Yasuhiro Hoshino, Associate General Manager of Marketing in NEC's 2nd Overseas Microwave and Satellite Communications Systems Division, Radio Operations Unit, saw that first satellite broadcast as a student and is now one of NEC's point men in keeping the company in the vanguard of the satellite ground station market. Increasingly, this means business in Latin America and Asia, areas where economic development has led to a strong demand for satellite communications.

Operated from the company's Yokohama Plant about 25km South of Tokyo, NEC's Radio Operations Unit and its 2,830 employees did $2.8 billion in business last year, 38% of which was for personal handy-phone systems, microwave equipment and ground stations. Another 11% of the business was for space systems including complete satellites (including Earth observation and weather satellites), satellite transponders, and other satellite components. The remaining 31% was for aerospace equipment.

With 55% of its business outside Japan, NEC has installed ground station systems or equipment, including VSAT, in 122 countries, according to Hoshino. Orders for large earth stations from countries such as India, Sri Lanka, South Korea, Ecuador and Costa Rica is expected to bring in 3 billion yen in sales this year.

Hoshino said that NEC is the top seller of ground stations in the world on the basis of market share, which is about 30% for INTELSAT STD-A (135 installed) and STD-B (56 installed). He said NEC has a 60% share for large INMARSAT ground stations, and a 61% and 60% share in ARABSAT and EUTELSAT ground stations respectively. The ARABSAT uses 11 meter C-band antenna and EUTELSAT has 10 to 12 meter Ku-band antenna.

In Japan, NEC has a 50% share of the market, with Mitsubishi Electric Corp., Toshiba Corp. and Japan Radio Co., Ltd. (JRC) considered its biggest domestic competition.

In Toshiba's case, the company is trying to concentrate on other areas of the business. "Toshiba is focusing on network control systems for ground stations," said Mr. Makoto Ueda, a Toshiba spokesman, adding that these systems will be used within the INMARSAT P mobile phone system.

Hoshino sees four areas of growth in the satellite industry. At the top of his list was the VSAT market, which he said was growing again, particularly in Asia. "The driver for this growth is the need for high-speed data interchange and other services such as rural telecommunications and low cost voice telephony," he said. He predicts that VSATs will make up 20% to 30% of NEC's overseas sales over the next two to three years for the satellite and microwave ground segment.

He also says INTELSAT ground stations are a steady source of revenue. Although demand is slow, it is constant with new satellites being launched and ground stations being upgraded continually.

A third area of growth is for mobile telephony via satellite, such as the consortiums getting set to launch low Earth orbit satellites to provide global mobile telephone services. "We are working on ground station development and maybe within three years we will have one ready for one of the LEO consortiums," he said, adding that these systems would mainly be gateways to the global mobile phone network. Though he wouldn't be specific about which one of the consortiums NEC is in contact with, he said it wasn't Motorola Corp.'s Iridium project.

Direct broadcasting via satellite was the fourth growth area Hoshino pointed to. With new digital services set to begin in Japan by Hughes Corp. and Digital Multi Channel Corp. (DMC), both of which will use Japan Satellite System's (JSAT) recently launched JCSAT-3 communications satellite, the market for reception equipment is expected to expand.

Internationally, the combination of satellite TV and the need for data interchange in Asia and Latin America will drive sales of VSAT and parabola antenna, Hoshino said.

NEC already has a 29% market share in Latin America for VSATs on a system basis and a 35% share in equipment on a unit basis. Mexico is their best stronghold in Latin America with an approximate 40% share of the market there, and they have a share in Brazil of about 30% by selling their equipment through GTE Spacenet. In Asia (excluding Japan) they have a 12% share of the systems market and a 30% share of equipment.

Malaysia and the Philippines have also proven to be customers for NEC's new synchronous digital hierarchy based digital microwave system called the "2000 Series," the large capacity model of which can be used as a terrestrial telecommunications trunk line with both 140 and 150 megabits per second transmission speeds.

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