Ouranos CEO Plans To Use Aramiska Assets To Make Satellite Broadband Successful In Europe

Ouranos Networks, which has taken over Aramiska’s assets and brand name, aims to target new markets and have a better cost structure in place based on lessons learned from where Aramiska went wrong under the old management.

Ouranos Networks CEO Michel Davoudian believes the company’s new business model, focusing on cutting costs, could see it in much better shape. "We are getting new conditions for satellite segment, which is that we pay only for what we consume," he said. "Before, they had to pay for full capacity even if they were only using part of it."

The operator also hopes to form stronger partnerships with companies as it looks to boost its customer numbers. "We will develop our relationships with value-added distributors like IT companies, because the satellite is also a very good option for failover systems," Davoudian said. "Some companies need to be always connected, even if their DSL is not working. If there is a big fail with fiber, they could be in trouble for a few days. If they take our broadband satellite link, only for emergency purposes, this can be an interesting part of the market. In France, the supermarketsnetwork Intermarche has already taken broadband satellite for emergencies. Not with us, but this is a market we target."

Ouranos already is holding talks with potential partners and wants to offer a range of services to customers. "We are looking for [value-added distributors] and want to find out which ones are the best to serve the customers," Davoudian said. "Ouranos Networks will not only provide satellite links, but we will also provide some additional services. Aramiska started to do this by offering VPN (virtual private network) connections and other interesting features included in the standard packages that improve performance. We will develop more offers so these companies can really have a huge benefit from our offers. So, not only technically, are we better in DVB-RCS (Digital Video Broadcasting-Return Channel Satellite) than the others, but also we will offer on top of this more services."

Capturing Former Customers

The ultimate challenge will be to lead the operator to profitability, and Davoudian is confident that this can take place this year. "We can be profitable with 1,600 to 1,700 customers," he said. "We should get these numbers with the old customers, but even if we don’t match these figures, we actually will with the new customers as we are setting up a new organization with a more efficient distribution team."

The first challenge will be bringing the existing customers back on line, Davoudian said, "There has been lots of press about Aramiska in a short space of time. We took the company within two weeks after it went into bankruptcy. This is a great achievement. Our first work in Ouranos Networks is to give back the links to customers and restore a good image of the service," he said.

A number of satellite operators looked to take Aramiska’s customers by providing a quick transition to their service, but Davoudian believes no lasting damage has been done to Aramiska’s customer base. "The customers we lost for sure are those who can have ADSL now," he said. "When they were shut down, they just looked around for alternative solutions, they took ADSL and that is normal. Those who don’t have ADSL have difficulties in finding alternative solutions. That is why we had to be so fast. In less than 20 days, we had to re-offer the service, and we did it. They cannot get a new satellite with a new provider so fast. And even if they can get it, they will have to pay between 1,000 pounds ($1,744) and 1,500 pounds ($2616) for a new system plus higher monthly fees. On our side, they don’t have to pay anything extra for the service and just have to reboot their system. What I do know is that more than 1,000 customers have alreadyrestarted."

New Markets

These are not the only changes for Ouranos Networks. Previously, the operator looked at markets like the United Kingdom to generate most of its revenues, but now the company will look to enter a number of new markets, particularly in Eastern Europe. In a thinly-veiled swipe at the previous management, Davoudian said, "The U.K. has previously been the main market for Aramiska, and maybe this is one of the errors: remaining focused on a declining market without developing others. There are new markets for us to discover. These markets are for instance in the new EU nations. If you talk about Slovenia, Poland, Hungary etc., all these countries have a huge potential. They do not have the infrastructure. There is still a very long period for us to succeed in these markets," he said.

While these countries may not have the terrestrial infrastructure of some of the western European countries, they could still prove difficult markets to monetize, Patrick French, a satellite analyst at Northern Sky Research (NSR) said., "While there is certainly demand to be had in these countries, the new Aramiska management will need to be wary of exchanging one set of problems for another. NSR’s research has shown that while businesses in Central and Eastern Europe tend to be quite knowledgeable on the advantages and disadvantages of satellite broadband services, they are also very price sensitive and a truly convincing business case must be made for them to sign on for services."

Davoudian admits that the market for satellite broadband in Western Europe is declining due to the extension of terrestrial services, but Ouranos still sees opportunities in the region. "In some other countries like France, we know that more than 5,000 villages will never get ADSL," he said. "So this market is still there, and Ouranos and some of his distributors are working on this project to help the present government to keep his promises."

Davoudian did not fully agree with claims by Aramiska’s forcer CEO, Philippe Bodart that satellite broadband cannot compete in Europe with terrestrial offerings. "Mr Bodart’s reaction was that when the company went bankrupt, he made an offer of 1 euro to the auditors to buy back the company," he said. "That might be why he wanted to show it was worth nothing. I don’t know him personally but what I have understood is that he was very upset to be fired from the company some time ago. I agree with what he is saying regarding the penetration of the ADSL in the U.K. and that the market is not good for satellite broadband, especially if you remain in Western Europe."

French, while expressing caution, also believes there is a future for satellite broadband in Europe. He said, "Even before the news about Aramiska’s troubles broke, NSR had revised downward somewhat its projections for uptake of satellite broadband services in Europe," he said. "Yet, this does not mean that NSR has become pessimistic about market prospects in Europe, to the contrary NSR remains confident that those companies offering the right mix of high value services and competitive pricing will certainly have every chance of succeeding in an admittedly competitive marketplace."

Davoudian also hints at Aramiska being present in the Middle East. "Our main shareholder, Satelnet, is working on the Middle East market and we will extend our services to this market, too."

Contact, Michel Davoudian, Ouranos Networks, tel, 00 32 538 26610; Patrick French, Northern Sky Research, e-mail, [email protected]