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Greg Wood
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Thursday, 19 July, 2001, 12:16 GMT 13:16 UK
Satellite service set for privatisation
Shuttle astronauts manoeuvre an Intelsat satellite into position
Intelsat: heading for a flotation next year
By Greg Wood, BBC business correspondent

Intelsat, the global satellite system, is being privatised after nearly 40 years operating as an international co-operative.

Intelsat pioneered satellite communications with its formation in the early 1960s and is most famous for bringing the world live images of the first moon landing in 1969.

But the company said its former structure as an international treaty organisation with nearly 150 member countries needed to change.

As a result, it has now become a private company, and will float up to 20% of its shares next year.

Flexible response

The move is necessary to ensure the company can keep up in the modern communications market, said Intelsat president John Stanton.

Over 200 members from 145 countries
Largest shareholder: Lockheed Martin with 20%
2000 revenue $1.1bn (776m)
2000 net income $504m
"Privatisation makes decision-making easier when you have a board of directors instead of having to consult nearly 150 governments," Stanton said.

"It also gives us the flexibility to make us more competitive" by being able to tap into new funding from selling stock or raising debt, he said.

When it was founded Intelsat was the only organisation which could provide the services it offered.

Without discrimination

It was set up to provide satellite communications to all countries around the world, without discrimination.

With the arrival of the Internet, demand for satellite capacity has grown enormously.

Intelsat is now just one of several competing systems, building and launching bigger and ever more sophisticated satellites.

But members, who now have shares in the corporation, will be keen to make sure that co-operative principle is maintained in the private sector.

The decision to privatise follows pressure from the US, which last year passed a law that threatened to lock Intelsat out of the US communications market if it did not expedite privatisation.

As a result the US nearly faced ejection from the organisation it helped found.

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