In a conversation with Lou Zacharilla, Newcom International President and Teleport Executive of the Year Jaime Dickinson discusses how satellites can bridge the digital divide, among other issues.
In March 2010, Jaime Dickinson was named Teleport Executive of the Year by the World Teleport Association at its annual Teleport Awards for Excellence Luncheon. The president and COO of Newcom International boasted the industry’s second-fastest growing teleport in 2009 and one of the most talented and motivated organizations in the industry. Jaime is a native of Peru, with a style that blends the quick mind of an entrepreneur and the discipline of a manager who must master engineering details. Like many senior leaders in the teleport industry, he is a breath of fresh air because of a wide range of interests. He seems to me a guy who trusts his instincts. His launch within the satellite industry began with a successful venture called Vannamei, a satellite equipment distribution company. He sold it to American Tower where he worked briefly for the ill-fated Verestar venture. In 2004 he launched Newcom International and it was an immediate success. Today he oversees all operations at the Miami-based company, and is focused on expanding Newcom’s global presence and building marketshare in countries that are rapidly developing their communications capabilities.
Industry insiders know that Newcom has emerged as a leading voice in the teleport industry. This was evidenced by Dickinson’s recognition in March 2010 in Maryland (USA), when he received his award. I was pleased to be able to announce his award before the 200 leaders of teleports, satellite fleets and tech companies in the room. I have wanted to have a chat with him about a range of projects, including a digital inclusion project in Latin America, with iDirect’s Evolution, product that was widely covered. I finally caught up with him last week. In this exchange, he discusses how satellites help bridge the digital divide. And he does not mince words with regard to channel conflict with satellite operators or about trends in the teleport industry.
Excerpts of the exchange follows:
Lou Zacharilla (LZ): First of all congratulations again for being named the teleport industry’s Teleport Executive of the Year.Did you celebrate when you got back to Miami in your world-class restaurant, La Cofradia?
Jaime Dickinson (JD): Thank you, Lou. Of course we did. But you should know that I started celebrating in D.C. with friends and industry colleagues first, and thenwent back to Miami and continued the celebration at La Cofradia.
LZ: A restaurant that I look forward to visiting. Last month, the World Teleport Association issued its study of the teleport industry. To the surprise of some, it reported that Latin America and emerging economies had experienced greater CAGR – by a factor of 3% overall - than in the traditionally strong broadcast and communications markets in North America and Europe. How do you interpret those results?
JD: Mainly as empirical evidence of something we all thought was happening: the rest of the world is playing “catch-up.” We have an abundance of top quality telecom networks in the U.S. and Europe, which are very good and very advanced. South America, Africa and other developing countries are way behind, yet the needs of these markets grows. Our work in Colombia is a good example of what this market looks like. So it makes sense that the growth is from there. They need to invest to get to par with the U.S. and Europe and to begin to take advantage of global networks and the global economy.
LZ: What is mainly driving the demand?
JD: Part of it, interestingly enough, is the demand being created by international businesses from Europe. I’ve seen this in Africa, a continent we service and have done well in to close digital gaps. International firms from Belgium, France and other European countries have been going to these nations to build factories, create new ventures and are demanding better communications services. Of course, public institutions also need to fast-forward in order to keep up.
LZ: This may be what has kept our industry growing and stable, even during this nasty economic climate.
JD: As we have come to learn, economic expansion is enabled through robust, reliable communications. Communications can replace location as the critical factor in the enterprise sector’s decision to locate to a place today. Short of a total meltdown in the global economy, this will continue for many, many years.
LZ: It’s true. I like to say that we have “eliminated the middle of nowhere.” Robust communications and plenty of bandwidth are like oxygen and, clearly, no economic development officer or political leader with any sense is going to allow opportunities to slip away by allowing the communications infrastructure to remain pre-historic. That seems clear.
JD: Yes it does. Newcom presses this point and finds a receptive audience. We have the advantage of having been born or lived in Latin America but with a teleport and a hub in the United States.
LZ: Going back to the WTA study, it also reported that, overall, the number of teleports worldwide has shrunk. You run a teleport. Do you see this as part of a natural consolidation in a maturing market, or a more ominous trend based on purchasing requirements from the customer side of business?
JD: I think it has to do with consolidation. The major players have been acquiring teleport facilities to streamline operations. Therefore it makes economic sense to shut down some facilities. That is a function of a maturing business environment.
LZ: So you think it is a healthy sign. That’s good. We do know that acquisition activities are continuing. Let’s talk about recent events. Newcom provided availability for the World Cup out of South Africa. Aside from the fact that Argentina, the team I had my money on, got blown away in the end, we know that the event was good for the satellite community. From Newcom’s perspective, were there any advances in technology or service from this year’s World Cup that are notable?
JD: It is a great event, win or lose.
LZ: I’d rather win. It’s an American thing. It sounds like Newcom did win.
JD: It went very well for us. We were able to provide capacity to transmit games throughout Africa, Europe and Latin America. We definitely saw advances in optimization technology. That helped a lot because there was a shortage of resources. Thanks to advances in bandwidth optimization technologies, we were able to expand our distribution capacity while utilizing fewer resources.
LZ: You mentioned capacity. That brings me to a somewhat sensitive subject regarding the folks in the sky. One issue that has been very much on the mind of your colleagues in the teleport industry is the “channel conflict” among the satellite operators and teleports. Does Newcom experience this conflict? What are the impacts?
JD: NewCom definitely experiences this. The impact is that there is no longer any loyalty. The big players are trying to kill the small players, frankly, with no respect or sense of long-term relationships or the ethics that should normally protect client relationships and vendor loyalty. The response to this impact is what you would expect. Smaller players are looking elsewhere for service and for partners. To counter the problem, we (NewCom) quickly created relationships with Tier Two vendors that are focused on providing bandwidth sales instead of competing for customers. They allow us to offer very good pricing and compete with the Tier One operators. We have also focused on developing value-added services and providing turnkey solutions to our clients so that we aren’t just bringing connectivity to the table.
LZ: You can innovate your way out of the conflict, which is always necessary. But is there a viable solution to channel conflict?
JD: I think the only way to resolve channel conflict in a substantive way is for satellite owners to go back to their core business of selling bandwidth. Certainly undermining an industry that feeds it substantial – very substantial – revenues is not a viable solution.
LZ: At least 25% of all operator revenues run through the accounts of teleports. The two groups are interdependent. To take the other side, it is a dilemma that may be coming from outside pressures. I wonder whether going back to the “core” business really means selling bandwidth, or if “core” is being redefined? In other words some operators – and I emphasize some– are managing large debt and have outside shareholder or financial pressures on them that may be driving a strategic adjustment in their business. They may think that being like a teleport operator is “core” to their business and that teleports, because they are not individually powerful enough, may simply need to go along.
JD: As I say, operators need to carefully consider their core business proposition and the consequences of their actions over the long-term. The business cycle has not been outlawed and people have memories. We may be business people but the way we work is based on human relationships, trust and a need to work with partners who are on our side and who understand our businesses. When a company begins to change its dynamics and moves away from its core business and threatens our livelihood, bad things can happen to relationships. We saw this happen when the telecom sector crashed eight to ten years ago and I think it will happen to satellite operators if they are not careful.
LZ: I believe there is a need for smaller teleport operators to form stronger collective alliances and to function more as a technology union. Not only to combat channel conflict but to concentrate on other ways to collectively leverage strength and build the industry. World Teleport Association initiated a series of member forums last year and learned that channel conflict is but one of several issues that impact businesses. In fact, the WTA is presently conducting a study of the impact of Ka-band on the business. Ka-band has a lot of people excited, especially as broadband consumption rates grow. What is your view on how Ka-band will impact the teleport business?
JD: It will have a positive impact because Ka-band equipment is much less expensive than KU-band equipment and will allow us to provide mass distribution by going directly to individual households.
LZ: Certainly the market trend is to provide more and more bandwidth, speed and broadband access to individual households, devices and remote places.
JD: In Columbia, where we have been working to bring Internet connectivity to more than 1,000 rural communities nationwide, I see Ka-band as the next phase. I see us moving from Ku-band to Ka-band because, among other reasons, it will save significant money on equipment.
LZ: When you accepted your Executive of the Year award you noted that your ardent belief is that the type of communications that the satellite industry provides is essential to education, economic development and stabilization in developing countries. To a large degree, this is a case of “doing well by doing good” and using Ka-band as a technology to make it happen. Do you believe that we as an industry can fulfill a moral mandate to connect communities that have no access and profit and allow them to participate in the "broadband economy?”
JD: I believe this one-hundred percent. I mentioned our work in Colombia and there is a good case study out now which really details this.
LZ: In that case study, you said that “connectivity has been like a walk on the moon” for many of these people.
JD: We extended connections to a region where access was virtually non-existent.
LZ: Colombia is an interesting place. It has dense mobile coverage today, but as recently as 2005 had only 11 percent Internet access. Thanks to this project it is moving forward.
JD: Thanks in large part to teleports and satellite. We (the staff at NewCom) come from those regions and we know that there is a lack of 21stcentury communications. It is the biggest problem developing countries face. So, yes, I do believe that it is our moral obligation to help provide education through telecom connectivity to rural areas in developing regions. We helped bring access to 650 schools, hospitals, farms, businesses, churches in remote communities in six months through a government and local ISP deal. I have definitely seen the positive social and economic impact.
LZ: Governments have gotten the message, yes?
JD: Many politicians have begun to see the positive effect and as a result they are championing massive and reliable communications networks in their countries. They see communications as the tool to bring business, education and economic growth. (They also see it as a way to get their message out to the people so they can win more votes!) We are now seeing this model duplicated in Africa. It is exciting to be in the middle of the communications revolution and, as you say, “eliminating the middle of nowhere.”
LZ: And making it happen from a teleport in Miami where there is an award trophy to confirm all the hard work. Thanks, Jaime.
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Lou Zacharilla is the Director of Development of the Society of Satellite Professionals Interntional (SSPI). He can be reached at LZacharilla@sspi.org
