Orange Exec Explains IP and Satellite Blend
Orange (France Telecom) is one of the top performing telcos in the TV space, with about 1.4 million IPTV subscribers for its Orange TV service in France. The operator leads the way of all major telcos in Europe in terms of IPTV subscribers.
Not content with just being an IPTV leader, the operator also launched a DTH service in France in July, meaning it can bring its Orange TV service as part of a triple-play offerings for subscribers who cannot gain access to the TV service via DSL.
Orange’s Senior Vice President Partnership and Services-Content, Herve Payan, discussed Orange’s innovative use of satellite and IP to provide TV services to customers.
Via Satellite: What do you think will be the unique proposition of the service?
Payan: We are not a satellite television operator in the traditional sense. The main driver for us is to push telco subscriptions. This is triple play as well as mobile subscriptions. We are using ADSL technology, and in France triple-play services have almost become the standard. Fortunately, we cover 98 percent of population in France with Internet and telephony services. Unfortunately, we only covered 50 percent of the population with television-over-ADSL services. It requires more bandwidth, so only half of the population could receive these services. This meant when we advertise every day for 29.90 euros ($43.18) you can get unlimited telephony on VOIP, Internet at up to 18 megabits per second and television over ADSL, but one client out of two previously turning up in the shop is rejected. What we decided to do was launch a satellite offer that could complement our ADSL television coverage so customers can have triple play wherever they are. If they cannot receive television over ADSL, we give them satellite television.
Via Satellite: What is the significance of using satellite technology alongside your IPTV offer, which already has been very successful?
Payan: We moved to satellite because a lot of our customers were asking for TV services and could not get them. There was a demand we could not satisfy. TV is essential in keeping triple-play customers. We know that 40 percent of our customers would not have come if TV was not offered alongside Internet and telephony services. It is a very key asset for acquiring and retaining ADSL customers. It is an acquisition tool. Also, if you look at churn, the churn on customers taking all three services, it decreases significantly. We know that television over ADSL could only reach only 50 percent of the population in France. Satellite is key in complementing IP coverage. The key thing is we are bringing a hybrid system with satellite and ADSL. Satellite for live channels and ADSL for video on demand.
Via Satellite: What role will satellite have in the pay-TV market alongside IP and cable?
Payan: We are the only ISP to launch triple-play services with a satellite component. We are the first ones to do it. What we do is very similar to what BSkyB does in the United Kingdom. We are also offering video-on-demand services through ADSL.
Via Satellite: There is Canalsat, Bis TV and now Orange TV via satellite. Can the French market sustain a number of different satellite pay-TV offers?
Payan: We are not adding another satellite offer. For 29.90 euros, we give you a set-top box where you can receive television services over satellite. You can receive video on demand over ADSL. It is a hybrid set-top box. It is the choice of the consumer which satellite offer you want to receive. We have signed an agreement with Bis so our customers can receive their offer. We are also talking to Canalsat so that our viewers can receive their bouquets. It is the same as on ADSL. We distribute Canalsat on ADSL. We distribute these channels as well as our own services, which you will see in the coming months. We are a distributor. We don’t mind if the subscriber is subscribing to Bis, Canalsat or our own package of services or all three at the same time. We are neutral. We are using existing bouquets. The only revenue Canalsat is losing is through the set-top box. We are in negotiations with Canalsat. Right now, we are only offering our own services and Bis (via satellite). We are launching our own services such as a dedicated soccer channel and Orange Cinema. We want to try and do the same as we do on ADSL.
Via Satellite: What role do you see the company playing on the pay-TV landscape in France? Where do you hope to position the company?
Payan: We have 8 million ADSL subscribers, and we intend to offer them all television services. That is one-third of the population.