AVC Expects 80,000+ Subscribers in 2004

AVC hopes its nationwide consumer satellite broadband service, AVC Broadband, will gain upwards of 80,000 subscribers in its first year of operation in the UK. AVC is launching the service in January 2004 in partnership with SES Astra and aims to tap into the 29 percent of UK households who do not have access to terrestrial broadband services.

Paul Harris, managing director of AVC Wireless Networks, told SATELLITE NEWS that one of the areas where the operator expects to gain a competitive advantage is by offering a higher quality of service. “I think the reason why they will come to us is that we want to make it as easy as possible for them to attain it. Once they have got the service, we want to make it and develop it into a service whereby they will be able to have everything that they want, similar to what they can get from a BT or AOL [NYSE: AOL]. We want to create an ISP where you get free anti-virus checks, free software download updates, etc.”

The high-speed package will offer download speeds in excess of 512 Kbps. There will be an initial installation and set-up charge, which covers the provision of a dish, cabling and satellite modem. One of the unique advantages of AVC’s offer is the service will use the householder’s existing standard digital satellite TV mini-dish. AVC actually installs 200,000 systems for BSkyB each year so it has plenty of experience of being able to install the mini-dish in a discrete location. Harris would not disclose price points, although he did tell SATELLITE NEWS that the service would cost less than GBP40 ($67.2) a month in terms of subscription charges.

“The deal itself as far as we are concerned is an excellent opportunity for everybody who can’t gain access through terrestrial services,” Harris said. “The significant advantage we see from working with Astra, apart from them being the largest satellite provider, is that they have agreed to transmit the bandwidth from 28.2 degrees East Longitude, which means for the end user, they can now obtain a broadband service regardless of where they live in the UK, with the added advantage that it can be received through the mini-dish in the same way as the UK digital satellite service,” he added.

January 2004 Launch

The broadband service will be aggressively launched in January. One of the main challenges will be to overcome any negative perceptions that satellite broadband has in the marketplace. Harris said: “We have put together what we consider quite an aggressive marketing campaign in terms of how we want to demonstrate the system. We are going to have mobile demonstration units, which can go on tour for people who want to see it. We also consider one of the best ways is to be able to give people a mock-up of what it is like, via a CD. It will give them a feel of what satellite broadband is like.

He continued: “I think a lot of people’s perception of broadband is probably due to the fact they have not experienced it. Once you have experienced it, particular when you download movies or music, it really is very quick. The perception is that it is slow. We want to encourage people to use word of mouth.”

Eurobond

In a separate announcement, SES Astra’s parent SES Global [Luxembourg: SESG] has announced that it has launched a five-year, 500 million euros ($572 million) benchmark Eurobond. The bookrunners were Citigroup, Deutsche Bank, Dresdner Kleinwort Wasserstein and Société Générale. SES made the announcement on Nov. 5.

Jurgen Schulte, SES Global’s CFO, commented: “This transaction establishes SES Global in the European public debt capital markets. It follows our recent $1 billion private placement in the U.S. markets and completes the refinancing of the group. The maturity profile of our debt has been optimized to meet existing funding needs and provide us with the flexibility to continue our development.” –Mark Holmes

(Paul Harris, AVC Wireless Networks, e-mail: [email protected] )