Hellas Sat Plans Expansion Into DTH, Residential Broadband Markets

[Satellite News – 07-17-08] Hellas Sat has ambitious plans to attack both the direct-to-home (DTH) and residential broadband arenas, as the Greek national satellite operator looks to transform its business and play a greater role in providing communications and video services to households throughout Greece and Cyprus.
    Hellas Sat, which operates the five-year-old Hellas-Sat 2 spacecraft, could launch DTH services by the end of 2008 if it receives the necessary regulatory approvals from the government.
    “Hellas Sat is the Greek national satellite operator, so we have to have on our satellite, Greek content and Greek programs,” Christodoulos Protopapas, CEO of Hellas Sat, said. “Until now, the legal framework in Greece did not allow the existence of subscriber services from Hellas Sat because our major shareholder is OTE, and they are a public service provider. According to the law here, this meant we were unable to offer services. However, things have changed. There is a new legal framework in place. Hellas Sat has made an application to the national regulators in Greece and Cyprus to offer DTH services. We are talking to many TV content providers and companies to acquire content as well as set-up the technical facilities to offer these services.”
    Protopapas discussed the operator’s plans to diversify the services it offers and Hellas Sat’s role in the region’s TV market with Satellite News.

Satellite News: How big is the potential DTH market?

Protopapas: The market opportunity for us here is potentially very big. Right now, we have only one DTH operator in Greece — Nova. Greece only has a pay-TV penetration of 10 percent to 12 percent. The average pay-TV penetration across Europe is more in the 25 to 30 percent range. There is definite room for expansion in this market. In Greece, we have around 2 million households. We will look to cooperate with platforms already on our satellites, so players like RomTelecom with Dulce (Romania) and Bulsatcom (Bulgaria).

Satellite News: How well do you expect to compete against the established DTH player?

Protopapas: We have the management experience for TV services. I used to be director general of a TV station in the 90s. Many of the senior management at Hellas Sat have the experience to run a DTH operation. Things are now much better from a content point of view. There are many thematic channels in the world, and there is more structured content than before to be offered to the customers and more HDTV linear channels in Europe today available for the Greek market.

Satellite News: What are your plans for high-definition (HD) services?

Protopapas: We will launch HD services straight away. The name of the platform is Hellas Sat HD. This means we are trying to produce HDTV in Greece. The local production of programs will be in HD. We cannot announce any other details about the platform. We have not finalized the contracts with content providers.
    We are also in talks with a number of [set-top box] providers as well as encryption systems providers. We have not come to an agreement as of yet in this area. We are still in the negotiation stage.

Satellite News: Will you be targeting premium subscribers or offering more low-cost services?

Protopapas: We will firstly offer a basic package with a middle price, and then we will offer premium content.

Satellite News: Will launching DTH services create a capacity problem on your satellite?

Protopapas: We have the capacity we need to launch DTH services. There is a shortage of capacity for Hellas-Sat 2, as we have had a lot of commercial success, but there are plans for expansion in terms of a new satellite. We have new shareholders in OTE, so we cannot announce anything until we have communication with them.

Satellite News: How do you view the satellite broadband opportunity in Greece?

Protopapas: We have announced a cooperation with Newtec to use the same technology that is being used in the Astra2Connect service. We will use the same technology in Greece and Cyprus through Hellas Sat. We have this installed and in the next few days we will announce the service in Greece and Cyprus. We will launch this service this summer. This will be a residential service.
    We already have from January 2006 a commercial broadband service for companies in Greece based on DVB-RCS (digital video broadcasting-return channel via satellite). We have had commercial success here, and we have had many installations in Greece compared to other DVB-RCS installations in Europe. The geographical conditions in Greece, where there are many islands small communities and rural areas, means there is strong demand for satellite broadband services in Greece. There are still opportunities for expansion here.

Satellite News: Will Hellas Sat play more of a role in the digital terrestrial television (DTT) market?

Protopapas: We are in contact with channels with national coverage to offer distribution of their programming to DTT headends.

Satellite News: Based on these plans, what are your revenue projections?

Protopapas: In 2008, we will have a small increase in revenues. The satellite is only 80 percent full, so we don’t have much leverage to sell capacity. So this means there are not huge opportunities to grow revenues from capacity only, but both the broadband and TV markets offer us opportunities for growth.