Hi Bronk,New Skies' has annualised revensues of US$200M and they...

Hi Bronk,

New Skies' has annualised revensues of US$200M and they own the satellite and the footprint, as well as a number of other satellites out there.

It is New Skies that has the Asian footprint coverage, not MUL.

MUL is not New Skies. Don't, therefore, get the 2 comapnies confused.

New Skies own the US$280M satellite which MUL is using.

To quote from MUL's Annual Report:
"Our two-way satellite solution covers a large area - 60% of the world’s population. We have proven over the past 20 years that we have been able to deliver into international markets; that is where our skill set and experience is".

Now, to quote from the Findlay's research report:
"Multiemedia commence commercial satellite operations on October 1, 2003 with a 5-year contract to increase from 1 to 3 transponders. Each transponder generates A$100m of revenues at current prices".

And, from New Skies own Annual Report, for 31/12/02:
"NSS-6
Launched December 17, 2002 – the new broadband
multimedia satellite for Asia. From the prime orbital slot at 95 degrees east, NSS-6’s six broad Ku-band beams – covering India, China, the Middle East (including
Cyprus and Southern Africa), Australia, Southeast Asia and Northeast Asia – are capable of connecting more than 60 percent of the world's population. This satellite is a sophisticated router in the sky that can be
configured and reconfigured from our ground network
in response to demand for video, Internet, voice and
data applications. transmissions throughout the Asia-
Pacific region, with transoceanic connectivity between North America and the Pacific Rim".

MUL is leasing transponder capacity and according to Findlay's will make 40-50% EBITDA margin. New Skies are already operating at 40-50% EBITDA margin.

How long do you think that corporates (etc) will pay these types of rates before they react to things, or go with the competition?

Australians also have a strong resistance to pricing points - look at mobile phone charges, SMS charges, internet charges and the like. Determine the medium term trends and then do your sums.