Eutelsat’s de Rosen Follows CASBAA Keynote Speech with Major Asian Move

[Satellite News 06-25-12] Eutelsat’s presence at the CASBAA Satellite Industry Forum in Singapore proved to be a prelude to a daring regional move the operator would announce later in the week.

   Eutelsat CEO Michel de Rosen used the event as an opportunity to blueprint the operator’s plans for the Asia and Latin America regions while discussing the impact of an Anatel auction it won earlier in the year to secure a Brazilian orbital slot. De Rosen then followed that opportunity a day later with the acquisition of the GE-23 satellite, associated customer contracts and orbital rights from GE Capital for $228 million.
   The GE-23 transaction, a cornerstone in the operator’s strategy to better position itself in high growth regions, is expected to close later this year.
   During the CASBAA keynote speech, de Rosen called Asia and Latin America, the two most dynamic regions in the world for satellite communications. “Our company has grown through organic growth. This will be the main focus of our efforts, but if we can add some strategic inorganic initiatives, we may well do that as well.” he said. “We already have a presence in Asia, even though it is not very large. Asia’s terrestrial infrastructure is incomplete, but will get bigger. Pay-TV, broadband, maritime are sectors that are all growing in the region and we want to expand our client base in these markets. We want to offer both broadband and HD in Asia.”
   The GE-23 satellite was launched in December 2005 to its geostationary orbit at 172 degrees East. The satellite offers coverage over the Asia-Pacific region via a payload of 20 Ku-band transponders accessing five interconnecting beams and 18 C-band transponders connected to a trans-Pacific beam.
   Natixis Securities Satellite Equity Analyst Eric Beaudet said the acquisition made a lot of sense for Eutelsat. “We see this acquisition as very positive,” he wrote in a recent research note. “From a financial standpoint, it is accretive from year one by around 4 percent in our EPS estimates. But, more importantly, the acquisition gives the group access to the fast-growing Asian market via this satellite, but also through new orbital frequencies that are not yet exploited. The acquisition also enables the group to offer new capacity for the U.S. government, one of the reasons that led management to issue a profit warning at its most recent earnings report. All told, while this is not a transforming acquisition, it should be well received by the market and could change the negative momentum on the share since the most recent earnings report.”
   Eutelsat’s mail European rival SES also announced a slew of capacity deals in the region last week. The most significant of which was a new multi-year capacity deal it signed with Telikom Papua New Guinea (Telikom PNG), the country’s incumbent telecommunications operator. Telikom PNG currently contracts more than 100 MHz in capacity with SES. The operator also signed a new multi-year agreement with one of its largest customers in the Philippines, MediaScape, to provide additional capacity on the SES-7 satellite at the 108.2 degrees East orbital slot.
   The theme that would follow throughout the week of the CASBAA and CommunicAsia events was that 2012 is a good year to expand business in the Asian market. Like Latin America, one of the pertinent questions for Asia is whether or not there is enough capacity to meet demand.           
   End-users that were present at the CASBAA event, such as Telstra International Manager Richard Ward, vented their frustrations at a lack of capacity. “There is not enough capacity out there. We are working with satellite operators to identify satellite capacity pre-launch. This is not something we have done before.”
   Astro Director of Technology David Thomas added that his company, a Malaysian DTH operator, also sees the acquisition of acquiring capacity as its biggest challenge. “The way we have been moving forward is we try and pace the number of channels that we launch,” said Thomas. “You have to accept the reality of the situation. We will be getting more capacity, but that will get chewed up very quickly.”
   Broadcasters such as BBC Worldwide Channels Senior Manager of Technical Operations Ang Soo Khoon also see a lack of capacity. “There is a constraint of capacity on DTH platforms. There are satellites carrying more than one DTH platform. There is very little back-up capacity available.”

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