DIRECTV 2003 Annual Report Download - page 18

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THE DIRECTV GROUP, INC.
brand recognition and reputation. DLA believes that its service compares favorably to its competitors in these
areas. The operating platforms of SKY Latin America represent DLA’s principal DBS competition in the major
markets in which it operates, other than Puerto Rico, where EchoStar is the principal DBS competitor. DLA
competes with SKY Latin America primarily in Brazil, Mexico, Chile and Colombia. In most Latin American
markets, cable services are the primary competitors in the MVPD market.
PANAMSAT
We own approximately 80.5% of PanAmSat, which is a leading global provider of video, broadcasting and
network distribution and delivery services through its fleet of 25 satellites. PanAmSat is traded on the
NASDAQ®stock market under the ticker symbol “SPOT.” PanAmSat leases transponder capacity on its
satellites for the distribution and delivery of entertainment and information to cable television systems, television
broadcast affiliates, DTH television services, ISPs, telecommunications companies and other corporations and
governments. Its customers include some of the world’s leading media and communication companies.
PanAmSat distributes channels such as HBO, the Fox Family of channels, ESPN and MTV. PanAmSat operates
in the most mature segment of the satellite communication business, historically characterized by steady and
predictable revenue streams, strong cash flows from operations and substantial revenue backlog.
PanAmSat currently has 25 satellites in orbit, including five in-orbit backups, representing one of the
world’s largest commercial geostationary earth orbit satellite networks, capable of reaching over 98% of the
world’s population. PanAmSat is one of only a few companies worldwide that is capable of servicing a global
footprint through a fleet of owned satellites. PanAmSat operates its 25 satellites in 16 orbital slots and has one of
the most sophisticated ground infrastructure networks available to support the needs of its customers. PanAmSat
has eight technical facilities in the U.S., which provide transmission, monitoring and control services for
operating its fleet of satellites and transmission and other services for its customers. PanAmSat leases such
services outside of the U.S. to support the remainder of its worldwide satellite fleet.
PanAmSat’s strategy is to be the world’s leading provider of video, broadcasting and network services
through customer-driven, integrated, state-of-the-art satellite and terrestrial networks. This goal is based upon the
expanded use of its satellite fleet, improved connectivity to its terrestrial network and its 24 hours a day, seven
days a week customer support organization capable of serving distributors of video entertainment, operators of
business networks, government agencies and other customers around the world.
PanAmSat plans to accomplish this goal through the following initiatives that it believes will deliver
technologically superior services that in turn will improve revenue and profitability: continuing to increase the
value of the U.S. video market by developing high margin customer-driven applications, increasing sales to the
U.S. and other governments, using advanced IP-based applications to meet increasing demand, launching service
extensions and selectively pursuing acquisitions.
During the fourth quarter of 2003, PanAmSat agreed to amend its satellite transponder lease agreements
with DLA. These amendments became effective in February 2004 upon DLA LLC’s emergence from the Chapter
11 bankruptcy proceedings. In conjunction with these amendments, we have agreed to guarantee all of the
satellite transponder lease agreements between PanAmSat and DLA for a period of five years.
PanAmSat’s principal global competitors in the fixed satellite services industry are Intelsat Ltd., SES
Global, and New Skies Satellites N.V. PanAmSat’s principal regional competitors are Asia Satellite
Telecommunications Company Limited, also known as AsiaSat, Satmex S.A. de C.V., Loral Space &
Communications Ltd. and Eutelsat S.A. PanAmSat’s satellite services also compete with certain of the services
and products offered by providers of terrestrial fiber optic cable networks.
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