satellite broadcasting services
TRANSCRIPT
SatelliteBroadcastingServices
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Vol.2 No. 3 June 2004
CONTENTS TABLE OF
Click on the title to godirectly to the story
11/ Who Will Own the
Entereprise?
17/ Next Generation VideoServices
15/ BBC Promises HDTV
3 / Note from the Editor
4 / Calendar of Events
5/ Industry News
8/ New Products and Services
10/ Executive Moves
26/ Market Intelligience: Satellite Interoperability
(presented by the Global VSAT Forum)
28/ Stock Monitor
28/ Advertisers' Index
13/The Latest Trek on Enterprise
FEATURES
Many operators see theEnterprise Market as anenormous and potentiallyuntapped source of revenue, yetfew comprehend the complexityof the challenge they face as theyattempt to penetrate it.
Bruce Elbert show how totap into the potentiallylucrative EnterpriseMarket.
.
REGULAR DEPARTMENTS
By Alan Gottlieb By Bruce Elbert
Vol. 2 No. 3June 2004
By Chris Forrester
The BBC is favoringsatellite delivery of HDTV.
Industry consultant DavidGillies discuss theimplications of nextgeneration video servicesusing MPEG4 to satelliteoperators and broadcasters.
By David Gillies
23/ Interview with SESAmericom Senior VPBryan McGuirk
By Virgil Labrador
SES Americom’srecently appointed SVPfor Domestic Services,Bryan McGuirk spoketo SatMagazine onopportunities andchallenges in the NorthAmerican market.
21/NileSat Wants NewSlot
By Chris Forrester
Egypt-based operator,NileSat is seeking a neworbital slot as well as newequity partners.
COVER STORY
EXECUTIVESPOTLIGHT
REGIONALUPDATE
(photo: Paramount )
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Satnews Publishers is theleading provider of informationon the worldwide satelliteindustry. Fore more informa-tion, go to www.satnews.com.
Published monthly bySatnews Publishers800 Siesta Way,Sonoma, CA 95476 USAPhone (707) 939-9306Fax (707) 939-9235E-mail: [email protected]: www.satmagazine.com
Baden WoodfordContributing Writer, Africa
Jill Durfee([email protected])Advertising Sales
Joyce Schneider([email protected])Advertising Sales
Copyright © 2004Satnews PublishersAll rights reserved.
EDITORIALSilvano PaynePublisher
Virgil LabradorManaging Editorand Editor, North America
Chris ForresterEditor, Europe, Middle Eastand Africa
Bernardo SchneidermanEditor, Latin America
John Puetz, Bruce ElbertDan Freyer, Howard GreenfieldDan MakinsterContributing Writers,The Americas
Peter Marshall, David HartshornMartin JarroldContributing Writers, Europe
NOTES FROM THE EDITOR
The Plot Thickens
Just two weeks after the acquisition by buyoutspecialist KKR of the third-largest satelliteoperator, PanAmSat, the second largest operator,Intelsat has acknowledged that it has receivedinterest from an unspecified party to invest in orbuy the company. In order to pursue this possibility,Intelsat has cancelled its plans for an IPO.
This was followed by an announcement by New SkiesSatellites that they are in “advanced negotiations” with a privateequity firm for the purchase or investment in their company.
The plot thickens.
I have always asserted that the renewed interest by the investmentcommunity in the satellite business is an affirmation of the long-term viability of the industry. It remains to be seen what willbecome of the satellite companies bought by investment firms. Itdoes make for an interesting summer.
Meanwhile, the business of satellites goes on.
This month, the biggest show in Asia, CommunicAsia, which wascancelled last year due to the SARS threat, is making a bigcomeback.
The ISCe show in Long Beach, Calif. is also on this month and iscontinuously growing in attendance and importance. Satnews willbe chairing a session on “Earthquakes, Fires and Floods: Satellitesto the Rescue” at ISCe.
In this issue we focus on the growing enterprise market. Inaddition to incisive articles by our regular contributors, we alsofeature a candid interview with SES Americom’s Senior VP forDomestic Services, Bryan McGuirk.
In keeping with the renewed financial emphasis in the industry, wehave introduced in this issue a new section--Stock Monitor (page28).
Enjoy the issue.
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CALENDAR OF EVENTS
June 2004
June 1-3 Long Beach, California, USA ISCe Conference and Expo 2004Ms Gina LermaTel: +1-310-410-9191 e-mail: [email protected] www.isce.com
June 14 Singapore, CASBAA Satellite Industry Forum 2004Tel: +852-2854 9913 e-mail:[email protected]
June 15-18 Singapore, CommunicAsia andBroadcast Asia 2004Victor Wong, Senior Project ManagerTel. +65-6233 8662 Fax: +65-6835 3029 e-mail: [email protected]
June 16--17 Beirut, Lebanon, ARABCOM2004Jean-Louis Farwagi, Arabcom project managere-mail: [email protected]
June 20--24 Atlanta, Georgia, SUPERCOMM2004Tel. 800-278-7372 +1-312-559-3327 (outside theU.S.)e-mail: [email protected]
June 28--July 3 Monte Carlo, MonacoMonte Carlo TV FestivalTel. +377-9999-3590www.tvfestival.com
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INDUSTRY NEWS
Buyer Intersted in INTELSAT
The SES GLOBAL companies bring entertainment andexcitement to millions of homes across the world. TheSES GLOBAL family consists of the world’s premiersatellite operators, each a leader in its respective market:SES AMERICOM in the U.S. and SES ASTRA in Europe,as well as the partner companies AsiaSat in Asia, StarOne and Nahuelsat in Latin America, and SIRIUS inEurope. This network provides satellite communicationsacross the globe, with the unequalled depth of serviceand audience that only regional market leaders canprovide.
Worldwide and worldclass.
Intelsat acknowledged that they received interested from anundisclosed party in buying or investing in INTELSAT. Intelsathas engaged Morgan Stanley and Merrill Lynch to explore thepotential of the investment in or acquisition of the company bythis party. In relation to this development, INTELSAT withdrewits its planned initial public offering (IPO).
In a company statement, Intelsat CEO Conny Kullman said, “Thecurrent mix of market and regulatory developments makes it clearthat withdrawal of the IPO is in the best interest of our company.In light of the extension of the ORBIT Act deadline, and theinterest we received regarding a possible investment in oracquisition of our company in connection with our previousprocess, we now intend to resume the exploration of thispossibility. In the meantime, we will continue to engage with theFederal Communications Commission with regard to theregulatory treatment of certain direct-to-home services in NorthAmerica.”
The decision to withdraw its planned IPO followed the signinginto law on May 18, 2004 of an amendment to the ORBIT Act thatchanges the date by which Intelsat’s IPO must be conductedfrom June 30, 2004 to as late as December 31, 2005. Earlier today,Intelsat filed a Form RW with the Securities and ExchangeCommission to withdraw its registration statement.
INTELSAT was the first intergovernmental satellite systemestablished in 1964 and was privatized in July 2001. It is currentlythe second largest global satellite operator after Luxembourg-based SES Global. Recently, it completed the purchase of all ofLoral’s North American satellite assets.
News Skies Satellites in “Advanced Negotiations” withPrivate Equity Firm to Sell its Assets
New Skies Satellites N.V. announced that it is engaged inadvanced negotiations with a leading private equity firmregarding a proposal from this firm to acquire the company. NewSkies has also confirmed it has received proposals from otherthird parties and is in concurrent discussions with these parties.
All current discussions contemplate a sale of substantially all ofNew Skies’ assets and liabilities for cash at values representing apremium to the company’s current share price, according to acompany statement. Any such sale would be followed by aliquidation of the Company and the distribution of the cash to itsshareholders. New Skies’ business and operations would becontinued by the purchaser, with the effect of the transaction
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INDUSTRY NEWS
being a change in ownership of the New Skies businessenterprise. The statement further stated that any agreement tosell New Skies’ assets would be subject to the approval of NewSkies’ Management and Supervisory Boards. Consummation of atransaction, once agreed, would be subject to a number of otherconditions including approval by New Skies’ shareholders at anExtraordinary General Meeting and receipt of necessaryregulatory approvals. New Skies anticipates that a transactionwould be completed, and liquidating distributions paid toshareholders, no sooner than the end of 2004. Theannouncement comes in the heels of INTELSAT’s announcementlast Friday that it too has received interest from an unnamedparty to purchase or invest in the company. New Skies spun offfrom Intelsat in 1999 and is one of only five satellite operatorswith global coverage.
Comtech EF Data. Receives $6.5 Million in Orders forSatellite Communications Equipment
Comtech EF Data Corp. received three orders for satellitecommunication equipment for the month of May worth $ 6.6
million. One order was for $4.0 million from a leading globalsatellite service provider and the other was a $1.3 million orderfrom a major telecommunications service provider in SouthAmerica and another $1.2 million order from a major cellularoperator in South East Asia
The $4.0 million order is a Basic Ordering Agreement (BOA),providing for purchases of $2.0 million per year for two years.The BOA covers purchases of Comtech EF Data’s satellitecommunications equipment ranging from digital and IP-centricsatellite modems to frequency up and down converters andtransceivers. The satellite service provider will deploy theequipment to support its global satellite communicationsinfrastructure and connectivity solutions.
The $ 1.3 million order from South America includes variousproducts from Comtech EF Data’s extensive product line,including satellite modems, frequency converters andtransceivers. The equipment will be used in the customer’snetwork infrastructure expansion and also to support GlobalSystem for Mobile Communications (GSM) applications. errorcorrection.
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INDUSTRY NEWS
ISCE 2004 Conference and Exhibition to KickOff June 1
The Third annual ISCe 2004 conference and exhibition will kickoff on Tuesday, June 1st at the Long Beach Convention Center.Leading a distinguished line-up of speakers is SES Global CEORomain Bausch who will be giving the keynote address.
The conference will be highlighting key sessions organizedaround different fora on Defense and Security, Navigation, Next-Generation Capabilities, among others.
“With homeland security as a top priorityon the agenda, the Coast Guard is at aheightened state of alert protecting morethan 361 ports and 95,000 miles ofcoastline,” said Art Paredes, ISCe Chairman.“We are honored to have Captain PeterNeffenger, USCG Commanding Officer andCaptain for the Port of Los Angeles/LongBeach discuss what processes are beingimplemented to detect and prevent ourPorts from potential acts of terrorism.”Panelists in the Defense and Security Foruminclude senior officials such as Brig. Gen.Charles Fletcher, Jr., Assistant DeputyChief of Staff G-4 - U.S. Army; RADM RandFischer, Director, TransformationalCommunications Office, NROCommunications Directorate - U.S. Navy;Major General C. Robert “Bob” Kehler,Director, National Security Space - Office ofthe Undersecretary of the Air Force; and Lt.Gen. Brian Arnold, Commander - USAFSpace & Missile Systems Center (SMC).
Satnews Managing Editor, Virgil Labradorwill be chairing a session on “Earthquakes,Fires and Floods: Satellites to theRescue” from 3.30-4:50 pm on Thursday,June 1. The panel will feature the followingspeakers: Tom Bleir, CTO, QuakeFinder;Rob Knabe, Director Emergency Services,Brookstone Equipment; David Gray, LymanBros. and Steve Vaughn, CommunicationsChief, Riveside County, CaliforniaDepartment of Forestry and Fire Protection.
”ISCe presents a wide array ofopportunities for new businessdevelopment to both satellite providers and
end users,” said Joachim Schafer, president of Hannover FairsUSA .
“While the exhibit hall is the obvious place to make newbusiness contacts, several of the conference sessions, forexample “Galileo Opportunities for U.S. Providers” and “MilitarySpace R&D: Opportunities and Priorities,” are designed toprovide attendees valuable knowledge for competing on futureprojects,” he added.
For more information and to register, visit www.isce.com SM
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NEW PRODUCTS
AAE Systems Introduces the Eclipse DMM-6
Part of AAE’s Eclipse MF-TDMA product line, the DMM-6 is afully integrated, multiple modem chassis designed for use inbandwidth efficient DAMA-based VSAT networks. The DMM-6is primarily used in TDMA network hub terminals. In largercapacity hub stations, the unit may be clustered with otherDMM-6 units and set in redundant configurations. Through a
single Ethernet port,the DMM-6 is able tosupport aggregatedreception from up to sixTDMA carriers. Byassigning a largeoutbound carrier andmultiple smaller shared
inbound carriers, the DMM-6 facilitates the economical sizing ofremote VSAT terminals in a network. The DMM-6 works hand-in-hand with the DSM-1 remote modems in dynamically managedmulti-carrier networks.
The DMM-6 may be used in mesh, star, and DVB hybridtopologies and is easily adapted to meet any present and futuresystem requirements. The DMM-6 has a number of specialfeatures designed to increase systems availability, includingdynamic rain fade compensation and automatic power control.Additionally, the DMM-6 utilizes dynamic frequency hoppingamong assigned carriers, thereby assuring maximized utilizationof the total allocated satellite bandwidth. Employing an IP-basedcarrier, QoS, and an L-band IF interface, the DMM-6 supports anaggregated return capacity of up to 18 Mbps. The uniquemodulation method of the DMM-6 uses less overhead, lessbandwidth, and lower power amplifiers than conventionalmodulation schemes. For more information go to:www.aaesys.com
ERI to Showcase SatCom Interference SuppressionProduct at ISCe 2004
Electro-Radiation Incorporated (ERI) will showcase itsCommunications Protection Technology (CPT) Model 2100Interference Suppression Unit (ISU), as well as GPS Anti-JamProducts and Technologies, at the ISCe Conference and Expo inLong Beach, Calif. ERI’s exhibit will be focused on this year’sISCe theme of dual-use satellite-based services, applications and
innovative technologies for the commercial, civil, and industrialsectors.
Mario M. Casabona, President and CEO of ERI, stated: “We’reexcited to display our ground-breaking alternative solution toSatCom interference. This issue has plagued the SatCom industrysince its inception, and we are proud to lead the industry inproviding a strong, effective solution based on our technologystrengths. The CPT 2100 solves ‘real-world’ problems and will leadour Company to other exciting SatCom enhancements.”
John Thoma, ERI’s Director of Business Development, will showvisitors to ERI’s booth how they can learn how ERI’s SatComInterference Suppression Technologies provide a cost-effective,easy-to-use solution to recurring SatCom interference issues. BobWilson, VP of Business Development for DOD programs, will bepresent to convey how ERI’s multiple anti-jam techniques providea diverse array of GPS AJ solutions for handheld, ground vehicle,airborne, naval and precision guided missile markets.
Shiron to Introduce New VSAT at CommunicAsia 2004
Shiron SatelliteCommunicationswill unveil thesecond in a newline of advancedRemote Gatewaysat the upcomingCommunicAsia2004 show in Singapore.
e iRG 40, part of Shiron’s iRG family, is a powerful VSATsolution with robust open architecture and unparalleledperformance. The system is remarkable for its combination ofadvanced features. The iRG 40 supports both multiple standardsand technologies and enables smooth system capabilityupgrades over satellite.
“One of the main strengths of the iRG 40 is its adaptability,”said Sam Goldenberg, Director of Sales for Asia Pacific. “TheiRG 40 adapts to customers’ needs in both capabilities andprice, allowing them to make a minimal initial investment and laterupgrade to a more powerful solution without having to purchaseadditional hardware.”
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NEW PRODUCTS
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The iRG 40 supports adjustable data rates from 16 Kbps to 2Mbps and is DVB-RCS upgradeable. As with the previouslyreleased iRG 30, the iRG 40 supports DVB-S, DVB-RCS,DAMA/BOD and PAMA/SCPC and can operate as an integralpart of the InterSKY™system or in SCPC mode. The terminalsupports dual continuous and burst mode operation and has anadvanced set of networking capabilities.
“The iRG 40 raises the bar for VSAT technology,” said TobyOlshanetsky, Shiron’s VP of Sales and Marketing. “We’re verypleased to have achieved our goal of providing the broadbandcommunity with a powerful and flexible VSAT solution thatoffers such a variety of service levels. “
Patriot Granted Hispasat Type-Approvals
Hispasat, the Spain-based satellite communications operator, hastype-approved three of Patriot’s Ku-band antennas for use withits satellites. These approvals are the first for Patriot to receivefrom Hispasat. The approved antennas range from 1.0m to 1.8min size.
Effective immediately, these antennas are approved for use withthe Hispasat satellites throughout its coverage areas in Europe,Latin America, Northern Africa, and the United States. For moreinformation go to: www.sepatriot.com
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EXECUTIVE MOVES
Satellite Insurance PioneerPassed Away
James Barrett
SM
The man who pioneeredthe insurance ofcommercial satellites,retired insuranceexecutive James Barrettdied of arrhythmia May 1aboard his yacht in the
Bahamas. Barrett wasthe first to offer insurance to commercialsatellites, when in 1963 he pitched tothe then nascent CommunicationsSatellite Corp. (COMSAT) the idea ofinsuring their satellites. He heldcontracts to insure COMSAT satellitestill 1973.
He formed his own insurance brokeragecompany, the James W. Barrett Co. in1963. He sold the company to KaiserIndustries and became president ofKaiser’s California insurance subsidiary,Underwriters Services Inc. in 1970.In 1977, Barrett become president andchief operating officer of Corroon andBlack Inc., a subsidiary of one of thenation’s largest insurance brokeragefirms, and started International SpaceRisk Management Systems (Inspace) inBethesda as a subsidiary. In 1983, heleft Inspace and founded InternationalTechnology Underwriters Inc. (Intec),the first insurance firm specializing inunderwriting space ventures. In 1992,he sold the firm to AXA Group, a Frenchinsurance company.
John J. Sie Retires as Starz CEO
Starz Encore Group Chairman, CEO, andFounder John J. Sie announced that hewill retire as chief executive officer ofthe company effective June 30 and willretain the chairman title. Company
president and chief operating officer MarkBauman will serve as CEO on an interimbasis until a permanent CEO is named, atwhich point he said he will retire from thecompany. Starz president of sales andmarketing Robert B. Clasen was namedpresident and chief operating officer.
Sie, who recently turned 68, firstannounced a year ago his intention to retirefrom the company. At that time he said hewas delaying retirement only long enoughto see subscription video-on-demand(SVOD), a concept he pioneered, become areality.
Recognized as one of a small group ofvisionaries who built the cable televisionindustry, Sie has held key positions atleading technology, operations andprogramming companies. He played acentral role in many of the key cable andsatellite milestones of the past third of acentury. These include the development oftwo-way cable television, the creation ofthe Showtime premium television channel,the development of urban cable systems,the funding of numerous programmingnetworks such as the Discovery Channeland BET and the creation of the digitaltelevision standard in the US.
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COVER STORY
Who Owns the Enterprise?By Alan Gottlieb
As Satellite Operators face the future, they have come to therealization that to prosper they need to expand their markets
beyond the traditional areas of Broadcast and ISP focus.Oversupply of bandwidth and the incursion of fiber into the ISPsector have resulted in intensified competition and downwardprice pressures, and the need to open new markets is morecritical than ever.
Many operators see the Enterprise asan enormous and potentiallyuntapped source of revenue, yet fewcomprehend the complexity of thechallenge they face as they attemptto penetrate it. What they refer to asthe “Enterprise” is really a collectionof industry verticals such as Oil andGas, Mining, InternationalConstruction, Banking, DistanceLearning, Disaster Recovery, Telemedicine, Hospitality and otherbusinesses each with its own distinct communication needs andservice requirements.
Due to the complexity of these markets, Satellite Operators haverelied upon third party, value added integrators to penetratethese verticals. Why go to the trouble and expense of building adirect to customer integration business when satellite bandwidthis in short supply and good money can be made as a commodityprovider?
The answer, of course, is that when bandwidth is in over supply,revenues and margins fall. Selling a commodity becomes less andless attractive and value added business becomes a compellingalternative. This is the current market condition, and in responseto it Operators are initiating programs to go direct to the enduser. The danger of this is that they must now compete with theirown distributors.
While the idea of eliminating the middle man is attractive in astrategic sense, it is a difficult and costly challenge in the realworld. Building a successful value added business meansunderstanding the intricacies of each vertical, identifyingcustomer needs and developing products, services and thesupport structure to fill the need. This costs money and takestime.
Yet, in an environment where capital is short and positions arebeing eliminated, appropriating new funds to build theinfrastructure to reach the end user is unlikely. The result of all ofthis is executives are charged with the responsibility ofpenetrating value added markets with existing, commodityoriented, market research and sales staffs untrained in solutionselling and a total lack of after-the-sale service and supportinfrastructure.
In my view, it is possible to overcome these obstacles and createan economic hybrid structure to reach the end user. The model Ipropose relies upon a combination of reorganization in themarketing and sales area combined with limited investment andpartnership with existing third party integrators.
Begin with Market Research
Generating business in Enterprise markets depends upon theidentification of unmet customer need, and such needs can onlybe detected through meeting and developing relationships withthe end users themselves. Hence, market research analysts andexecutives must be capable of cold calling IT Managers inuntapped business sectors, setting up appointments with themand building the kind of relationships that identify satellitesolvable communications problems.
This sort of research requires aggressive and self confidentpersonnel with genuine sales and market research skills and isusually found only in senior analysts and executives, not recentbusiness graduates. If operators are really serious aboutpenetrating Enterprisemarkets, they need theskills and experience ofseasoned market researchprofessionals.
New Sales Approaches
In selling to Enterprises,sales personnel face amultitude of newchallenges.
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FEATURES
Firstly, IT Managers in many industries have traditionallypurchased all of their communications services throughterrestrial providers. Many of have never seen a salesman fromthe satellite industry nor do they understand the services thatsatellites can provide – other than simple point to point links. So,educating the customer needs to be a part of initial approach.
Secondly, sales personnel need an overview of the corporatenetwork in order to spot potential applications for satellitetechnology. “Why don’t you tell me about your network and itsapplications, and I will see how we can help?” This approachusually produces the kind of information a salesman needs tospot potential satellite applications and develop business.
In an industry that has sold commodity bandwidth, consultativeselling skills are a rarity. Sales personnel need to be retrained tosell solutions or replaced with sales with experience in solutionsbased selling.
Once the operator has a solutions oriented market research andsales team, unmet needs can be detected and product andservice packages developed. The final essential element,building of local integration and support infrastructure, can nowbe accomplished in ways that enhance margins and preservecustomer ownership.
Owning the Customer
Armed with a research group that identifies unmet needs and asalesforce capable of selling solutions, the operator can begin to
add value through the defining of needs and acquisition ofcustomers.
Once the sale has been made, integration and service work canbe subcontracted to local firms. In this scenario, the operatorowns the customer, can generate higher margins and avoidshaving to develop their own service infrastructure. This strategyis infinitely preferable to leaving customer ownership at the thirdparty level.
Finally, where capital is available, it makes sense to own apercentage of key, third party distributors. This assures a lock ona significant portion of the bandwidth business. Usedstrategically, this approach can solidify a competitive positionwith select Enterprise verticals.
In Conclusion
Penetrating the Enterprise is an achievable goal for the satelliteoperator. However, to be successful, it is necessary to improvemarket research techniques, restructure sales strategies to asolutions approach and provide local integration and servicethrough subcontracted or partially owned locally entities.Without such shifts in approach, entry into the Enterprise islikely to remain entirely in the hands of value added, localintegrators.
Alan Gottlieb is CEO and Principal Consultant at Gottlieb andCompany, Inc. His most recent assignment for Verestar Inc., openingof enterprise markets in Oil and Gas, International Construction,Pulp and Paper, Hospitality and Call Center Industries, employed aninnovative combination of on-site market research interviews and specialized salestechnique to produce market entry strategies as well as generate initial sales.
For the second year in a row, Mr. Gottlieb will moderate the Oil Industry Panel atISCe 2004 (June 1-3). Join him for some valuable insights into the newtechnologies and how they are enhancing oil industry communications.He can be reached at [email protected]
SM
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FEATURES
The Latest Trek on the Enterprise
By Bruce ElbertPresident, Application Strategy Inc.
“... the prospective seller ofbandwidth, equipment or servicesmust fully understand what they haveto offer in the enterprise market...”
Any organization that has a specificmission in providing a product or
service to customers can be classified asan enterprise. For this reason, enterprisesare found in both the public and privatesectors. Public sector enterprises are non-profits that serve the physical andspiritual needs of clients, while theircounterparts in the private sector produceassets and perishables for a profit. Eitherway, they must develop an enterprisestrategy that allows them to compete withlikely rivals who could do the same job ina more efficient or, as their clients see it,better way. Increasingly, information andcommunications technology (ICT) is akey aspect of competitive strategy, asdemonstrated by the value of PCs andwireless devices along with Internet-based services and computer databases.
In our last article, we identified fourclasses of potential buyers of satellitecommunications ground equipment: a)Service providers, (b) Consumers, (c)Government agencies, and (d)Businesses. The last two contain theenterprises that satellite operators,service providers and equipment sellerscould attract. The article in this issue byAlan Gottlieb presents a very practicalview and approach for marketingprofessionals wishing to enter theenterprise market from the satelliteperspective. I couldn’t agree more withAlan about the challenge of building theright kind of staff capabilities to findprospects and convert them into long-time buyers. I will take the point fromthere and address the “how” of theprocess.
First of all, the prospective seller ofbandwidth, equipment or services mustfully understand what they have to offer
in the enterprise market. I have found thatthis is big challenge for companies andtheir senior management. It is a matter oflisting the “assets” and “liabilities” asaccurately as possible, and quantifyingthem in relation to (a) what potentialenterprise clients need and want, and (b)what competitors have or could muster.The assets need to be broadly defined:
• Satellite resources, in terms oforbit locations, coverage,frequencies, and reliability (thehealth and operation of that bird).One cannot build an enterprisebusiness on a weak technicalfoundation.
• Staff, e.g., people of the highestskill and integrity, who can “beam
down” into whatever situationand deal with many unexpectedtwists and turns. Like any goodconsultant, they must learn howthe enterprise customer thinksand acts, and how to findsolutions that are both attractiveand profitable.
• Relationships with a variety ofsupporting groups, such assubcontractors and teleportoperators. Finding the rightpartners is as difficult as findinggood customers.
• Having the right financial backingto spend money where and when
needed – not like one of thosespend-thrift dot-com’s but morelike how Warren Buffet decidesto spend his.
• Intimacy with state-of-the-arttechnology in both hardware andsoftware, allowing you to identifythe right contacts on the supplierside and manage theircontribution from start to finish.Even James T. Kirk didn’t know itall, but he had every skillimaginable (in GeneRoddenberry’s terms) within hisEnterprise.
There are obviously many more suchguidelines, but the thrust is clear. Youmust have good officers and troops and
equip them with modern weaponry(today’s “phasors”) to find thatundiscovered country and makefriends. Alan Gottlieb identifies“consultative selling” as the skillneeded in most situations whereenterprise requirements are to be
identified. I would add that solutions arenot “meals ready to eat” but must becreated and prepared for the client.Importantly, the client needs to beencouraged to take an active part in itspreparation. Lacking this, it is doubtfulthat a profitable sale can be made.
By implication, the sales cycle for solutionselling in the enterprise is very long – notas long as the build cycle for a newsatellite (in the range 18 months to threeyears). The guidelines I suggest coverwhat you will need to develop thesolution for any enterprise, but onecannot be assured that even a goodstrategy will succeed in a particularengagement. This is the case because the
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Bruce Elbert has over 30 years of experience in satellitecommunications and is the President of Application Technology Strat-egy, Inc., which assists satellite operators, network providers and usersin the public and private sectors. He is an author and educator in thesefields, having produced seven titles and conducted technical and busi-ness training around the world. During 25 years with Hughes Electron-ics, he directed major technical projects and led business activities inthe U.S. and overseas.He is the author of The Satellite CommunicationApplications Handbook, second edition (Artech House, 2004). Web site:www.applicationstrategy.com Email: [email protected]
FEATURES
game is strongly influenced by theenvironment of the enterprise customer.Consider the following example of theprocess we might go through building agood customerrelationship:
1. Our company,Enterprise SatelliteSolutions (ESS) hasidentified BorgSystems as one of anumber of prospectsin an industrysegment that could benefit from anenterprise satellite solution.
2 By some means (Alan suggests coldcalls, but another venue might beattendance at an industry event),marketing professional Joann Ohuramakes contact with Frank Data, a telecommanager at Borg who expressed curiosityabout what the latest in satellitetechnology might accomplish. Theyarrange a meeting where Joann and othersmight bring Frank and some of hiscolleagues up to date (Frank once workedfor AT&T and had a limited involvementwith Telstar a couple of decades ago).
3. Joann discusses this with TommySpok, the brightest light among theirsystems engineers, who also happens tobe a really good presenter. They puttogether a presentation of high qualityand interest, which only indirectlypromotes ESS.
4. After a number of reschedules of themeeting (due to other pressing needs atBorg, such as a project that was about tocrash and burn), the presentation is heldand well received. No specific requirementis identified but Frank and his colleaguesindicate that they will be thinking about it(what “it” is, no one knows).
5. Joann resists bugging Frank (she issearching out other such potentialitiesand so isn’t sitting on her hands waiting
for the phone to ring) but after severalmonths she finds some reason to followup. This could be nothing more thanrunning into Frank at another conference
or sending him an interestingwhitepaper. Frank, meanwhile,hasn’t seen a need for a satellitesolution and hence is notparticularly interested in muchcontact.
6. Out of the blue – and possiblynine months later – Frank sendsJoann an email
asking if ESS could givethem a demonstration oftying land-based wirelessto a satellite link. It seemsthey are in dire need tosolve a communicationproblem that their regularsuppliers don’t have a clueabout.
7. Surprised (not really), Joannnevertheless replies in a supportivemanner that ESS will come for anothervisit to indicate some options and discusswhat can be done to satisfy theirrequirement. From here, she reengageswith Tommy Spok to create these options,which of course use ESS satellite capacity.However, Tommy realizes that all of thenecessary resources are not yet at theirdisposal (nor does he know what,specifically, they need to be) and soresearch is in order.
8. From this point, the team at ESS goesthrough the same process it always does
to develop a solution for a knownrequirement and follows the path set outin my previous list of guidelines.
9. Subsequently, the meeting with Borgoccurs, but this time, Frank and companyexpress a lot more interest andwillingness to cooperate and evenprovide some of their own resources aspart of a demonstration.
From this point, ESS would need to workhard and smartly to develop a cost/
effective solutionthat can beprovided ata profit. Bylinkingtightly totheircustomer(becoming
one with Borg), ESS gives every reasonfor Borg to remain loyal and therebypreclude a competitor from entering thefray. You cannot assume that the deal willbe done, but you are on your way todeveloping this business. It is possiblethat this solution will be appropriate toother enterprises, although one cannotbe sure of timing and volume. Instead,the Borg project gives our ESS team theconfidence and experience they need tocontinue to strike out where no solutionprovider has gone before. SM
photo: Paramount Pictures photo: Paramount Pictures
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FEATURES
BBC Promises HDTV“Satellite will be first”
By Chris ForresterSatMagazine Editor forEurope, Middle East and Africa
John Varney, chief technology officer atBBC Direction, the in-house division
responsible for the broadcaster’stechnology and strategic thinking, saysthe BBC will have completely adoptedhigh-definition television by the end ofthis decade. Moreover, he says the BBCis prepared to favor satellite for HD. “HDis important to the BBC in terms of co-productions and where we want toprotect content for the overseas market.In the longer term we are driven, not somuch by the need to go HD, althoughpersonally I think it’s a greatdevelopment, but because we won’t beable to buy anything that isn’t alreadyHD. We may need to detach ourselves alittle from the terrestrial transmissionparadigm and think about how the worldwill look in 5 years time. Where our abilityto deliver HD programming, say acrossbroadband, or to make for DVD, whichwill certainly happen within the 4-5 yeartimeframe. It’s happening today at thehigh-end, where you can buy HD-camcorders, and there are HD displaysscreens out there already. We will have tobe ready for our marketplace. We havesaid that we believe that by the end ofthis decade almost all, if not all, of theBBC’s production will be in high-definition.”
Varney was speaking exclusively toSatMagazine. His words echo those of amajor BBC report to the UK governmenton April 26 (www.bbc.co.uk/info/policies/pdf/digital_switchover_report.pdf). Whileconcentrating mostly on the likely ‘switch
off’ date of analogueTV, the BBC reportalso touched onHDTV, saying: “AsUK householdsadopt TV sets withever larger screensizes (a trend likelyto accelerate asprices are droppingquite quickly), whichexpose the picturequality limitations ofdigital TV, demandfor HDTV might beexpected to emerge, forwhich consumers would need to invest innew receivers. Growing familiarity withthe picture quality offered by DVD-Videocould be expected to contribute to this.However, although HDTV is likely tobecome a viable consumer proposition inthe UK within the next 5 years, it isunlikely to drive switchover within thattimeframe.”
The BBC’sview, therefore,was that HDTVwould – as faras the BBC wasconcerned -have to limititself to satelliteand cable.“There is alsocurrentlylimitedavailability ofsuitablecontent which
would benefitfrom HD treatment (although high-enddrama and sporting events - such as theOlympics – would), and could be made inHD without substantial added costs forthe broadcasters, and for whichconsumers might be willing to pay (HDTVis not backwards compatible to any of the
And Euro1080 Ramps Up
Belgian HDTV broadcaster Euro1080 hassuccessfully won some very useful cable distributionfor its service. Flemish cable MSO Telenet isalready conducting a technical test, while around 600,000 cable homesin the Netherlands will have access to the service starting in June.Germany’s ‘ish’ cable system will start transmissions in September.Euro1080 set-top boxes (under the Zinwell brand, QS1080ir model) arenow widely available (at around €300 each) plus the cost of the Irdetoconditional access card. Euro1080 encrypts on May 15. Pioneer andThomson also have set-top boxes coming to market.
BBC’s John Varney
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FEATURES
growing number of owners of large screendevices.”
Varney says satellite offers the bestchance for UK-targeted HDTV. “For theUK, my guess is that satellite will be thefirst to market HD. Cable could do it, but itdoesn’t have the market penetration andthe demographic of cable households issuch that you do not see it warranting aheavy investment in HD for consumers.Terrestrial could just about do it withdifferent coding technologies, but itwould mean a change of channel andservice mix on the multiplexes. Satellitehas the bandwidth, and could be thequickest to market if there was a suddeninterest from consumers.”
Asked when it was likely that the BBCwould begin transmissions, Varneyreplied: “Can I turn this around the otherway, by firmly stating that if we don’tdeliver HD to our audience then we willhave viewers who see broadcast TV asthe poor relation because everything theybuy will be high-definition. The scheduleseems to be that by the third quarter ofthis decade all domestic cam-corders will
London-based Chris Forrester, a well-known broadcastingjournalist is the Editor for Europe, Middle East and Africa forSATMAGAZINE. He reports on all aspects of the industry withspecial emphasis on content, the business of television andemerging technologies. He has a unique knowledge of theMiddle East broadcasting scene, having interviewed at length theoperational heads of each of the main channels and pay-TV platforms. Hecan be reached at [email protected]
be HD, plus domestic recording deviceswill be HD. There is most certainly amomentum.” SM
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Vol.2 No. 3 June 2004
FEATURES
Next Generation Video ServicesImplications for Satellite Operators and Broadcasters
By David Gillies
Over the last 18 months, new video coding technologies suchas MPEG4 / AVC and Windows Media 9 have dominated the
technical press and TV related conferences and exhibitions withthe promise of providing broadcasters with more efficient videocoding techniques leading to even more digital programmes perbroadcast channel. Indeed, for technologies such as ADSLwhich typically support bandwidths for each end user of lessthan 3 Mbits/sec, these video coding technologies permit for thefirst time the delivery of high quality video services allowingtelecom companies to compete with cable for triple play services.For a new operator, it would seem a simple and sensible choice touse these new technologies. For existing operators, stuck withold fashioned MPEG2 equipment, a swap out of set top boxesand head end equipment would seemimminent. But it is worthwhile to dig a littledeeper to compare existing and future videoencoding technologies and identify when thenew take over from the old.
Which Standards?
An interesting area to begin comparisons ofexisting and emerging technologies is withthe economics of setting up a new system.Consider a 50 channel TV service, to bebroadcast via satellite. Assuming abandwidth of 3.8 Mbits/sec for each channel comprisingcompressed audio and video plus some signalling, ConditionalAccess and other overhead, this is equivalent to 190 Mbit/sectotal bandwidth. If the service operates on 36 MHz transponders,using typical FEC and sampling rates providing roughly 38Mbits/sec per transponder, then a total of five transponders willbe required to operate the service.
Now if new video encoding technologies are employed, reducingthe total bandwidth requirement by around 50% - even more maybe possible – the total number of transponders is reduced to twoand a half. By being even more aggressive, and employing thelatest DVB-S2 satellite encoding technology, the data capacity ofthe transponders can be increased by around 30 %. Thereforeemploying the newest available technology, the transpondercount for a 50 channel service can be reduced from five to two,with a corresponding saving in transmission costs. Assuming a
transponder cost of $ 2 million p.a., this corresponds to a savingof $ 6 million per annum.
So far, so good. But the consumer will also require a set top boxbased on these new technologies to access the services. A lowcost, DVB / MPEG2 satellite STB can cost around $ 60 in volume,however, it is unlikely that an MPEG4 / DVB-S2 STB will costless than $ 120 over the next twelve months. There is therefore apremium for using the new technology of around $ 60 perconsumer. If the service has a target growth rate of around500,000 consumers p.a., and 50% of the STB cost is subsidised,then the annual costs for subsidising the new technologies is $30 million per annum – dwarfing the transmission savings.
This rather unsophisticated calculation iswithout doubt open to challenge andimprovement, however, the simple fact is thatthe set top box remains one of, if not the mostexpensive element, of setting up a new digitalTV service. So there is currently no soundeconomic reason to begin using newtechnologies – and there is no obviousadvantage for the consumer. Allowing time forthe cost of using these new technologies toreach levels equivalent with MPEG2equipment, then for most standard definitionservices it will be at least two more years
before the use of AVC / WM 9 begins to become economicallycompelling. MPEG2 services will continue to dominate digital TVbroadcasting for the foreseeable future.
Although that is good news for manufacturers of MPEG2equipment, and for satellite operators selling bandwidth, it wouldbe wrong to be complacent. The history of TV broadcastingshows many examples of great technology which did notsucceed in the market place. However, most breakthroughs weresuccessful as a combination of multiple technologies allowingthe provision of attractive services which where hitherto notavailable for consumers. One of the best examples of this is therange of source and channel coding standards plus supporttechnologies defined by the DVB Project in the early 1990’sproviding consumers with a huge number of audio and videoservices with excellent quality, thereby driving the adoption of
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digital TV services in both satellite and cable networks. The key,therefore, is to look where such a combination is possible.
New ServicesGiven that consumers are willing to pay for high quality audio /video content, when the costs are considered to be reasonable –look at the explosive growth of DVD players – affordable flatpanel displays and High Definition TV programming is one suchcombination. As high quality HDTV displays drop below the $5000 mark, and AVC / WM9 video coding providing HDTVquality signals with bitrates below 10 Mbit/sec, it is likely that anew range of services will become available over the next 12 to24 months. Bitrates below half that required by MPEG2 videoencoding will allow either multiple HD streams per transponderor simulcasting of SD and HD streams.
Although these are premium services and still represent arelatively high investment on the part of the consumer, digitalcinema theatres, public viewing in pubs and clubs and early
adopters will be prepared to pay for these services. Such newservices will drive the adoption of AVC / WM9 equipment,especially at the consumer level, with backwards compatibilitywith MPEG2 services allowing existing services also to bereceived. As the volume of HD receiving equipment grows, thecost of the decoding silicon will reduce, not only for HD but alsofor SD receivers based on equivalent technology.
Both cable and in particular satellite operators have thenecessary bandwidth to support these services, and also have avested interest in using as far as possible all their availablebandwidth and offering services not available on otherbroadcast media where bandwidth is at a premium. Cost ofcontent production will be a key factor in the development of HDservices, however, the success of HDTV in the US indicates thatmarkets in other parts of the world will quickly develop. Premierein Germany has already held a pilot HDTV transmission togetherwith SES Astra for the 2004 NFL Super Bowl. Consider theinterest in seeing the next soccer World Cup finals to be held inGermany in 2006 worldwide in HDTV quality.
FEATURES
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Vol.2 No. 3 June 2004
Although the delivery of HDTV signals via cable, satellite andalso terrestrial broadcasting has been possible and indeedavailable for some time, AVC / WM 9 will make thesetransmissions more bandwidth efficient. However thecombination of new video encoding techniques plus the IPprotocol plus ADSL 2 / 2+ standards will enable reliable audiovideo services to be offered over existing copper telephone lineswhich has previously been impossible. The potential here mayrival and even surpass the success of DVB / MPEG2 basedsystems.
Since available bandwidths will remain in the 2 – 3 Mbit/secrange, it will be difficult to offer HD services without using localHDD storage. However, if the ADSL services are supported by asuitable network server architecture, it will be possible to offernot just NVOD or VOD but effectively EOD – Everything On
Demand. A number of trials are currently under way in the USoffering exactly this type of audio / video service. If such serverbased EOD services are successful, and there is no technicalreason why this should not be the case, this would represent asignificant shift away from the traditional linear programming andviewing model – each viewer can watch what he wants when hewants. The market potential and Telco interest in developingthese new services will probably be the primary driver for AVC /WM 9 encoding and decoding equipment over the next twoyears.
ConclusionIn conclusion, the replacement of MPEG2 as the dominant videocoding standard will not take place for a number of years yet.How existing broadcasters will migrate their legacy receivers
FEATURES
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Vol.2 No. 3 June 2004
FEATURES
David Gillies is the founder of the independenttechnology consultancy isis digital, based inMunich, Germany. With over twenty yearsinternational experience in R&D, management andoperations of digital TV systems, he specialises in helpingoperators and manufacturers identify the commercial andtechnical requirements to allow them to expand existingservices and define new services. He regularly presentspapers on topical issues at conferences in Europe, Americaand Asia. He can be reached at [email protected]
from MPEG2 to AVC / WM9 is a problem which is still a long wayoff. However, the new video coding technologies are poised tosupport the provision of HDTV services in Europe and Asia,where they are currently not available. There is also no reasonwhy such HDTV products cannot be offered in the Americas.But the major breakthrough for AVC / WM 9 will be theenablement in the provision of audio / video services via existingcopper lines, potentially rivalling and surpassing the success ofcurrent digital TV standards. For the consumer, the choice of hissignal delivery medium will become more difficult, and forbroadcasters and operators the choice of which delivery mediato support will become a critical business, rather than technical,decision.
Footnote:To finish, consider briefly the DVB-S2 standard included in theexample at the beginning of this article. Although one of themost technically advanced standards to be defined by the DVBProject, the lack of backwards compatibility which leads to thesignificant increase in channel coding efficiency may also be it’sdownfall. Although new services may consider using DVB-S2,the lack of the so called “neighborhood effect” - similar services
using the same technology on co-sited satellites – makes theselection of this standard for non contribution links difficult.Given the increased bandwidth efficiency now being offered withAVC / WM 9 video coding, it runs the risk of remaining a usefulchannel coding option without breaking through into the mainstream. Technical excellence alone is noguarantee of commercial success. SM
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Vol.2 No. 3 June 2004
NileSat Wants New SlotSeeks New Equity Partners
REGIONAL UPDATE
By Chris ForresterSatMagazine Editor forEurope, Middle East and Africa
Salah Hamza, NileSat’s chief engineer, says that with anotherpair of channels added in May, (taking its total to 218) the
two-satellite system is achieving better than 75% utilisation.NileSat has fired up one of its remaining transponders to copewith the growth in demand for capacity from Dubai (SamaCom isuplinking from Dubai’s Media City). Hamza, based at NileSat’sHQ in Cairo, says he expects this additional capacity to besoaked up within a year. “Our plan is to move our manycontribution services currently using our capacity to anothersatellite. These include contribution and point-to-point clientslike Orbit, Al Jazeera and Video Cairo, which occupy a pair oftransponders. We’ll lease capacity on another satellite for them.”NileSat operates two satellites from 7 deg West, and says oncethe non-DTH clients have been moved he’ll have about 4transponders free.
Hamza said that while this wasobviously a good problem to be facedwith, it also presented NileSat with thevery real challenge of adding to its in-orbit capacity. Other capacity, notablyoccasional use and internet point-to-point usage (MinaNet), could also befreed up, said Hamza. However, theShowNet internet-via-satellite service issafe, given that it is a long-termtransponder contract operated by asubsidiary of KIPCO in Kuwait.
Last year’s revenues were more or lessstatic, not helped by Egypt’s giantEgyptian Broadcasting Union publicbroadcaster reducing capacity from 3 to2 transponders, helped byimprovements in digital compression.ERTU have also somewhat modifiedtheirexpansion plans to more modest levels. This, and a few otherchannels falling by the wayside, meant revenues were constant.Hamza says that independent research gives NileSat an extra30% of viewing homes this recent spring, compared to 2003
(when the number was then more than 7m homes). “We nowhave more than 9m homes, or probably at least 50m people,”says Hamza.
Hamza admitted that very real pressure existed onNileSat to come with additional orbital capacity.“It takes two to three years to build a satellite,and to be candid we don’t have that luxury. Weare working on two parallel options. We haveapplied to the ITU more than a year ago for a totalof four new slots, but everyone knows how longthis process can take.” He says it would bepremature to disclose NileSat’s favoured spot,but clearly an option with minimum co-ordinationdifficulties would be preferable. NileSat has alsolong sought extra capacity from 7 deg West, butthe French authorities (looking after Eutelsat’sinterests) have their Telecom 2D sitting at 8 degWest, and Eutelsat’s Atlantic Bird 2 also at 8 degW, which would need co-ordination with anyplanned expansion by NileSat. “In our position atNileSat we have very good relations with ouradjacent neighbours, and by and large we are not
seen as directly competing.”
NileSat first pair of satellites were sourced from Matra Marconi(now part of Astrium), with NileSat 102 being fast-tracked inabout 17 months. “We will go to tender, and the usual suppliers
NileSat HQ
NileSat Chief Engineer Salah Hamza
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Vol.2 No. 3 June 2004
FEATURESREGIONAL UPDATE
can be expected to respond. Buying a medium sized satellite is alittle easier these days because the parameters are so wellunderstood. We shall not be specifying complicated options orfeatures.” Also in Hamza’s thoughts is the replacement schedulefor NileSat 101, with an expected end-of-life around 2013 (shewas launched in April 1998). Hamza says extending the numberof frequencies by using Ka-band is an option for NileSat 103,and the eventual replacement of 101, and Ka-band filings coverthis expansion.
Financing the third satellite might also present something of achallenge, says Hamza. “The position in Egypt with exchangerates and generation of hard currency is a problem. We are a USdollar company, and their investment would have to be in dollars.For any bank their budget for investment in companies like oursis limited. There is a chance, of course, but what we a looking foran equity partner perhaps taking 50% of the new craft, or buyingnew shares or some other similar financial participation.” Hamzaadmits that vendor financing is another possibility, both for anynew satellite and its associated launch costs. “One way oranother we’ll get this done.”
NileSat’s timetable is somewhat dependent on determining theorbital position, but Hamza says the company is movingpositively forward. “We’d like to have a craft in position inplace during 2006, and we know it is tight, but we are optimistic.We know there will be pressure from Arab entrepreneurs in theregion who want to start broadcasting. Look what hashappened on the Middle East music scene where we are nowcarrying more than 10 music channels. They have created awhole industry behind them, of people creating music clips andpromotional videos, they need production, and engineers andcreative skills. We have helped create a new market, newsingers, news stars, and it is very satisfying.”
NileSat has been prepared to help embryonic broadcasters outby taking shares in certain private channels, and this optionremains, says Hamza. “In reality, most of these channelsrepresent a long-term investment and profit might be some timedown the road.” SM
NileSat Shareholders*
Organization %
Egyptian Radio & TV Union (ERTU) 40Egyptian Co. for Inv. Projects (ECIP) 9Arabian Org. for Industrialization (AOI) 10National Bank of Egypt (NBE) 7.5Cairo Bank (BDC) 7.5Public Shareholders 14.2National Investment Bank 7.6Others 4.2Total 100.00*Data: Company
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Vol.2 No. 3 June 2004
EXECUTIVE SPOTLIGHT
Interview with SES AMERICOMSVP Bryan McGuirk
At the recent NAB show in Las Vegas,SES Americom Senior Vice-President
for Domestic Satellite Services, Bryan A.McGuirk spoke very candidly withSatnews Managing Editor, Virgil Labrador,about their vision and plans for the NorthAmerican market. Appointed to hisposition only last October 2003, McGuirkhas an extensive background in thebroadcast industry. An Atlanta, Ga.native, McGuirk has an impressivebroadcasting pedigree. Before joiningSES Americom he was President,Programming and Advertising ofCalifornia-based OpenTV, where he wasat the forefront of many interactiveprogramming developments for bothadvertisers and programmers. He hasalso worked at TViFusion, a digital cablenetwork development and operationscompany; NBC Television Network, inboth affiliate relations and sales; NBC Asia; Turner International, launching CNN,TNT and Cartoon Network in the Asianmarkets. Excerpts of the interview:
For the benefit of our readers, can youtalk about your new position and whatare your responsibilities and the areasthat you cover?
I’m responsible for domestic satelliteservices in North America and thatincludes the Media Group which is all ofour broadcast and cable programmingbusiness, along with a large radiopresence.
It also includes our Enterprise Group , nowrecently renamed Broadband Solutions.That’s been a growing area. We docustom and semi-custom solutions forcorporate America and also we sellthrough VSAT resellers and and that’sbeen a good business for us.
The third area I am responsible for is Direct to Home (DTH) through ourAmericom2Home service. That obviouslyhas been a growing business. We’ve beenbuilding our presence at 105.5 degreesspot as a major DTH player.
What area are you focusing more?
We have a strong presence in all areasbut I can tell you that we are very excitedin the broadcast segment. Since we arehere at the NAB I want to talk a bit aboutthe kinds of projects that we’ve been doingfor our broadcast and cable programmingclients. In the broadcast segment, wehave our ACE project which we are doingwith PBS. It is really a next generationmonitoring, control and playout systemfor broadcast groups.
This system is a two-way VSAT networkthat allows PBS headquarters to monitorall of its local affiliate stations. And ituses the back channel to look at MPEG4thumbnails of the various stations’broadcasts along with full data of thestations’ play list. Basically they canmonitor actively and passively anystation in the area. So this is a realbreakthrough in terms of what could bedone in this kind of remote playoutscenario. I think this is going to besomething that could migrate to otherbroadcast groups and build on PBS’leadership. PBS has been a leader in HighDefinition (HD) and now is a leader inthis area.
ACE is really the first MPEG4 end-to-endplay out and monitoring system that Iknow of. So I think it’s a real first in theindustry and our team’s been working ayear on it. It’s very exciting.
Can you talk about SES Americom’sefforts in the HD arena?
HD has been a big effort for us . I’vebeen truly moved by the amount ofprogress that has been made in theindustry in terms of focus from theproduction community, the operators,and now the growing demand fromconsumers. So the game has changedjust in the past year. HD is no longersomething that is coming, it’s somethingthat is here.
We recently launched AMC 10 and 11which are digital satellites and we createda dedicated HD neighborhood called HDPRIME.
How is your HD neighborhood differentfrom your competitors’?
It’s a friendly competition but I can tellyou that we’re the best, without
Bryan McGuirk
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Vol.2 No. 3 June 2004
“...HD is becoming the not just theunusual band--it will become thestandard band. Once consumers seeit, they really don’t want to getback...”
EXECUTIVE SPOTLIGHT
reservation. And that comes down inseveral ways. If you’re broadcasting HDfirst, you want to put your mostexpensive programming in front of themost people possible right? Our networkhas the broadest reach. We have a 100percent cable reach—which is the uniquefeature of our network from ourcompetition. Beyond that we have thebest network. We got all the VIACOMnetworks, all the Discovery networks,Scripps networks, Weather channel,among others.
I come from the programming world,and the fact that we’ve got 100 percentcable distribution and that we’ve gotthe best neighborhood, are two of themost critical elements for programmers.
And lastly, we’ve got the best andmost dependable satellites. TheLockheed Martin 2100 series has aheritage of excellence in this business andwe’ve taken it to the next level with newsatellites with linearized SSPAs, twentypercent more power and they’re digitallyoptimized. That’s why I think we’re theeasy choice for people working on HD.
Do you compete with other HD viasatellite offerings like Rainbow’sVoom?
I see VOOM as a great development. Isee it as one of a landmark, kind of awatershed event in this industry. They’reoffering 35 HD channels. It’s really a gamechanger for consumer choice in creatingthat demand and content that will growHD as a category. Right now there isreally five or seven offerings in most HDpackages. And Voom has 35. This willspur the competition for HD. I think theVOOM decision is right on.
What is the thinking behind SESAmericom’s strategy to go into theconsumer market?
Strategically, Americom2Home was thevision of our CEO Dean Olmstead , which
was to create an agnostic platform at105.5 slot , delivering DTH services toUnited States. And we have had this inplace for almost two years now andduring that time we really have becomepart of the fabric of the industry. We haveshown that our value-added approach tothe DTH market is having impact. And Ithink our recent announcement of ourpartnership with Echostar really embodiesthat vision.
Do you see your going into the consumermarket as a departure from thetraditional services that the satelliteoperator provides?
We don’t see it as a departure. We see itas a natural evolution. It really is againpart of Dean Olmstead’s vision to focuson high growth markets; understandcustomers more deeply than we didbefore and provide solutions that reallydrive the market. We’re partnering in a waythat we’re bringing our assets moredirectly to bear in order to take advantageof opportunities.
Wha do you see as the driving force in theindustry today?
In the broadcast arena I think HD willcontinue to be a driver. HD is becomingthe not just the unusual band-it willbecome the standard band. Onceconsumers see it, they really don’t wantto go back. We will continue to focus onHD.
What I also see in the broadcast arena isan opportunity not just in genericdelivery but also in integratedtechnological solutions that combines
MPEG4 technology with event transport.That really helps change the work flowdynamic within a broadcast station. Andthat’s something new. I think that ourACE technology is kind of harbinger ofthings to come in this area.
How will your recent purchase ofVerestar impact your plans for theregion?
The deal has not closed yet (it is subjectto regulatory approvals) so I can’t jump
the gun. What I can say is that wesee them as a great company with agreat selling approach. We look atthem as a great fit with the directionwe are going, moving down thevalue chain, delivering solutions tovertical markets.
How do you view the recentchanges in North American market, suchas the closing of Intelsat’s purchase ofLoral’s North American satellite assets?
It’s clearly a market in transition. In alltransitions, there is danger andopportunity. For us we see this as a majoropportunity. The difference between usand the competition is that we are afocused satellite conglomerate. That isthe key. We’ve gone through thosetransitions already a few years ago. Andnow we’re executing. We have a long-term vision and capital that can reallycontinue to put distance between us andour competitors.
Is there anything else you want to add?
You are familiar with our recentannouncement of our deal with NBC (NBCsigned a multi-year, multiple Ku-bandtransponder renewal agreement-Ed.) itshows the momentum we’ve been talkingabout. It’s quite real and very exciting.HD PRIME has a big impact. Since we’velaunched it, our pipeline of HD servicesand partners has increased dramatically. Ireally believe HD is a big deal for ourindustry. It’s going to be very good forsatellites. SM
TheIndustry
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Vol.2 No. 3 June 2004
MARKET INTELLIGENCE
Satellite Interoperability
BY Jack BuechlerChairman, GVF Technology Working Group andChris BaughPresident, Northern Sky Research
Satellite interoperability is escalating in importance as a – andpossibly the – key consideration in this and next year’s
business development plans for the international industry.There are several factors currently forcing the issue.
• Rising Volumes: Massive satellite system rollouts arescheduled this year, and service providers have begunplacing sizeable orders for open-standard terminals tobe deployed commercially in Africa, the Middle East,the Americas, Asia, North America and Europe. Morethan 100,000 DOCSIS-based units have now beenordered, and thousands of DVB-RCS earth stations arealso slated for delivery.
• Hybrid Verticals: The industry’s systems and servicesare increasingly being seized upon for applicationsserved by hybrid solutions, including satellite-basedWi-Fi, GSM, cable, and fibre, with broader implicationsfor interoperability. (One global satellite operatorreported double-digit percentage growth in revenuesfrom the GSM sector in 2003… justfrom Africa!)
• Market Dynamics: As open-standard satellite systems such asDVB-RCS - and would-be de factostandards such as DOCSIS - gainin worldwide prominence, would-be end users and governmentpolicy makers have begunstipulating interoperable satellitesystems in international tenders.
At present, the industry is assessing theimmediate implications for the satellitecommunications business and is evaluatingwhich technical approach most effectivelysupports the continued growth of thesatellite communications business. The
industry also must examine the role of proprietary systems in thenext generations of satellite networks.
Let us examine the case of DVB-S2. Now, on the tenthanniversary of the ratification of the satellite broadcast andcommunications industry’s DVB-S standard, DVB-S2 has beendesigned to promote the development of interoperable servicesand technology, and deliver significantly higher throughput in agiven amount of satellite transponder bandwidth in comparisonwith its precursor, the DVB-S standard.
DVB-S2 aims to address the requirements of consumer direct-to-home broadcasters and set the stage for a paradigm shift in thedelivery of broadband interactive services via satellite. NorthernSky Research shows that 70% of chipset vendors, equipmentsuppliers and system integrators will launch DVB-S2 compliantproducts in the next 24 months in one of three target markets:broadcast applications, interactive services and professionalsystems. Additionally, DVB-S equipment revenues in 2004 willreach an estimated US$450 million with professional systems andbroadcast applications accounting for approximately 45% of thetotal.
Over the next five years, these market segments are likely to growmore slowly than interactive services and an increasingproportion of satellite broadcast and communications equipment
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Vol.2 No. 3 June 2004
MARKET INTELLIGENCE
deployed may well comply with the new DVB-S2 standard.Although receiver chipsets are not likely to be commerciallyavailable until the end of 2004 and products will probably not beon the market before the second quarter of 2005, projectedannual DVB-S2 compliant equipment revenues are expected toreach US$1.3 billion by 2009, with interactive servicesaccounting for almost 70% of the total. CAGR of 80-100% areexpected given the tremendous economic incentive for satelliteoperators and service providers to reduce the per-subscribercost of space segment and terminal equipment.
Interactive mode DVB-S2 receiver chipsets (i.e. devices thatinclude adaptive coding and modulation features) are expectedto be priced at less than US$50 in small volumes and less thanUS$15 in large volumes. Although twice as expensive as thebroadcast mode, such pricing is attractive to companiesdeveloping two-way broadband satellite systems even withoutaccounting for the potential increases in system capacity. It isimportant to note that pricing is highly volume dependent, andthe lowest price points will only be achieved if satellite serviceproviders are able to penetrate the consumer and small businessmarkets.
Over the past ten years, researchers have continued to developmore spectrum-efficient transmission and compressiontechnologies. For broadcast applications such as business TV(BTV), the result is a potential three-fold increase in satellitetransponder utilization. That is to say, only one-third of thebandwidth is required to achieve equivalent picture quality andinterference robustness.
For interactive services such as high-speed Internet access, theresults are even more profound. With the right combination ofadaptive coding and modulation techniques, Ka-band spacesegment and web acceleration technologies, it is possible toincrease broadband satellite system capacity by 150% to 450%and reduce service provisioning costs so dramatically that aviable business case now exists for addressing consumer andsmall business customers in addition to large enterprises.
Will DVB-S2 technology ever really be able to penetrate theconsumer market for two-way broadband services via satellite?
Both consumer broadband plays leverage Ka-band spacesegment and dynamic rain fade compensation techniques inorder to maximize the available system capacity. If either of themproceed and standardize on DVB-S2 compliant technology, it willgreatly accelerate market uptake and the growth of equipmentrevenues. Higher manufacturing volumes will also help to drivedown the cost of DVB-S2 receiver chipsets and foreshadow their
ubiquitous integration into a wide range of satellite broadcastand communications equipment.
The GVF Technology Working Group, formed early in 2004, aimsto explain the key issues surrounding these technologicaladvances to interested parties throughout the burgeoningsatellite service end-user communities. The Forum takes aneutral stance as to which technology will command the market,but will always continue in its wide range of activities toexpound the benefits and capabilities of satellite technology as awhole, together with the unrivalled range of cost-effectiveapplications it can service.
Shortly, the GVF will be further developing its website atwww.gvf.org in order to facilitate access to technology andservice related information required by end-user and othervisitors.
The GVF Technology Working Group is focusing on gettingacross the message as to which technologies are available, notproviding tips on which may be the fastest horse. The Groupwill be producing explanatory guides on the varyingtechnologies, enabling potential end-users to identify thesolutions best-suited to their respective needs. This GVFTechnology Resources Portal will facilitate contact with thecorrect vendor(s) quickly, efficiently and reliably. SM
The Global VSAT Forum is an association of key companiesinvolved in the business of delivering advanced digital fixedsatellite systems and services to consumers, and commercialand government enterprises worldwide. The Forum isindependent and non-profit and has a global remit. It is also non-partisan - any companies or organisations with an interest inthe VSAT industry are encouraged to join. For moreinformation go to www.gvf.org or e-mail:[email protected]
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Vol.2 No. 3 June 2004
STOCK MONITOR
APT SATELLITE HOLDINGS ATS 1.72 1.59-4.60ANDREW CORP. ANDW 19.5 8.798 - 21.67ASIASAT SAT 15.99 14.31 - 22.80BALL AEROSPACE BLL 67.56 42.30 - 71.30BOEING BA 45.88 31.00 - 46.62BRITISH SKY BROADCASTING BSY 44.65 40.07 - 59.24CALIFORNIA AMPLIFIER, INC. CAMP 7.65 3.07 - 17.20COM DEV INTL CDV.TO 3.18 0.92 - 3.60COMTECH TELECOMMUNICATIONS. CMTL 17.81 13.62- 39.52DIRECTV GROUP DTV 17.5 14.70 - 18.81ECHOSTAR DISH 31.71 29.27 - 41.00FREQUENCY ELECTRONICS INC. FEI 14.25 8.95-17.13GILAT SATELLITE NETWORKS GLTF 5.73 3.60 - 9.86GLOBECOMM SYSTEMS INC GCOM 5.74 2.96 - 7.29HARRIS CORPORATION HRS 45.85 28.70 - 51.19HONEYWELL SPACE SYSTEMS HON 33.2 25.94 - 37.65INTEGRAL SYSTEMS INC ISYS 16.61 16.05 - 22.12KVH INDUSTRIES INC KVHI 13.28 12.36 - 34.729L3 COMMUNICATIONS LLL 63.71 41.63 - 64.32LOCKHEED MARTIN LMT 49.11 43.10 - 55.00NEW SKIES SATELLITES NSK 8.05 4.49 - 8.16NEWS CORP NWS 36.39 29.56 - 39.74NORSAT INTERNATIONAL INC. NSATF.OB 0.59 0.38 - 1.06NTL NTLI 58.95 0.38 - 1.06ORBITAL SCIENCES CORPORATION ORB 12.84 5.68-14.00PANAMSAT SPOT 23.14 13.80 - 26.01PASIFIK SATELIT NUSANTARA PSNRY.PK 0.14 N/APEGASUS COMMUNICATIONS PGTV 15.43 11.70 - 51.00QUALCOMM, INC. QCOM 68.05 32.55 - 69.38RADYNE COMSTREAM RADN 8.93 2.02 - 13.426SCIENTIFIC-ATLANTA SFA 34.76 19.46 - 38.59SIRIUS SATELLITE RADIO INC. SIRI 3.17 1.40 - 4.20SES GLOBAL SDSFa.F 6.39 5.17 - 8.85TRIMBLE NAVIGATION TRMB 26.77 13.48- 28.78VIASAT VSAT 23.3 12.20 - 28.91XM SATELLITE RADIO XMSR 25.24 9.25 - 30.96
Company Symbol Price 52-week Range(June 1)
ADVERTISER’S INDEX
(Click on the page no. to go directly to
the ad; click on the url address to go to
website)
ANACOM 18www.anacominc.com
Comtech EF Data 16www.comtechefdata.com
GLOBAL LINK 9www.satnews.com/globallink
ISCe 2004 4www.isce.com
Int’l Satellite Directory 25www.satnews.com/products/directory.htm
MITEQ 20www.miteq.com
ND SATCOM 19www.ndsatcom.com
PanAmSat 7www.panamsat.com
Paradise Datacom 10www.paradisedata.com
PROMAX 22www.promax.es
PTC 6www.my2004.org
SES GLOBAL 5www.ses-global.com
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