It has been another eventful year in the satellite industry. Who would have thought at the start of 2006 that we would have seen a high-profile link-up between traditional rivals SES Global and Eutelsat in terms of S-band? It was also a year where telcos came to the party in terms of television services with operators like Verizon, BT and Deutsche Telekom looking for a slice of the pie and putting pressure on the satellite players. It was an eventful year, maybe not so much as in 2005 when Intelsat acquired PanAmSat and SES Global acquired New Skies Satellites, but there still was much to talk about. Here is a summary of what occurred in 2006.

January

Arianespace CEO Jean-Yves Le Gall welcomed 2006 in a buoyant mood, the launch provider having had a successful launch of the Ariane 5 ECA in 2005. Le Gall spoke of the transformation that was taking place while "changing the culture" of the company. Among the primary objectives, he said, was that "we want to expand our launch vehicle family. We are transforming the company from one that operates a single launch vehicle successfully, to a company that will operate three launch vehicles successfully, offering a wide range of capabilities to better serve our customers."

Kurt Pauwels, the managing director of TV Vlaanderen, discussed a new DTH platform in Belgium that he hoped would take market share off cable operators Telenet and Belgacom to the tune of "100,000 subscribers in three years."

Meanwhile, Celso Azevedo, CEO of Ondas Media, a satellite operator trying to make a strong impression in the satellite radio arena, was similarly optimistic toward subscribers. Azevedo’s outline for the company, led him to believe "it will take two [or] three years to gain 3 million subscribers. After 2012, it will be a cash cow. Just do the math: Our business plan is based on an average of 12 euros ($15.69) a month per subscriber."

Eutelsat’s Giuliano Berretta also was in a bullish mood and did not seem overly concerned by the consolidation that had recently taken place among its peers. He said, "We are not in the race of who buys most. Our main objective is to maintain profitability, which, with a 77.1 per cent EBITDA margin (for fiscal year to June 2005), is the highest in the FSS sector."

February

Among topics discussed in February was the demise of Aramiska, a European satellite broadband operator. The company’s ex-CEO, Philippe Bodart, spoke at length about why the company had failed, and said that the writing had been on the wall for quite a while. "We knew in September 2004, around the third quarter in 2004, it would be very difficult to sustain our customers over time in the U.K. At that time, we had 70-75 percent of our installed base within the U.K."

Stephen Nuttall, BSkyB director of business development, talked of his company’s ambitious plans in the mobile and broadband arenas. The operator had recently announced a link- up with Vodafone to offer bouquets of channels on 3G, as well as a new service offering TV via the PC. BSkyB continued to set the pace for European DTH operators, and was one of the first to make significant moves beyond DTH. Despite the moves into mobile and broadband, Nuttall denied the operator "was moving away from its satellite roots".

Jean Grenier, president of the European Association for the Protection of Encrypted Works and Services (AEPOC), and Simon Twiston-Davies, CEO of the Cable and Satellite Broadcasting Association of Asia (CASBAA), both spoke of the problems that satellite operators faced, especially the billions of dollars in lost revenues that was being caused by piracy.

The CEO of Zee Telefilms, Subhash Chandra, was responsible for one of the fastest-growing DTH platforms globally, DishTV in India. Chandra said that growth rates had been strong, adding "we have surpassed our target of 2 million subscribers (in June 2005) and are adding more than 3,000 subscribers a day."

Nevertheless, it was the fate of Aramiska that dominated the news in February. Late that month, when Ouranos Networks CEO Michel Davoudian was asked about the company’s plans for Aramiska, Davoudian outlined a change in strategy for the operator, saying "we are getting new conditions for [our] satellite segment, which is that we pay only for what we consume. Before, they had to pay for full capacity even if they were only using part of it." Problems would loom for the operator throughout the rest of the year.

March

One of the main stories to come out in March involved SES Astra, which unveiled aggressive plans for the German digital TV market. SES Astra announced plans to offer its Entavio infrastructure for free-TV, pay-TV and additional interactive services as Germany moves towards an all digital landscape. In terms of what he hoped to achieve, Ferdinand Kayser, CEO of SES Astra said, "At the start of 2007, I think that we would have succeeded in convincing the broadcasters, but also the public in Germany, about these digital TV services." It would suffer a blow in December when ProSiebenSat.1 said it would not be a part of the project with its free-to-air (FTA) channels.

Pay-TV in the Middle East was also under the spotlight. Showtime CEO Peter Einstein, running one of the leading DTH operators in the Middle East, spoke of the operator’s potential to offer an IPO. On that issue, Einstein said "we are still contemplating and looking at very extensively an IPO. We have not made any final decisions at this point. I am not sure whether we will make a decision this year." Indeed, by year’s end no decision had yet been made.

The other major DTH interview of the month involved German pay-TV operator, Premiere. The operator which had in late 2005 surprisingly lost the Bundesliga soccer rights, was set to be one of the first DTH operators to launch HDTV services in Europe. Chief Programming Officer Hans Seger was in high spirits, saying "by mid 2008, we expect to have some 500,000 HD subscribers. After the positive result of our field test and the very satisfactory launch of HD, we have every reason to be confident that our HD programs will prove to be very popular."

April

Hatice Memiguven, COO of DigiTurk, outlined the operator’s aggressive plans in terms of HD and PVR with a high-spec PVR box set for launch in early 2007. She commented, "The box will have a capacity of 250 Gb. It is not just a PVR. It will have push VOD services available in the box." DigiTurk has over a million subscribers in Turkey. Turksat CEO Osman Dur was also in an optimistic mood, and spoke of many government projects in Turkey which involved satellite communications.

In one of her first interviews, the new president of Hispasat, Petra Mateos, declared herself happy with the operator’s performance in Latin America. She said "the performance of Amazonas throughout its first year has been clearly satisfactory. The targets concerning occupation and sales capacity are being met, and we ended the year with an occupation level of around 70 percent, a record for any satellite’s first year."

The major talking point in April was Thales’ acquisition of Alcatel’s space assets. According to one analyst, Alcatel definitely got the better of this deal. Karim Nour, a satellite analyst at Frost & Sullivan told Satellite News, "This deal was a real coup for Alcatel, and it was an excellent move on their part. Thales is going to find that satellite manufacturing is a challenging business and will continue to be one. I think Serge Tchuruk (Alcatel’s CEO) pulled a pretty brilliant manuever, actually."

May

May was a relatively quiet month, although there were some interesting deals announced involving European pay-TV operators. BSkyB continued with its strategy to look at new platforms. It announced details of a trial with U.S. telecoms vendor Qualcomm. The trial would see the two conduct technical trials of Qualcomm’s MediaFLO technology in the U.K. as the operator looked at different way of monetizing the mobile opportunity. In another major deal, Premiere signed a deal with Deutsche Telekom (DT) so it will be able to screen Bundesliga soccer via IPTV. Having lost the rights in late 2005, this was seen as a critical deal for Premiere as it tried to minimize any possible loss from dropping the football rights.

EuroNews, a leading pan-European news channel provider, hoped to gain presence on U.S. DTH platforms; its CEO Philippe Cayla said "at the moment, we are considering being in the U.S. There are two major operators there. We are discussing with them to find an agreement with them soon." EuroNews would announce a deal in November with EchoStar.

The interactive advertising show took place in London, with many satellite pay-TV operators presenting about the revenue-generating opportunities for interactive advertising. In fact, the show seemed to indicate that DTH operators such as MultiChoice (Africa), DirecTV (U.S.), and BSkyB (U.K.) were some of the main innovators in terms of interactive advertising.

June

In a major DTH focus, CEOs of the two major Polish DTH platforms narrowed their sights. Polsat CEO Dominik Libicki believed his company was catching up fast to industry leader Canal+ Polska. He noted "in 2001, when I became president of Polsat, we had 70,000 subscribers. At the same time, the merged platform of Cyfra+ and WizjaTV announced that it had over 700,000 subscribers. Today, we have 700,000 customers while our competitor talks of 800,000 subscribers." Canal+ Polska CEO Arnaud de Villeneuve spoke of a recent deal with Poland’s main telco, TPSA, as the operator tried to expand beyond DTH. He said, "This year, it will be ADSL. Next year, it might be DTT or mobile. We want to have more and more of our own content available via different distribution platforms."

BSkyB, atypically experienced some problems in June. A shortage of STBs meant its high-profile HD launch did not go as planned in the early stages. Brian Sullivan, BSkyB’s director of new product development and sales, told Satellite News that demand for HD boxes had been strong. He said "the figure of 40,000 advance sales of Sky HD in the first three weeks is a lot more than the equivalent figure for Sky+ at the same stage." However, with people having installation dates pushed back, it was not a great start.

In fact, HD was one of the main topics of conversation in June, particularly as the World Cup in soccer had started in Germany. In a major interview, the CEO of Canalsat, Guy Lafarge, spoke of Canalsat’s plans in terms of HD. He said the operator hoped to launch a HD PVR box in 2007.

July

One of the European Space Agency (ESA)’s top execs told about some of the main challenges facing ESA. Giuseppe Viriglio, director of European Union and Industrial program at ESA, outlined the need for space technology to keep pace with technology developments elsewhere. He said "satellites need to be more flexible; they need to be more powerful so as to be able to offer more and more capacity, to carry the growing amount of transactions. This is due to the Internet and the existence of more and more operators, [so] we must make sure that the capacity of the satellites is following the trend."

BSkyB was in the news again in July. This time, the operator unveiled its eagerly awaited broadband packages in the U.K. The plans were bigger, bolder and more ambitious than anyone expected, with BSkyB offering free broadband to all of its subscribers, although there were also other packages available. Still, the launch was a signal of intent to BT, ntl and others that BSkyB wanted to be a force in the triple play market.

Indian Space Research Organization (ISRO) had a difficult time, having recently seen the unsuccessful launch of the INSAT-4C satellite. G. Madhaven Nair, the chairman of ISRO outlined the organization’s plans in wake of the unsuccessful launch of INSAT-4C. Nair said the loss of Insat-4C capacity would "only have a short-term impact" for the company.

August

DTH in Eastern Europe was a particularly hot topic in 2006, with traditional cable operators Serbia Broadband and Romania Cable Systems (RCS) launching pay-TV services via satellite. RCS CEO Alex Oprea said the operator planned to launch DTH services in a number of markets, not just Romania. He said, "We are looking at a number of countries in the region. We have not decided yet if and where to start. We will be looking at other territories in eastern Europe. Currently, we are looking at four or five countries and we will make a decision soon." One of the markets definitely under consideration was the Czech Republic, where Oprea admitted the company wanted to launch a DTH service.

Orbit CEO Samir Abdulhadi said Orbit was unconcerned that its rival Showtime had beaten it to the punch in terms of PVR. He said "at Orbit, we already have a PVR solution but we have decided to withhold its launch as we believe value-added PVRs that are SVOD-capable would be better accommodated by the market. We have the solution. But, we are adopting a ‘wait-and-see’ strategy."

Also keeping busy in the Middle East was Gilat Satellite Networks CEO Amiram Levinberg, who thought economic conditions were favorable for the company.

"I think that generally speaking we are in a very good period of time for our market in terms of macro-economic considerations.," he said. "There are a large number of VSAT deals taking place. As long as the macroeconomic situation stays like this, it will help the entire industry, as well as us."

September

Antoine Bouvier, CEO of EADS Astrium, thought consolidation would ultimately be good for the satellite manufacturing industry. He said, "We think in the medium to long term, this (consolidation) will strengthen the market. There will be more efficiency in the industry." Bouvier also believed the company had performed strongly in tough market conditions, saying "in 2005 and 2006, we had around 20 orders; we can assume now that the short-term negative impact is behind us."

A major issue was bubbling to the surface in France. With the merger of the two satellite pay-TV platforms, TPS and Canalsat, one of the main questions was whether a combined platform would use one or two satellite operators. Canalsat had been based on Astra and TPS on Eutelsat. Maxime Saada, Canal+’s vice president of strategy, explained when pressed on this issue that they were "in the process of examining the situation," and soon to announce a bidding process. "We are not necessarily going to go with one operator," she said, adding "we are considering every option, and that includes keeping both."

October

There is little doubt that Microsoft wants to play a big role in digital TV’s going forward. A successful Microsoft could give telcos a significant competitive advantage; Microsoft TV head Enrique Rodriguez sounded a warning to pay-TV operators worldwide when he said, in one of his first major interviews, "I think 12 months from now, you will start to see the first major utilization of some of the core software features of Microsoft TV IPTV Edition which significantly differentiates the platform from existing digital pay-TV networks."

Satellite services in Australia were also under the spotlight. Top execs at major satellite pay-TV operators Foxtel and Austar spoke about ambitious launch plans. Austar’s Deanne Weir, group director for corporate development, talked about a high-profile PVR launch. She said "we will have our PVR out in the market at the start of 2007, [but] are doing a bit of a world first with the PVR because we are adding FTA digital tuner. It will have two satellite tuners and two FTA tuners."

In one of the major deals done in October, Apax Partners acquired Telenor Satellite Services for $400 million. According to analysts’, the deal made sense for Telenor, as satellite had very much become a non-strategic area for the company.

In another major deal announced in October, the Kudelski Group, which supplies conditional access (CA) to satellite pay-TV operators, acquired OpenTV, a middleware provider. Andre Kudelski, CEO of Kudelski Group, said the deal would enable the company to offer more compelling interactive and security solutions to satellite pay-TV operators.

November

Traditional rivals SES Global and Eutelsat decided to join forces to attack the mobile broadcasting market. Shortly after the deal was announced, SES Global CEO Romain Bausch spoke about the link-up, and admitted it made sense in this particular case to join forces. He explained "would we have done it separately? I am not sure, because besides the commercial risk there is also the issue of access to frequencies and orbital positions. That would have been another major risk, if we would have developed this in parallel. It is a mix between commercial risk, and the fact that when you are operating in S-band, it is not as easy as in the other frequency bands to operate satellite at different orbital positions servicing the same geographic market."

November was also when Satellite News spoke to the CEOs of the two Nordic satellite pay-TV operators, Viasat and Canal Digital, Hans-Holger Albrecht and Christian Albech. Both talked of attacking the mobile market to each become more of a force within IPTV, as well trying to outdo each other in terms of PVR and HD strategies.

One major acquisition was announced in November when Arqiva decided to buy BT Broadcast Services, and Arquiva’s Nick Thompson, managing director of satellite media solutions, hoped the deal would be a springboard for success in the U.S. market. He said "we already have a number of major U.S. customers where we are providing aggregation services and collecting content from Europe and transmitting it across to the U.S., and also bringing services from the U.S. into Europe. So this puts bodies on the ground and gives us facilities in both the East and West coasts, and an ability to look at the market and start to develop it."

December

The main shareholders of Eutelsat changed when Spanish infrastructure company Abertis purchased a 32 percent stake, just days before Caisse des D�pots et Consignations — a state-owned financial institution that performs public-interest missions on behalf of France’s central, regional and local governments — spent over 860 million euros ($1.12 billion) to acquire a 25.5 percent stake in Eutelsat from Eurazeo.

Inmarsat CEO Andy Sukawaty told of recent, post-IPO events at the mobile satellite services provider. Discussing the prospects for the operator to enter the satellite radio market in Europe, Sukawaty said "satellite radio has taken longer than some would have expected, but it continues to be one of a number of growth opportunities. We have the luxury of continuing to work that, and hopefully in the year or two ahead, we will start to have some tangible progress with some deals we can announce."

–Mark Holmes