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Newtec May Look More for Commercial Acquisitions

By | September 19, 2007

      Belgian satellite solutions provider Newtec is revamping its management structure to better deal with the needs of customers and may also look to make more commercially minded acquisitions, the company’s CEO said.

      "We are now in the phase of major change, major growth,”Serge Van Herck, Newtec’s CEO told     Satellite News. "We are looking to bring new products and solutions. We are changing the management structure in order to cope with growth. We are integrating all the products and we want to really realize the potential.”

      Newtec provides products and solutions such as digital video broadcasting modulators, digital TV and radio distribution networks, interactive TV networks, and IP broadband access networks. Newtec has made a number of acquisitions to boost its competitive position, acquiring companies such as German software development company Tellitec and most recently French company TurboConcept, a provider of Intellectual Property cores used in satellite and wireless communications.

      As part of the restructuring, Newtec will bring all its capabilities under one roof. “When you look to what we have done previously, it was a mix of companies, and there was limited coordination between them,”Van Herck said. "They each had their own strategy, their own vision and own niche. With a global strategy and structure we want to unlock the value to our customers of creating better integrated products.”

      Van Herck believes Newtec is only scratching the surface in terms of its growth potential. "If you look at the technology we have we know that we can realize much more,”he said. "The restructure we are doing will see an integration of our sales channels. We will now have one sales organization. We expect to see some major organic growth over the next few years, but definitely we will be looking at other opportunities in the market, because we are seeing a lot of fragmentation in the market. There are a lot of smaller companies still in this market, and there is no doubt, we will see consolidation.”

      As Newtec looks for more acquisitions, the company could focus on more commercially minded properties, which would mean a significant shift for Newtec, Van Herck said.

      "We would be looking at companies in some established markets with some established revenues,”he said. "So we won’t necessarily be looking for companies in terms of technology but in terms of the customer base they can bring. This would be a significant evolution of the company if we were to make commercial acquisitions. Newtec has always been seen as a strong engineering company. We want now to add more marketing and sales focus. If we want to get increased market shares, we will need this focus.”

      Future acquisitions also would be judged on their ability to help Newtec expand its business internationally. While the company’s home markets are likely to remain Europe, Middle East and Africa, Van Herck believes there could be strong demand for the company’s products and solutions in North America. "We are particularly looking at the U.S. market at the moment,”he said. "We want to get a bigger piece of the cake over there. We believe we need to also further increase our presence in Asia. In terms of the U.S., we are now increasing our sales and marketing capabilities.”

      New Technology

      Newtec recently announced it had signed a cooperation agreement with SES Astra to test and demonstrate a managed satellite distribution system to deliver television content in terrestrial and mobile TV networks. The demonstration system will deliver several mobile TV channels from Betzdorf, Luxembourg, to a number of remote and unmanned terrestrial transmission sites in a way that is fully compatible with single frequency networks.

       The system will be operated on the Astra2Connect platform, the satellite broadband access system operated by SES Astra and based on Newtec’s Sat3Play product. Each remote site will be equipped with an interactive Sat3Play terminal, allowing the remote management and control of the equipment of the transmission sites.

      "Newtec has developed Horizon, a product to be installed in the transmission towers,”Van Herck said. "It consists in a compact unit that integrates all the functions to receive the national and regional content from the satellite and retransmit it terrestrially. We developed this product based on our experience with terrestrial television, and we expect it to play a major role in the deployment of mobile and terrestrial TV networks in Europe and beyond.”

      Newtec also has high hopes for its Sat3Play solution, a product launched in 2006 that allows the bundling of data, voice and video services over a single satellite broadband connection. The success of Sat3Play will be a key barometer for Newtec, Van Herck said.

      "In the next 12 months, one of our biggest question marks will be to see how successful SES Astra will be with our satellite triple-play solution,”he said. "We also expect important growth in the professional equipment business line, which includes our broadcasting and satellite modem products. We believe we can further increase our presence in the broadcasting market quite successfully. We have a strong presence in the DVB-T (digital video broadcasting-terrestrial) market and believe we will be able to achieve the same for the mobile TV market. There are big opportunities for us here. We have to include different standards in our equipment so they are able to support any mobile TV standard. That will also be a big engine for growth.”

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