CEO Spotlight, Andreas Georghiou, Spacenet Inc.

Spacenet, provider of custom satellite and hybrid network solutions to U.S. government agencies and Fortune 500 companies, is beefing up their government market presence. dcTechSource talked to CEO Andreas Georghiou about his personal career path and the future of the company.

By Avery Fellow | January 11, 2010

McLean, Va.-based Spacenet, provider of custom satellite and hybrid network solutions to U.S. government agencies and Fortune 500 companies, is beefing up their government market presence. CEO Andreas Georghiou, who took the reins at Spacenet in 2006, came to the company after more than 20 years with GE Americom, now SES Americom, where he served in a variety of roles including Chief Commercial Officer, SVP of Business Operations, and President of Americom Asia Pacific. dcTechSource talked to Mr. Georghiou about his personal career path and the future of the company.

How did you come to be CEO at Spacenet?
15 years ago, Spacenet was a competitor of mine. I was at GE at the time. They had five satellites, we had four or five satellites, and we were competing head to head. Then we bought them, and Spacenet became a subsidiary of GE Americom. Then we sold it to Gilat [Satellite Networks]. They became one of my largest customers. In 2006, they asked me if I would be interested in running Spacenet. I thought, "We will continue the cycle of relationships – competitor, assistant company, customer and now company I run."

You were nominated as Satellite Executive of the Year last year. What led to this recognition?
The nomination was probably based on what we were able to accomplish. At the time, we were number two for satellite-based network services. It struck me that to make significant profits we should go back to the establishment of the company 25 years ago. By refocusing the marketing, introducing new products and services, and doing a fine job of controlling costs, we managed to make 2008 the best year that Spacenet has had since its conception. In doing so, we increased our market share. And we attracted new talent from the satellite industry to be part of Spacenet management.

What are your plans with Spacenet in 2010?
Instead of being totally satellite-based, we are expanding our scope of business to be technology agnostic. It doesn’t matter if it’s satellite based or terrestrial based – there are customers that need network services who don’t care about what the technology is behind it, they care that they have a reliable, cost effective service.

When you define satellite-based network services in North America, you are talking about a business that is almost a billion dollars a year. When you include the Department of Defense, you add another billion dollars or so, and including managed DSL services, you add another billion.

We are in the emergency services market, and that has been going very well for us. It’s slow, but it’s growing. So we’re happy with it. We’ve been experiencing growth rates between 25 and 35 percent. The business opportunity came about with the need to have more telecommunications-savvy responses to disasters. With Katrina and other natural disasters, there was even more emphasis.

What are your plans to expand into the government market?
The Department of Defense is trying to address the communications needs of the armed forces, and this is a longer-term project for us. We think it will take between three and five years to get to the point we want to be. To address those kinds of needs, you have to demonstrate a track record. And even though we’ve been in this business for quite awhile, you have to have a track record providing such services to the armed forces. We need to get there slowly, in small steps. Another way to accelerate our penetration of that market could very well be an acquisition. So we are in the market for one or more acquisitions to obtain the relevant technology platform.

We are happy at the pace that we have been moving, and we are stepping up. We have hired Susan Miller CEO of our Integrated Government Solutions division. She was CEO and chairman of Intelsat General Corporation. She did an excellent job of growing their business very substantially over just a few years. We have put her in charge of spearheading our penetration of the DoD market.

Do you expect to make acquisitions this year?
I hope so. I hope that we can have one or more such acquisitions in 2010.

What is the company’s focus this year?
Our biggest emphasis is the DoD. Even though in 2010, that’s not where our revenues will come from, but for long-term strategy and long-term growth, there is no question in my mind that is my number-one priority for 2010. We’ve got to continue to develop in anticipation of DoD technical requirements.

The other area of emphasis is managed services, which is not necessarily satellite-based. We have a new product called Prysm. It’s a low-cost router capable of interconnecting with satellite, wireline or wifi. It’s also a very important focus for us for 2010.

How has Spacenet been affected by the recession? What is your economic outlook?
One of the negative impacts of the recession on our business has been the postponement of the buying decisions of our customers and prospective customers. For instance, we have a major bank that was about to spend 10 to 15 million dollars to start and service a data network system for their bank branches or one of their brokerage subsidiaries. Those decisions were postponed. In 2009, a lot of the market opportunities we had in the pipeline got pushed back.

Is that looking better for 2010?
I think so. We’ve seen our pipeline picking up, becoming healthier and bigger, because of customers who make investments. I think it now looks a lot better than it looked at the beginning of 2009 and the end of 2008.

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