Eutelsat

Eutelsat Communications began trading on the Eurolist by Euronext Paris exchange Dec. 2. The company relaunched its initial public offering (IPO) Nov. 28 citing the “improvement and stabilization of market conditions since the end of October” when the company withdrew its previous IPO. On its first day of trading, the stock lost 6 cents euro (7 cents) to close at 11.94 euros ($13.98).

Eutelsat will issue more than 71 million new shares of stock through its IPO, raising about 860 million euros ($1 billion).

Eutelsat’s IPO price of 12 euros ($14), is about 20 percent below the company’s initial expectations. Eutelsat set a range of 15.25 euros ($17.88) to 17.75 euros ($20.81) per share for its first IPO attempt in October but later withdrew the offering.

The offer represents about 34 percent of the capital stock and voting rights of Eutelsat. The net proceeds will be used to pay down debt in order to provide greater financial flexibility, the company said.

Continued coverage of Eutelsat’s performance will begin in the next issue of Satellite News.

SIRI, XMSR

For those looking to see how the market would have shaped up had Sirius Satellite Radio and XM Satellite Radio launched at the same time, then keep a close eye on the Canadian market. Once again, XM was first to market, with its XM Canada affiliate launching service Nov. 23. But Sirius Canada trailed by just more than a week, starting its broadcasts Dec. 1.

On paper, even though the two companies are starting at relatively the same time, XM Canada appears to have the advantage coming out of the starting blocks with its exclusive coverage of the National Hockey League beginning with the 2007-2008 season. Sirius Canada also will not have shock jock Howard Stern, due to decency regulations in Canada that are not present in the U.S. market.

Meanwhile, projections for satellite radio in the United States continue to show growth. The latest study, released by Jupiter Research Nov. 22, predicts the U.S. market will reach an installed base of receiving devices will grow from the current 12 million to 55 million units in 2010.

Terrestrial radio is trying to stem the growth of Sirius and XM, as the National Association of Broadcasters this week launched an ad campaign that uses the tag line, “Radio: you shouldn’t have to pay for it.” But wt is interesting about Jupiter’s research is that it cites portable music players such as Apple’s iPod, not terrestrial radio, as the biggest competitor to satellite radio.

Sirius and XM also are continuing their battle in the automotive market. In November, Nissan North America Inc. selected XM as the factory-installed satellite radio for Infiniti and Nissan vehicles beginning with the 2008 model year. More than 500,000 Nissan and Infiniti vehicles with factory-installed XM Satellite Radio are projected to be produced for the 2008 model year, with more than 1 million projected annually by the 2010 model year. Sirius announced Dec. 1 that Mazda will be offering Sirius receivers as a port-installed option on certain 2006 model year vehicles. Sirius also extended its exclusive arrangement with Mercedes-Benz through Sept. 1, 2012. Mercedes-Benz said it expects 50 percent of its vehicles to have Sirius installed.

Benjamin Swin-burne, analyst with Morgan Stanely, noted in a Nov. 29 research report that Sirius’ deal with Mercedes-Benz should offset the loss of Nissan, estimating that Sirius gross additions from Nissan/Infiniti would drop from roughly 200,000 to zero when Nissan’s exclusive agreement with XM begins. XM, on the other hand, could see gross additions from Infiniti and Nissan grow from 85,000 and 123,000 to 600,000 and 810,000 in 2008 and 2009, respectively.

Overall, Swinburne remains confident in the investment prospects of satellite radio. “We continue to see satellite radio as a rare opportunity for investors to benefit from secular growth in a very mature media industry,” he said.