Latest News

Eutelsat Maintains LATAM Momentum, KA-SAT Filling Up

By | August 3, 2015
      Michel de Rosen Eutelsat

      Michel de Rosen, Chairman and CEO of Eutelsat. Photo: Denis Allard/REA; Eutelsat

      [Via Satellite 08-03-2015] Emerging markets, and Latin America in particular, are expected to be primary drivers of growth for Eutelsat Communications, according to Chairman and CEO Michel de Rosen. The satellite operator has four satellites pending launches by year’s end — Eutelsat 8 West B, Eutelsat 36C, Eutelsat 9B and Eutelsat 117 West B — and over the next 18 months more than half of the company’s new capacity is devoted to Latin America.

      Eutelsat’s results for fiscal year 2014 to 2015 reflect the first full year following its $831 million acquisition of Mexican satellite operator Satmex, which has since been renamed Eutelsat America. Revenues for Eutelsat reached €1.476 billion, increasing by 9.5 percent, and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) stood at €1.132 billion. Looking forward, the company plans to continue building on its progress in Latin America, as well as in other emerging markets such as Africa.

      “Of our future growth drivers, the first is video, particularly in fast-growing markets, de Rosen explained during the company’s July 30 earnings call. “The second is broadband and mobility that we will mainly address through selective investments in High Throughput Satellites (HTS) and payloads. The third is the strengthening and diversification of our footprint in targeted high-growth markets, specifically Latin America.”

      Eutelsat’s latest satellite, Eutelsat 115 West B, launched early in 2015 aboard a SpaceX Falcon 9 rocket. De Rosen described the capacity increase from this satellite as the most important of the fiscal year. The Boeing-built all-electric satellite requires seven to nine months to reach its designated orbital location at 114.9 degrees west. After Eutelsat 65 West A launches in 2016, the company will cover all of Latin America, de Rosen said.

      Eutelsat further described the African video market as significantly underpenetrated. De Rosen said the continent has two channels per million inhabitants, compared to 11 channels per million inhabitants in Western Europe. HD channels trail in a similar manner, he said, accounting for just five percent in Africa compared to around 18 percent in Europe. De Rosen said the digital switchover, which has yet to occur in the majority of African nations, should be catalytic to business as countries reach this pivotal milestone in the coming years.

      “Africa is experiencing economic growth and growing purchasing power, especially among the middle class. This will benefit both pay-TV and [Free to Air] FTA television. The number of pay-TV subscribers has doubled in Africa in the last four years to almost 10 million, and should reach 16 million by the end of the decade,” he said. “FTA television will be supported by increasing advertising revenues, which are expected to rise 60 percent by the end of the decade. As a result the number of channels is expected to grow by over 6 percent per annum, on average, with a progressive ramp up [of] high definition penetration. This means, of course, additional demand for satellite capacity.”

      Eutelsat has satellite coverage over Africa at three locations — 36 degrees east, 16 degrees east, and 7 degrees east—boosted in part by a strategic partnership with Spacecom.

      Launch delays have snagged some of Eutelsat’s anticipated growth in the years to come. Both International Launch Services (ILS) and SpaceX have experienced launch failures with their flagship rockets this year, causing setbacks. The next mission, Eutelsat 8 West B, is scheduled for an Aug. 20 Arianespace dual launch with Intelsat 34 aboard an Ariane 5 rocket. De Rosen said the head of Khrunichev, manufacturer of the Proton rocket, recently confirmed a later fourth quarter launch of Eutelsat 36C, likely around the end of November. Eutelsat 9B, another Proton mission, was pushed back to Q4. SpaceX has announced its intention to complete all launches on its manifest by the end of the year, though de Rosen mentioned, “we recognize this may be challenging.” Regarding the delay of the Eutelsat 65 West A mission, which is with Arianespace, de Rosen said the launch provider currently has more large satellites than small in its manifest, and the delay is to synch the Eutelsat mission with a smaller satellite for a dual launch.

      A lasting highlight for Eutelsat during the call as the affirmed success of KA-SAT. Michel Azibert, deputy CEO and chief commercial and development officer, and committee deputy chairman, Eutelsat, said 185,000 broadband terminals were activated at the end of 2015, up from 154,000 a year earlier and 180,000 at the end of March. Net additions show signs of stabilization this quarter at above 5,000, he said. Now Eutelsat has begun to limit adding customers on the satellite as some beams reach saturation.

      “A few years ago, who would have believed that we would have reached congestion when people were skeptical that KA-SAT would be a commercial success? So this is the price of success,” De Rosen chided.

      Azibert said as of July 1, Eutelsat stopped adding new residential customers within two beams covering mostly central France because they were reaching saturation during peak hours. Including beams overlapping adjacent countries, KA-SAT covers France with 11 spot beams. Azibert said the company will continue to serve enterprise customers and academic institutions with the beams, since such customers do not have the same peak hours as residential customers. He hinted that other beams targeting Ireland, the U.K. and France are going to get closer to saturation.

      KA-SAT has 82 Ka-band high throughput spot beams. De Rosen said the company plans to add more HTS capacity in the future, targeting broadband and mobility markets in fast growing regions.

      “GEO HTS satellite is a proven and reliable solution and we remain convinced of its competitive advantage versus other architectures,” he added.