Tiscali [Milan: TIS.MI], an independent pan-European ISP, hopes to be offering a new one-way satellite Internet access through Eutelsat’s OPENSKY platform to customers in the next month. Tiscali is partnering with Eutelsat in the next phase of its satellite broadband service strategy. The rollout of the new service will take place first in Italy and the Nordic region.

Mario Mariani, senior vice president of business development at Tiscali, told Interspace: “We hope to launch the service in Italy and the Nordic region very soon, probably within the next month. The other countries will follow in a matter of months. We will be very aggressive in marketing and selling this service.”

Eutelsat’s OPENSKY platform adds a high-speed satellite downlink to a regular dial-up connection, boosting the performance for Tiscali Internet subscribers. OPENSKY supports Web surfing and downloading at speeds up to 2 Mbps.

The service will be priced similar to DSL offerings at around 35 to 45 euros ($40.5 to $52.1) a month. Mariani sees a great opportunity for the service, particularly in the Nordic region. “We think a satellite broadband Internet service is very important in all of the Nordic region where the population is quite dispersed. So, in these areas, the infrastructure for broadband is not developed. However, the penetration of Internet in these markets is very high. We see a big opportunity to introduce these types of services in the region.”

The agreement is an important one for Tiscali. It is Europe’s largest independent pan-European ISP and offers competition to ISPs such as Wanadoo and T-Online across Europe. It has been one of the main success stories in pan-European Internet sector. It offers services in 15 countries in Europe and Africa. It is expecting significant increases in its DSL subscribers this year. Mariani said: “In DSL, we have 360,000 users across Europe. We want to reach 700,000 by the end of the year.”

The partnership is the second significant announcement Tiscali has made as regards a satellite broadband offering. In June last year, Tiscali announced an agreement with Gilat Satellite Networks [Nasdaq: GILTF] to provide a consumer two-way satellite broadband service. The service is mainly targeted at consumers and small office/home office users.

Its reach is a key reason why Mariani believes Tiscali is perfectly placed to offer satellite broadband services. “We are involved in all the different technologies regarding Internet access. We are present in mobile, dial-up, broadband and within broadband we have DSL and satellite. We have an important competitive advantage … we are focused on the Internet.”

But, while there is likely to be significant growth in the DSL area for Tiscali, satellite broadband is an important area for the company. “Satellite will have an important role in terms of broadband in Europe. We are talking about 40 per cent to 50 per cent of the territory that is not being covered by DSL. In this area, there is 20 per cent to 25 per cent of the population. It is providing broadband service in an area where otherwise people would not be able to get access to broadband.”

Tiscali hopes to generate 20 per cent of its broadband revenues from satellite. It ended 2002 with 214,000 ADSL customers across Europe, a 229 per cent increase from the same point at the end of 2001. Mariani is predicting over 300 per cent growth in 2003 if it reaches its projected 700,000 subscriber number.

Overall, Mariani sees satellite broadband opportunity as a major opportunity for the company. “In 12 months, we would like to have the service up and running in other countries where we are present. We want to have the same acquisition speed that we have in the markets where we offer a DSL service. It is a big opportunity for us to lessen the digital divide in Europe, not only between developed and under-developed countries but also for rural areas within Europe. Satellite is important here.” –Mark Holmes