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Europe Online Offers More Than Internet Access Via Satellite

By | July 17, 2002

      In recent months, there has been a raft of companies introducing low-cost Internet by satellite services to capitalise on the slow deployment of digital subscriber line (DSL) service across Europe. Major service providers such as British Telecom and Xantic, as well as smaller providers, have resorted to using hybrid satellite/terrestrial technology to target the consumer and enterprise markets.

      Unlike its competitors, Europe Online is more than a satellite Internet service provider. The company, which describes itself as an interactive broadband entertainment provider, tries to tap into the streaming and multicasting capabilities of satellites, as well as their Internet access capability. For example, Europe Online is one of the few service providers to offer a range of 1 Mbps streaming channels via satellite.

      Streaming data is sensitive to packet loss. Satellites are well suited for providing streaming as the packet loss on satellite networks is low due to the high level of error correction built into data transmission by satellite. Europe Online subscribers have access to a library of 10,000 software, videos, games and music files that are multicast to subscribers’ PCs at 2 Mbps.

      Launched in 1999, Europe Online has gone through some management turmoil and changes in direction. Founded by current CEO Candace Johnson, the company’s target market is the direct-to-home (DTH) subscriber base on the Astra platform at 19.2 degrees East Longitude. With three transponders leased at this orbital location, services are available in the countries covered by the footprints of Astras 1F, 1G and 1H transmitting on transponders 103, 113 and 115. All services can be accessed from one of three transponders.

      According to Europe Online Marketing Manager Bektas Bingoel, “When we first launched back in 1999 we offered unlimited Internet access at a flat rate. However, we found that the system response became poor and the management, under the then CEO John Morris, decided to stop offering Internet access and instead concentrated on the streaming and downloading services. This was a mistake. We’ve found that the first thing that users want is surfing. So the Internet access service was re-introduced and improved.”

      In order to improve transponder bandwidth management, Europe Online now use software from Germany’s Plenexis. Based on the experiences of several other satellite Internet service providers, Europe Online decided to introduce fixed-service packages that limit online time. Known as Skybooster, this offers Internet surfing at speeds of up to 768 Kbps. “Subscribers pay 9.90 euros ($9.94) for our basic service which includes Internet access with online time charged at 3.9 cents per minute. Alternatively, subscribers can pay 24.90 euros ($25) for 10 hours online or 39.90 euros ($40) for 20 hours online. In addition, access to the streaming and downloading centres are included in these prices,” Bingoel said.

      Europe Online subscribers are typically male in the 30 to 40 age bracket. The majority of subscribers are from Germany and increasingly from eastern European countries such as Ukraine and Russia. The company plans to launch marketing campaigns in the United Kingdom and France in the near future. However, subscribers in the United Kingdom will need a dual dish pointed at 19.2 degrees and 28.2 degrees East if they want to watch Sky programmes and access Europe Online.

      Europe Online has around 52,000 subscribers and the subscriber base is growing at a rate of 3,000 per month. According to Bingoel, this has been achieved with very little marketing outlay. “In the German market, our major reseller is the PCI card manufacturer Technisat. Technisat has over 24,000 resellers in Germany and about 8,000 of these sell Europe Online. We have 10 other resellers in eastern Europe. Subscribers can also use PCI cards from Happauge, but unlike Technisat, they are not a major reseller of our services. We offer the Technisat PCI card at a subsidised price of 59 euros ($59.2). We also offer a USB box from Happauge for 255 euros ($256), but this is not subsidised.”

      In addition to Internet access, subscribers get access to five streaming channels and a download centre, which are included in the package. The main categories are software, videos and games, with software downloads being the most popular type of download. Files are multicast off-line free of charge, although there may be a small charge for some types of files such as the videos. Likewise, most of the streaming channels are free except for the adult entertainment channel and the MTV live stream, which cost 45 euros ($45.2) per month and 2 euros per month respectively. According to Bingoel, the adult entertainment channel is the most popular streaming channel. While broadband operators – terrestrial or satellite – find it challenging to get subscribers to pay for streamed content, it seems that subscribers are indeed prepared to pay for some types of premium content. Although primarily consumer focused, Europe Online is also targeting some business-to-business markets where it believes it can leverage its digital broadband platform and is working to offer its services via cable.

      Very few operators, if any, have been able to hit on a profitable business model for delivering Internet and multimedia services by satellite. Europe Online claims that it is “near break-even.” But the company has been experimenting for several years to find out what customers really want, and more importantly, what they are prepared to pay for. Transponder lease rates from SES-Astra are among the highest in the world and therefore it is essential for a company such as Europe Online to leverage its broadband platform by developing new applications that use the advantages of satellite transmission. One such example is the recently announced joint venture with Celimage (a joint venture between Celartem Technology Inc. of Japan, a software developer for electronic imaging, and Scala Spa of Italy, owner of European museum archives). The Celimage service will enable publishers to download high-resolution, multi-megabyte images via satellite for reproduction from a digital picture archive and electronic distribution centre based at the Europe Online premises in Luxembourg.

      –Gareth Owen

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