[Satellite News 09-12-11] Solaris Mobile has launched EUR Radio – a new, free, pan-European digital satellite radio demonstration platform, which will serve the European Union region. Solaris Mobile announced the initiative today at IBC. The aim is to show the benefits of the platform to radio broadcasters, a potential target for the company.

   Solaris, a joint venture between Eutelsat and SES, has been under the microscope in recent months. SES and Eutelsat are still carrying out a search for a new investor/commercial partner for the business; however, with a successful conclusion to this out of reach, its future is still open to debate. Solaris Mobile CEO, Steve Maine is still confident that Solaris Mobile will be able to build a second satellite, although he admits it has been a challenging time, as the company looks to build this business in difficult market conditions.

 

Maine: Yes, it is true we are engaged in intensive discussions. We are operating in very interesting territory. If you think about what we are, we have spectrum that covers the whole of the European Union. The spectrum sits just above 2 GHz and right next door to the UMTS band. We have a market opportunity that covers enhanced broadcast applications. You have digital radio on the one hand, and the offer of enhanced mobile broadband services on the other. The migration from analog to digital in terms of radio itself alone presents huge commercial opportunities. There are industrial pressures to do the same thing with radio as what we have seen with TV. We have radio spectrum to be deployed with both satellite and terrestrial infrastructure, which means we can deliver a very cost-effective distribution network for digital radio. If you look at the dynamics of the radio market, we are sitting right in the heart of a development that has got legs all of its own.

   If you then look at the mobile broadband market, you look at the launch of the new devices, smart phones and tablet devices, etc., there is increasing customer interest in engaging in video rich communication activities. If you look at the impact that it is having on existing mobile networks and those dynamics, and if you look at our spectrum and resources, we believe we can create service offerings that can be launched directly into those market dynamics as well.

   Solaris Mobile and its shareholders are currently in discussions with several potential partners to define an industrial plan for deployment of the Solaris Mobile S-band spectrum, with a focus on the complementary ground infrastructure as well as consideration of a follow-on S-band payload. The project and the partner search are proceeding, we are in intense discussions, and they have not been completed.

 

Maine: We clearly would benefit enormously. Solaris Mobile and its shareholders have taken the time necessary to conduct thorough negotiations.

The reality is the market is moving around us so very quickly. It is one of the issues. We also have difficult economic conditions for trying to deal with very substantial investments to drive the business forward and our entry into these marketplaces.

 

Maine: There are a number of prospects that we are still examining. We have seen a string of very good opportunities. We have been more active with some than others. We have been dogged in pursuing them. In the meantime, we also have operational activity to deal with. We have a customer. We hope to have another customer soon. People will focus on the big stuff, but there is operational activity that we need to attend to. We have services to launch, and marketing programs to implement. You need to be careful not to think of Solaris Mobile just as a new project looking for investors. We are in business with service offerings and assets. We need to deal with the fact of a new satellite, as well as a tremendous investment in terrestrial wireless infrastructure as well. We have a number of balls up in the air.

 

Maine: Solaris Mobile is currently concentrating on the provision of services using the W2A satellite and will continue in its planning process for the design and build of a new satellite. A lot of work has been done on the specification of the second satellite and we are still analyzing the options. The design of a new satellite will incorporate the most up to date technology and will have to meet the evolving needs of the market. The real issue is that if you look at the bigger picture and the alliances and the bigger deals that we are trying to do, they all have discrete market focuses. Depending on the type of commercial relationships we develop, [that] could determine the specification of the satellite. Therefore, we are liaising directly with potential customers to try to match the performance of that new capacity more precisely to their communications needs. Therefore, we have not yet reached a stage where we think it would be right to place that satellite contract.

 

Maine: The deadline is fast approaching.

 

Maine: I don’t envisage circumstances where the next satellite is not procured. The issue is what kind of partner structure we have in place at the time, and how much comfort we have in terms of contracts. At one end of the scale, we could have a very easy decision to take, because we will have a lot of pre-commitments to use these services. On the other end of the scale, we could have a very difficult decision because we have low levels of pre-commitment. But, under any of the circumstances that we are looking at, I cannot see a possibility of us not ordering that satellite.

 

Maine: Concluding one part is not necessarily completely linked to the other. I think the options we were looking at six months ago for investment are no longer in the centre of our field of view. Sometimes you talk to the same players about different propositions. Sometimes, the players changed. Then you find someone you talked to 12 months ago comes back. This is an incredibly fluid situation.

 

Maine: It is a demonstration platform, to be used initially for marketing purposes and is the premise for potential commercial services further down the line. The platform provides listeners across the EU with a bouquet of radio channels, both public and private, covering the majority of European languages encompassing genres such as popular music, general entertainment, news and sport along with rich media and interactive entertainment capabilities. We are in discussions with a number of other groups of radio channel operators. To support that activity, we are promoting our capabilities to other radio players across Europe. The creation of EUR Radio is part of this marketing activity. It is a platform that will have a number of radio channels on it. It will cover language groupings all across Europe, and it will mean that we can demonstrate the benefits of the technology to radio players. We don’t anticipate that EUR Radio will become revenue earning itself in the short term but will be a catalyst for concluding commercial contracts with other players.

   In addition to this, we have announced a recent deal with an Italian media group, Class Editori which is our first commercial contract. They publish magazines and newspapers, but they are keen to expand their radio services. The initial phase of the roll-out will commence in October 2011 with the deployment of a hybrid satellite and terrestrial network in Milan. Solaris Mobile is partnering with major Italian network operators for the provision of the terrestrial transmission network. Following the successful implementation of the initial phase, a full commercial launch will take place in 2012 where Solaris Mobile plans to extend the hybrid network across the whole of Italy.

 

Maine: It is a tough position, but I love it. I have had no thoughts of walking away. Most of my career has been about high growth, uncertain, innovative projects. They are exciting, frustrating, rewarding, interesting – all of those things. Those businesses tend to attract certain type of people so you end up with teams of people that are like minded, and it creates a tremendous buzz.