Giuliano Berretta, CEO, Eutelsat

Via Satellite: What is the significance of your S-band joint venture with SES Global?

Berretta: There is some risk, and it is for this reason that we have selected to share the investment of 130 million euros ($169 million) with SES, but I do not believe that there is a great deal of risk. We believe it makes sense to work together, as there is no business logic in developing a satellite with access to only small amounts of bandwidth. To make a service that makes sense, you need a quantity of bandwidth.

The potential for this payload to be used for other services than video to mobiles also substantially mitigates the risk. We believe that applications such as civil security, updating of GPS information and ancillary services to the Galileo system could all be channelled through this type of payload. We are also convinced that the characteristics that are key to the success of XM Radio or Sirius in North America don’t apply in Europe, which has a fragmented linguistic market, strong FM radio and less long-distance road travel. We therefore believe that the S-band payload on W2A could also host radio services but to a more limited vehicle market than in North America.

Via Satellite: What role can satellite play as the demand for mobile video, TV and data services becomes greater?

Berretta: From where we are today, it is quite understandable that video to mobiles using the S-band as a complement to 3G bandwidth makes economic sense. We expect in three years time that there will be a lack of bandwidth in UHF and that a satellite system will be provide valuable new capacity for direct reception in rural areas via handsets provided by terminal manufacturers such as Samsung and for feeding terrestrial transmitters in urban environments. The scenario of equipping handsets for DVB-H and DVB-SH reception is not so different to what has already been experienced in GSMs, which transitioned into triband handsets from monoband first-generation handsets.

Via Satellite: Has the demand for high-definition TV (HDTV) exceeded your expectations, and with no huge sporting event in 2007 to drive demand, how do you expect HD to progress this year?

Berretta: We are firm believers in HDTV but have always been relatively prudent about the speed of takeup. I cannot say HD exceeded our expectations in 2006, but I would say it definitely met our expectations. At the end of 2006 there were already 17 HD channels from Western and Eastern Europe broadcasting through our satellites. Paying subscribers to HD channels across Europe numbered a few hundred thousand by the end of 2006.

There are three elements that need to come together for HD to achieve its potential. First, there is still a big effort required in Europe to educate consumers on HD-ready and full-HD displays and to reassure them on the standards debate on HD DVDs, which looks similar to the VHS/Betamax battle in the early 1980s. Second, broadcasters need to grow and market their content. And third, the set-top boxes have to be available and aggressively priced. Once these elements have fully come together I think the HDTV market will be ignited. In 2006, the World Cup was a great platform for compelling HD content but there were not enough decoders to ignite the market. We are confident HD has a bright future and forecast that up to 12 transponders across our fleet will be broadcasting HD channels by June 2009.

Via Satellite: What is the significance of your S-band joint venture with SES Global?

Via Satellite: What role can satellite play as the demand for mobile video, TV and data services becomes greater?

Via Satellite: Has the demand for high-definition TV (HDTV) exceeded your expectations, and with no huge sporting event in 2007 to drive demand, how do you expect HD to progress this year?

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