SES Astra CEO Hails DPC Deal

By | July 12, 2004 | Feature

SES Astra CEO Ferdinand Kayser believes the company’s acquisition of German pay-TV operator Premiere’s Digital Playout Center (DPC) could offer a blueprint beyond Germany, particularly in Eastern Europe. DPC operates a teleport facility in Munich, offering such services as play-out, multiplexing, encryption and satellite uplinks to private and public broadcasters. The acquisition of a 75.2-percent stake in DPC for $50.6 million was announced in late June.

SES Astra intends to be Germany’s first and only “open” pay-TV platform using Premiere-compatible digital set-top boxes (STBs). Kayser told Satellite News the operator could look beyond Germany to create such platforms. He said, “DPC will play an important role. It is also a model that can be exported into other territories. It is not a pure German play.”

Kayser believes the purchase of DPC was significant for SES Astra, saying, “The significance of that deal from our perspective is that we extend our position in the value chain, to not just being an infrastructure provider but being also a technical platform operator and offering technical services to the market. We will reposition DPC as neutral, non-discriminatory open platform in the German market.”

New Way

The deal could encourage a number of broadcasters to take more of a role in the German digital television market. Kayser commented, “It would be, in fact, the first really open digital platform worldwide. It is open because various operators will be in a position to get access to the conditional-access (CA) services and offer paid packages being received by the subscribers who have bought a STB, with the same smart card enabled to receive pay packages from various operators. It is really a completely new way to develop digital TV in the most important European TV market.”

Kayser believes the fact that SES Astra is the majority owner of DPC, and not Premiere, will act as a positive stimulus to the market. He comments, “Premiere also realized that other potential pay-TV operators were somewhat reluctant to deal with Premiere on the CA services because they would be directly competing on the content level. With SES Astra, it is very clear. We will never be active in the content business, and we will never have the ambition to have a relationship with the end consumer.”

He continued, “We are recognized in the German market as the neutral operator. We will be able to drive the market of digital TV and push the penetration of digital homes more than anyone else. And Premiere will benefit from this, because they will able to sell Premiere subscriptions to an increasing number of digitally equipped satellite homes.”

Poland ISP Deal Imminent

In other recent deals, SES Astra has partnered with Spanish ISP Ya.com to develop the broadband satellite market in Spain. The pact further cement’s SES Astra’s position in Spain, and Kayser admitted that another satellite broadband deal also is imminent. “There is one important deal in the pipeline in Poland but I would not like to mention the name of the customer before the ink of the contract is dry. But, it is a matter of weeks,” he said. “There are more deals in the pipeline. We are really making good progress here.”

With broadband penetration increasing rapidly across Europe, it remains a key area for satellite operators to boost revenues. However, it will take time.

“Broadband in Europe continues to be a challenge. We continue to make a distinction between one-way and two-way. The two-way B2B (business-to-business) market is continuing to grow, but not necessarily in line with our expectation. I remain, however, convinced that there is a market for two-way B2B,” Kayser said. “The two-way residential market is not yet perceivable on the horizon because terminals are still too expensive. U.S. operators launched projects, which should lead to terminal prices of between $250 and $300. That will also be an interesting business over here in Europe when we reach that price point.”

While it looks to develop its business models in the broadband and broadcast arena, the operator hopes a market recovery will spur revenue growth in the near future. In terms of the main challenges facing the operator, Kayser commented, “Over the next six to nine months, the interesting challenge will be to generate double-digit growth, and we are very confident that this will be possible. That is our main objective.”

In terms of the company’s capital-expenditure plans during the next months, Kayser said, “We are on track with ASTRA 1KR and ASTRA 1L. These are the first ASTRA satellites procured from Lockheed Martin [LMT], and they are absolutely on track. Besides these, there is nothing really in the pipeline. We are working on the next replacement satellites but there will be nothing decided for at least one year.”

The FSS industry also has seen a number of interesting recent developments with private-equity firms doing deals to acquire stakes in operators such as New Skies Satellites [NSK] and PanAmSat [SPOT]. Kayser said of the recent changes, “I know from our shareholders that they are happy to be shareholders, and that there are no major changes in the shareholder structure in the making. But the industry has really changed, and now there is a new picture. We will be in the best possible position to develop our activities with what I would like to call industrial and strategic shareholders at SES Global.”

–Mark Holmes

Contact, Yves Feltes, SES Astra, e-mail: yves.feltes@ses-astra.com.

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