DIRECTV 2002 Annual Report Download - page 26

HUGHES ELECTRONICS CORPORATION
PanAmSat’s satellites. In this way, other content providers access the same audience receiving an
existing lineup of premier programming.
As leading media companies have come to rely on PanAmSat’s satellites to distribute their
content, PanAmSat’s network has become one of the largest global video distribution platforms
available today. PanAmSat’s satellite fleet in the U.S. delivers more than 100 of the leading cable
television channels and is capable of reaching 10,000 cable head-ends, representing approximately 69
million cable households. In addition, PanAmSat’s satellites provide direct-to-home television services
to eight direct-to-home platforms worldwide making PanAmSat one of the largest third-party providers
of direct-to-home television services. PanAmSat’s strong market presence in video services has
enabled it to enter into long-term contracts with its customers. At December 31, 2002, PanAmSat’s
video services contracted backlog was approximately $4.69 billion, or 84%, of total contracted backlog.
Network Services. Through PanAmSat’s network services, PanAmSat provides satellite services
for relaying voice, video and data communications around the world. PanAmSat currently provides
network services to telecommunications carriers, multinational corporations, network service providers
and governments in over 80 countries. PanAmSat’s network services comprise four categories:
• private business networks—secure, high speed corporate data networks used in a variety of
business functions;
• Internet services—offered to content providers and Internet service providers for improved high
data rate Internet connections and point-to-multipoint content distribution;
• carrier services—offered to telecommunications carriers to provide voice, video or data
communications networks for businesses, governments and other users; and
• government services—provided to the U.S. and foreign governments for secure voice, video or
data communications.
PanAmSat views its network services as a major contributor to its future growth. The network
services remain one of the fastest growing segments within satellite telecommunications, with the
transport of Internet protocol content and streaming media applications generally regarded as the
primary drivers of growth. Because PanAmSat’s space and ground network is designed to broadcast
streaming media content to multiple locations in an efficient manner, PanAmSat’s strategy is to capture
a meaningful share of the anticipated growth in these areas. At December 31, 2002, PanAmSat’s
network services contracted backlog was approximately $830 million, or 15% of total contracted
backlog.
Telemetry, Tracking and Control and Other Services. In addition to the telemetry, tracking and
control (“TT&C”) services PanAmSat provides for 17 of its satellites, PanAmSat also provides TT&C
services for seven satellites owned by other satellite operators. PanAmSat also offers in-orbit backup
service, reserving transponder capacity for certain customers. At December 31, 2002, PanAmSat’s
TT&C and other services’ contracted backlog was approximately $30 million.
Competition. PanAmSat primarily competes with companies and organizations that own or utilize
satellite or ground-based transmission facilities. Satellite operators include:
• global competitors such as Intelsat Ltd., SES Global S.A. and New Skies Satellites N.V.; and
• regional operators expanding globally, such as Loral Space and Communications, Ltd. and
numerous other regional operators and governments.
16