H.E. Secretary General, President of the Conference, Honorable Ministers,
Honorable Ambassadors, Distinguished Colleagues, & Guests:

It is an honor to be in Vienna today to address this prestigious gathering. I wish to thank the UN and its Special Committee on the Peaceful Uses of Outer Space for inviting INTELSAT to participate in the valuable discussions taking place here this week. I'd also like to thank the Government of Austria for making this event possible.

I am here today to update you on important developments affecting INTELSAT - and the global telecommunications marketplace. You are all very aware that a good telecommunications infrastructure is part of the foundation required to promote commerce, trade, employment, social and economic development and prosperity in any country or region. Indeed, the establishment of the ITU is testament to this, as well as to the evolution and growth of the telecommunications industry today. INTELSAT, as you know, plays a critical role in that industry.

INTELSAT was created in 1964, in a world very different from today's global community. The world was in great need of improved and expanded communications. Almost all telecommunications entities were regulated government monopolies and commercial or satellite communication did not exist. Today, we see a world where communications have spread so extensively that information flows freely across national borders. Rather than countries communicating, it is individuals, who now have the global electronic marketplace at their fingertips. National and international telecommunications entities are rapidly privatizing. The telecommunications industry has flourished with more competitors offering more services at lower prices to more customers. In addition, digital technology has caused a revolution in satellite communications capabilities. Our satellites can now carry more than 112,000 two-way telephone lines, an almost 500-fold capacity increase over our first generation of spacecraft. However, let's be clear, it is customer demand that is driving the robust growth of the telecommunications marketplace, not the advances of technology alone.

INTELSAT was not only created in the same spirit as the UN, but since its very beginning, has continued to work to advance the UN's mission of lessening the "information gap" around the world. Since 1983, UN staff in many parts of the world has depended on INTELSAT communications to succeed in their important work. INTELSAT capacity is used for UN disaster mitigation, prevention and relief communication services, as well as to support world health programs and peacekeeping missions.

These goals are consistent with INTELSAT's mission: to operate a global satellite system for the provision of advanced telecommunications services, everywhere in the world, on a non-discriminatory basis. We provide a full range of technical, operational, training and financial assistance to many countries, free of charge, for the development of their telecommunications infrastructures. INTELSAT also coordinates fellowships for on-the-job training of engineers and technicians for hands-on experience. INTELSAT has also been involved in a number of regional and international development projects where we provide free-use of satellite capacity to support humanitarian efforts on a global basis. For example, in October 1998, INTELSAT granted free capacity on three satellites to provide live coverage to over 500 million people of TeleFood 98, a program organized by the UN Food and Agriculture Organization (FAO), which aims to raise awareness and encourage global solidarity in the fight against hunger. Another example was INTELSAT's involvement with the UN's UNIFEM videoconference in March 1999, "A World Free of Violence Against Women." INTELSAT has also collaborated with other organizations like the World Bank with its African Virtual University and its InfoDev Year 2000 technical awareness and financial assistance program to developing nations.

What INTELSAT offers is the opportunity for communications operators in all countries to obtain affordable - but unsubsidized - satellite capacity on INTELSAT's global satellite fleet of 19 satellites. The INTELSAT system has an unparalleled availability record of better than 99.995%. While INTELSAT was the first global telecommunications provider, these offerings are now supplemented by the services of many international satellite and cable communications operators around the world. Nevertheless, in an industry whose output - telecommunication services - represents a lifeline connecting individual countries to the world community, the need for the INTELSAT system is still vital to meeting the communication needs of a large number of nations. In fact, more than 60 countries still depend entirely on INTELSAT for their international communications. At the same time, INTELSAT's stakeholders and member countries have recognized the need for significant restructuring or privatization of the Organization, in order to ensure its continued viability as a quality service provider in the telecommunications marketplace, and its ability to meet the changing needs of nations around the globe.

Why privatize? To ensure INTELSAT's future market responsiveness for our customers, to better address emerging market applications and, importantly, to continue our fundamental mission of providing connectivity to all countries of the world. Today, INTELSAT's competitive position is eroding. INTELSAT is faced with larger, better-funded, and more commercially agile competitors in both the regional and global marketplace. If INTELSAT's competitive position continues to erode, then our ability to serve our customers, investors, and, most importantly, those countries that are still dependent upon the
INTELSAT Signatories and Management agree that the best way to guarantee that the Organization can meet the needs of those countries that are still dependent upon the INTELSAT system is by ensuring INTELSAT has the opportunity to compete on a level playing field with its competitors - free from the commercial constraints imposed over thirty years ago in an era in which there was no private competition.

This is absolutely vital for INTELSAT if we are to remain a viable enterprise. To compete and offer the quality service that all countries need requires a fully commercial structure. Moreover, to be able to continue to offer truly global interconnections, which is INTELSAT's greatest competitive advantage and utility, a commercialized INTELSAT has to be acceptable to regulatory and legal bodies in all parts of the world. It is the regulatory bodies who grant the communications landing rights and thereby the market access.

These landing rights are critical for INTELSAT's continuity of service and the viability of future operations. The challenge for INTELSAT members, therefore, lies in creating a "New INTELSAT" that meets these requirements while safeguarding the interests of lifeline connectivities that depend on INTELSAT.

A set of core objectives for New INTELSAT has already been agreed to by INTELSAT's owners. We are now looking at the best way to attain these objectives. For example, we are studying different structural mechanisms that will safeguard INTELSAT's Lifeline Connectivity Obligation without compromising our need to be flexible in the commercial market. Our plan is to submit a single, well-considered model for restructuring to the member governments of INTELSAT in October this year, in Malaysia. We expect to obtain final approval for privatization from our owners and member governments by late 2000.

New INTELSAT could be established by early 2001 - in time for the new enterprise to reap the benefits of the fast-growing commercial satellite communications market. The key is to keep up the international goodwill and momentum for change that has brought INTELSAT this far. I feel quite confident that this will happen. Why? Because privatization will enable INTELSAT to better serve its customers, including the UN, as well as INTELSAT's owners and member governments.