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 That day cannot come soon enough for the only provider of commercial
satellite images in the United States. Until then, DigitalGlobe
cannot use its technology to full effect, Chief Financial Officer
Yancey Spruill told Reuters in an interview.
"There is a market opportunity with a roughly $400 million
addressable market that we cannot participate in today because of
the regulatory regime of our government," Spruill said.
Longmont, Colorado-based DigitalGlobe sells satellite images used by
governments and companies such as Google Inc to make maps. It also
provides imaging services and satellite monitoring for mining and
oil companies.
DigitalGlobe has waited almost a year since applying with the U.S.
Department of Commerce for a license to sharpen the resolution of
its images to 25 cm from 50 cm - the difference between being able
to identify a car and the make of that car.
Satellite image providers in other countries are as yet unable to
provide such high-resolution images, Spruill said, but they are
catching up - an argument used by DigitalGlobe in trying to persuade
Washington to relax its rules.
The argument appears to be gaining traction. DigitalGlobe's shares
have risen more than 10 percent since April 15, when Director of
National Intelligence James Clapper said U.S. intelligence agencies
had agreed to allow commercial providers to sell higher-resolution
images.
"Ultimately, whether we sell the imagery or foreign governments are
going to have that imagery, it's going to happen because technology
is evolving and foreign governments and companies are investing in
that advancement," Spruill said.
The global market for high-resolution images is dominated by aerial
surveyors such as Japan's Pasco Corp and Norway's Blom ASA, which
use cameras mounted on aircraft to capture images with resolutions
as sharp as 15 cm.
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While satellite images are of lower resolution, they can be
delivered faster and updated more frequently than aerial images.
They are also cheaper, because they do not involve the cost of
hiring, fuelling and piloting planes: Andrea James, analyst at
Dougherty & Co, said DigitalGlobe can sell imagery at $27 per sq km
or less, compared with the $200 sometimes charged by aerial
surveyors.
DigitalGlobe, which has a market capitalization of $2.3 billion,
gets about 85 percent of its revenue from government contracts
around the world. U.S. government contracts alone account for 58
percent.
Spruill said the company had identified Europe, Japan and the United
States, which already have well-developed aerial imagery industries,
as key growth markets.
DigitalGlobe, which had revenue of $613 million in 2013, has
forecast revenue of $630 million-$660 million for the year ending
December 31.
Analysts were expecting $645 million, according to Thomson Reuters
I/B/E/S.
(Editing by Feroze Jamal)
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