Latest News Targets 10,000 Broadband Subscribers

By | June 14, 2004 Internet Factory’s CEO believes his company’s foray into the satellite broadband market in Spain is crucial if it wants to put pressure on rival Telefonica in its home market. The ISP, owned by T-Online International (a subsidiary of Deutsche Telekom), this month is launching Yacom Satelite, a new broadband access service targeting five million Spanish people who cannot access ADSL. The operator teamed with SES Astra to offer the service, which also will include 120 television channels on the computer screen.

      The new service is one of the most intriguing satellite broadband offers in Europe. Guillermo Mercadar, CEO of, told Satellite News in an exclusive interview he believes there is a strong market for the service in Spain. He said, “We can see that around 15 to 20 percent of the total population in Spain is not able to use ADSL because of coverage. This translates into a figure of between 5 million and 7 million people. We are really busy in terms of looking to provide a service to these people. Our aim is to reach more than 10,000 customers by the end of this year, which is not very much but, it is challenging in terms of the customer we are now addressing.”

      Vital Role

      The role of SES Astra is vital in the rollout of the service. The service will be distributed through ASTRA satellites. In Spain, 10 percent of homes receive Astra digital TV, and another three million homes with a communal antenna receive Astra-delivered TV services.

      In terms of why they chose Astra, Mercadar commented, “We partnered with Astra because we wanted to team up with proven partners that are big players in their respective areas. We are not really a company that does business on satellite, so we decided to team up with a company that we understood would be a good one to partner with for the future, both technically, but also with their expertise in the Spanish arena through the job they have done with Sogecable and the rest.”

      “Aggressive Marketing”

      The service will provide speeds between 256 Kbps and 768 Kbps, depending on the offer chosen. The service includes 10 e-mail accounts of 50 MB of space and 1 e-mail account of 100 MB as well as anti-virus and anti-spam services.

      While’s main focus will continue to be on the ADSL market in Spain, Mercadar believes it is vital for the operator to have a nationwide footprint. He comments, “We are going to be really aggressive in terms of marketing broadband. We believe it is a market for the future. We want to be one of the top three players in terms of market share [and] revenues in the overall Spanish broadband market. We are already the Number Three player but we want to grow beyond that. Satellite is part of our approach to the market.”

      In terms of expectations for the service, the operator would be happy with 10,000 satellite broadband subscribers by the end of the year. Mercadar told Satellite News that, at the very least, the operator would hope to have 20,000 subscribers by the end of next year.

      In terms of capital expenditure and when the service will break even, Mercadar said, “We are subsidizing the service at the beginning, but we hope we get benefits within about six months because we are promoting these services aggressively. There are a number of promotions.”

      He continued, “In terms of capital expenditure, our main focus is still on ADSL. As we are looking to rollout services to the country on a 100 percent basis, satellite will be a focus. We hope to break even as early as next year with the satellite broadband service.”

      The “Banda Ancha Sat Home (Broadband Sat Home)” package will be priced at $20.80 euros a month. According to this is slightly less than the current prices for these types of services, and it also is less than current ADSL charges.

      TV Channels

      One of the intriguing elements of the service is that the operator plans to bundle 120 TV channels with the service. Here the operator seems to be competing more with the cable operators that already effectively bundle TV and broadband services.

      Mercadar is not sure how important the channels will be in terms of persuading consumers to take up the service. He commented, “As we are an ISP doing business in Spain, content will be a part of our offers for the future, either bundled with data or voice. It is clear that the triple- play model is the future. There are cable players already doing it. As we are an ISP, we also give access to TV channels, which is a value-added service we are putting on top of this, which I believe may put more total value on the offer to the consumer. I don’t know if it is going to be the driver for gaining the customer but everything goes together so it is about bundling to the customer.”

      The challenge will be to establish the broadband service during the next few months. One of the other key factors for launching the service will be the ability to sell other services to consumers, like e-commerce.

      In terms of how the Spanish broadband market will develop, Mercadar said, “We think the next two or three years will be intense in terms of broadband competition in Spain. We need to be really flexible, innovative and tough. Telefonica is the main player in the Internet access arena. We will be strong competitors. We would like to gain benefits from the fact there are already a number of satellite pay-TV subscribers.”

      –Mark Holmes

      (Beatriz Valverde,,; Yves Feltes, SES Astra, 00 352 710 725 311)

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