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"We Are Not Belgacom"

Posted By Robert Bell, Monday, August 1, 2011
Teleports are high-value assets. It takes at least a couple million bucks to build one, and the longer it operates, the more investment is typically poured into keeping it current with the state of the art.  

In every down cycle for the business, teleports are put on the block. There, they can prove to be volatile assets. An operating teleport with a customer base has a lot of value but these are seldom the ones put up for sale. How much is the facility itself worth?  It all depends on market conditions, on the specific needs of the buyer, and on the design, licensing and terrestrial connectivity of the teleport itself. One of the best deals in the industry's history – for the buyer, that is – was the acquisition by SES of the teleports that American Tower accumulated in its Verestar subsidiary before putting the business unit into bankruptcy.  In 2004, SES paid $18 million for 4 teleports and related businesses for which Verestar had spent many, many times that amount.  

All this I knew already when I spoke with Nitin Dhawan, CEO of Belgium Satellite Services, during the SATELLITE conference in Washington.  From him, I learned something new: that teleports have reputations that can outlive their ownership. The name Belgium Satellite Services (BSS) may make you think of chocolate and beer, but Nitin and his team are Indians and BSS is owned by an Indian company, ORG Informatics.  ORG bought 2 teleports near Brussels from Belgacom, the national carrier, with the aim of building out a diversified satellite services business serving broadcast, ISP and enterprise markets.   

After the purchase, however, BSS discovered that it had acquired more than it bargained for. In addition to the facility, equipment and terrestrial interconnects, the teleports also came with a reputation for terrible service. Under Belgacom, satellite ground services were apparently delivered in classic PTT style: minimum effort, maximum bureaucracy and little or no interest in solving the customer's problems. The reputation was bad enough that, when prospective customers learn what teleport will be delivering their service, it can put a chill on the developing deal.   

"We are not Belgacom," Nitin told me, "and the sooner everyone realizes it, the better off we will be."   

Fortunately, while memories can be long in this business, good performance trumps all, and there is always the opportunity to build a new reputation as a high-value asset in the European market. 

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Josh Darville says...
Posted Friday, September 9, 2011
Great Article. I believe that Nitin would also benefit from taking at a look at the SBPronto solution. We increase performance and capacity well beyond what other solutions do, with out increasing the support costs or any end user software. Performance, and customer service being the goal. I'd love to see if we could help.
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