Eutelsat Hopes For Further Collaboration With Tiscali

By | June 4, 2003 | Feature

Tiscali’s [Nuovo Mercato: TIS] and Eutelsat’s partnership to provide one-way broadband services across Europe is likely to extend into the areas of content related services in the future. The deal announced in May (see Interspace 769) could lead to a number of spin-offs for Eutelsat.

Antonio Arcidiacono, director of OPENSKY at Eutelsat, told Interspace: “This agreement with Tiscali should be seen as the first step of a longer-term collaboration. We have considerable experience in broadcasting content to end customers. Tiscali is an access provider but it is also very active in music delivery and other content-based services. Together we will explore new areas for growth.”

The content element is potentially an important aspect of this deal. Eutelsat is working hard on boosting the content by creating the “multimedia kiosk,” a suite of content services available to end users. Arcidiacono outlined Eutelsat’s plans here. “We are looking to deliver content to niche markets that cannot be served by MPEG 2 and will be ideally served by streaming in MPEG 4. We are also working on adding more content to push services, like store-and-forward kind of services with digital rights management. This will be video-on-demand and media-on-demand in general. We are preparing a complete offer of content with mini-bouquets of services that will enhance the basic access offer.”

Other Deals In Pipeline

Arcidiacono also said that Eutelsat expects to wrap up another one or two distribution deals with other ISPs in the next month, boosting its distribution network still further.

The deal, while an important one for Tiscali in terms of extending its reach in Europe, is a vital one for Eutelsat in terms of size. It had previously signed a number of agreements with medium-sized ISPs for selling broadband services through OPENSKY. Tiscali is a much bigger ISP with a reach across 14 European countries.

Arcidiacono commented: “We are both pan-European companies. It is very important for us to have this large ISP with almost 8 million customers. It is the first time that a company which has already built a strong market presence comes with a Europe-wide message saying, ‘Here is a broadband service solution for the 25 per cent of the population that has no chance of getting broadband through terrestrial means’.”

Breaking Through 10,000

The challenge for Eutelsat will be to expand OPENSKY and increase the number of subscribers who are using broadband. The operator is likely to double the number of subscribers this year. It started the year with around 5,000 subscribers. It now has 7,500 subscribers and Arcidiacono expects Eutelsat “to have over 10,000 subscribers by the end of the year.” In fact, in light of the Tiscali announcement, the figure of 10,000 is likely to be on the conservative side.

There are other reasons, as well as the Tiscali deal, for optimism. “There is a common awareness that ADSL will not reach certain areas and people are starting to wake up to this. I think there will be another acceleration as consumers in smaller communities who were expecting to have DSL have now realised this won’t be the case. So they will be more inclined to subscribe to a satellite solution rather than wait for a solution that will never come,” Arcidiacono said.

For Eutelsat, the success of OPENSKY depends on generating future profits. It derives the majority of its revenues (around 80 per cent) from the broadcasting area. It already carries over 1,250 TV channels, so room for growth here is limited. Success with OPENSKY and its broadband initiatives will become an increasingly vital element going forward. Arcidiacono commented: “Multimedia represents an expansion factor. Consider that for consumer access a satellite can accommodate 300,000-400,000 customers or 100,000 for business- to-business applications. This could represent an important growth factor for Europe’s satellite industry. There will be hundreds of thousands of companies which will otherwise not be served by broadband access.”

Eutelsat’s broadband ambitions will be further enhanced by the launch of its e-BIRD satellite later this year. The satellite is optimised for high-speed Internet access. Arcadiacono said: “There is a possibility within two to three years to increase the volume of bits you can convey per transponder for Internet access by at least a factor of two. Furthermore, Eutelsat’s e-BIRD satellite has been tailored for IP applications, so we can have better prices for our service providers and this can be reflected into the market offer.”

–Mark Holmes

(Contact: Vanessa O’Connor, Eutelsat, e:mail: voconnor@eutelsat.fr)

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