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Giuliano Berretta Chairman and CEO Eutelsat Communications

By Staff Writer | October 1, 2009

Giuliano Berretta will step down as CEO of Eutelsat in November, turning over leadership of the FSS operator to Michel de Rosen.Berretta, who will continue as chairman, discusses the issues facing Eutelsat, the growth potential in markets such as broadband and HD, and some of the challenges that de Rosen may face as CEO.

VIA SATELLITE: How do you view the HD landscape in Europe?

Berretta: There is a clearly a growing appetite for getting the best quality viewing experience from new-generation flat screens, and this applies both to high-definition and standard digital broadcasts. The number of HDTV channels broadcasting through Eutelsat satellites has risen over the last 12 months to 86 from 49. … It is difficult to anticipate what the growth will be over the next year, but we would hope for a similar growth to what we have seen in the last financial year. We are seeing more and more operators moving in this direction.
 

VIA SATELLITE: What are the prospects for 3-D HD?

Berretta: We see this as a strong future market and have been building up experience and developing partnerships on 3-D for the last 18 months. Since the beginning of 2009 we have moved into a phase of active demonstrations of the 3-D transmission chain, from filming to live viewing. We have also opened a permanent 3-D satellite channel at our 9 degrees East neighborhood.

We subscribe to the opinion that there will be two types of 3-D market and that we have a role to play in both. The first, which we are already seeing, is the out-of-home experience of 3-D viewing of films, concerts and sports events in public locations, cinemas and theaters. The second stereoscopic market will be direct to home, which is developing but will enter the market after out of-home and obviously necessitates consumer investment in new TV sets.
 

VIA SATELLITE: How optimistic are you that the satellite sector will be able to capture revenues from the European Union Economic Recovery Plan?

Berretta: As chairman until this summer of the European Satellite Operators Association (ESOA), I spent a lot of my energy together with members on convincing the European Commission to recognize that user satellite terminals form part of communications infrastructure, rendering them eligible for subsidies. This is a key step that will help to relieve equipment acquisition costs by consumers. We explained to the Commission that satellite operators have already shown their commitment through significant investments in infrastructure, but user terminals, which are a vital part of infrastructure, need to benefit from funding to ease their deployment.
 

VIA SATELLITE: Is there a risk that Eutelsat could be impacted by consolidation of platforms in Eastern Europe?

Berretta: Our commitment to Central and Eastern Europe dates back over 10 years during which we have put considerable effort and investment into developing video neighborhoods with strong regional coverage and assembling an attractive channel line-up. … The experience we have seen of consolidation in other markets, such as Italy suggest that a single platform continues to add channels and services to capture and retain subscribers and drive up ARPU. We also expect these markets to increase locally-produced content and to ramp up HD channels, thereby continuing to drive bandwidth demand.
 

VIA SATELLITE: Do you have more plans to extend your presence in Africa?

Berretta: Africa, along with Europe and the Middle East is a core part of our overall footprint and well served by our range of orbital slots which provide strong coverage and interconnectivity with other regions of the world. The first step of our ongoing expansion in Africa came earlier this year with the W2A satellite which has fortified our C-band offer and increased capacity in Ku-band for professional video, data and broadband services. C-band take-up has been particularly exceptional for telecommunications and data networks in particular. Our next step will be the launch of W7 to support the expansion of pay-TV platforms, including the DSTV platform operated by our anchor client MultiChoice Africa. Future satellites will also incorporate reach over Africa.
 

VIA SATELLITE: Would you be interested in ProtoStar’s assets?

Berretta: Whereas we are pursuing a path of strong organic growth, our radar is always open to opportunities for external growth which complement our existing assets and can be converted into high profitability. Managing spectrum and orbital slots is a core part of our activity so integrating further spacecraft into our fleet would not be an obstacle.
 

VIA SATELLITE: Do the rules on paper satellites need to be tightened up?

Berretta: As more and more orbital slots are occupied it is clearly a necessity for the ITU to address how they are managed, so we welcome moves for improved efficiency of the geostationary orbit. We also believe operators will need to exploit the opportunity of entering into new frequency bands. In Eutelsat’s case we are actively entering new bands with our investment in an all-Ka-band satellite for new-generation applications, leaving much more space in the Ku-band for broadcasting.
 

VIA SATELLITE: Are you confident that there will be demand for Ka-Sat capacity?

Berretta: In the build-up to Ka-Sat, which will be launched at the end of 2010, we are using Ka-band capacity on Hot Bird 6 and Ku-band capacity on Eurobird 3 to develop the market and build relationships with service providers across Europe, which include telcos, ISPs, retailers and specialist satellite service providers. This is an important phase for building awareness of our Tooway product and preparing the ground for the mass-market scale that will come with Ka-Sat. With this progressive approach we aim to be generating 100 million euros ($143 million) of revenues from this satellite by the fiscal year 2013-2014.
 

VIA SATELLITE: How has the credit crunch impacted Eutelsat’s business?

Berretta: Whereas the broadcasting industry has come under pressure from reduced advertising income, pay-TV clients across our main markets in Europe and Africa have continued to ramp up and diversify their offer of channels and services. … Our main challenge has actually been to increase capacity as quickly and as efficiently as possible. At the end of the first half of our financial year we were operating with a fill factor of 97 percent, which by definition impacted on our scope for flexibility. With the launches of Hot Bird 9, Hot Bird 10 and W2A and the subsequent redeployment of five satellites already in-orbit, our fill rate by the end of June was down to a more reasonable 88 percent. This gives us more headroom for maneuvering and takes us closer to our preferred fill factor in the range of 80 percent.
 

VIA SATELLITE: Have your capital expenditure plans changed as a result?

Berretta: Our conviction is that we should maintain investment in order to be in a strong position to capture market opportunities as the economy improves. We consequently see no reason to change our capital expenditure plans and are holding steady to our current active policy, with capital expenditure averaging 450 million euros ($643.7 million) a year for the period June 2009 to June 2012.