer and competitor at the same time.”

How to Buy Satellite Capacity offers the experience of "old hands” at playing this complex game.  We have published it to spread essential knowledge among our teleport operator members on the best ways to manage their businesses.  We will be doing a great deal more of that through our Four Nines Project, which promotes best practices in teleport operators, technology and management for the good of teleport operators and their customers.

This industry is full of great stories, and How to Buy Satellite Capacity has its share.  My own favorite: the travails of an operator who was delivering satellite-based services into an Asian nation when a coup toppled the elected government.  Overnight, the military government outlawed satellite operations.  Why?  The army had installed a lot of fiber capacity and their marketing plan involved arresting competing telecom executives and forcing customers to use their fiber.  To help his company survive the damage, an intrepid executive for the teleport operator went into the country to collect from customers for services rendered before the coup.  During a public transit strike, he hired bodyguards and a bicycle rickshaw, collected tens of thousands of dollars in cash and caught an evening flight out of the country.

Now that’s the spirit that built the teleport industry, and will keep it competitive for years to come!

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