satellite manufacturing: new reality the - satmagazine for marketing new technical achievements,...
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WORLDWIDE SATELLITE MAGAZINE August 2003
The NewReality inSatelliteManufacturing
Satellite Manufacturing:The New Reality
CONTENTS TABLE OF Click on the title to go
directly to the story
COVER STORY
9 / The New Realityin SatelliteManufacturing
16 / Evolving SatelliteApplicationsin TelevisionBy Dan Freyer
28/ Indian TVin a MessBy Chris Forrester
21 / SatelliteChallenges andSolutions Cross AllBorders: A CaseStudy in AfricaBy Howard Greenfield
3 / Note from the Editor4 / Calendar of Events5/ Industry News7 / Executive Moves23/ Technical Tutorial: Internet Via Satellite--IP Overview30/ Advertisers’ Index31/ Vital Statistics: World DTH Subscribers32 / Market Intelligence: Turkey (presented by the Global VSAT Forum)
REGULAR
9 / ISCe 2003: WhereInnovative SatelliteTechnologies andBusiness Meet
As broadcast and cablenetwork, program, spot andpromo acquisition anddistribution are increasinglybeing managed in digital fileformats , televisionoperations are increasinglyusing satellite enterprisenetworking technologies.
While Silicon Valley andEurope are typecast as thecenters for marketing newtechnical achievements,satellite delivers thebenefits of those effortsaround the world, acrossall borders.
The International Satellte& Communicationsexchange (ISCe)Conference and Expo isthe premier West Coastannual event to be held atLong Beach, Californiafrom August 18-21 at theLong Beach ConventionCenter.
VIEWPOINT DEPARTMENTS
20/ DTH in Spain:“Savings on SatelliteTransmissions”By Chris Forrester
FEATURES
If the 1990s were thedays of superexpansion in satellitedevelopment, then thecurrent decaderepresents a newreality – or realism –for manufacturers andtheir customers.
FEATURED EVENT
By Bruce Elbert
A recent major report onSpain’s Sogecable fromMorgan Stanley praisesthe company’s businessplan for the now mergedformer pay-TV rivals, ViaDigital andCanal+Espana/Canal Satelite Digital.
First it was the ‘will they,won’t they’ legislation topermit DTH operators tobeam signals into India.Then it was the notoriousConditional AccessSystem rules. The IndianTV regulatory scene isdifficult to follow even forseasoned observers.
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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
NOTE FROM THE EDITOR
Baden WoodfordAfrica
Advertising Sales:Jill Durfee([email protected])Joyce Schneider([email protected])
Summer of our DiscontentSummer of our DiscontentSummer of our DiscontentSummer of our DiscontentSummer of our Discontent
Copyright © 2003Satnews PublishersAll rights reserved.
Cover Image: Boeing SatelliteSystems’ MEASAT-3 (imagecourtesy of Boeing )
EDITORIAL
Silvano PaynePublisher
Virgil LabradorManaging Editorand Editor, The AmericasChris ForresterEditor, Europe, Middle Eastand Africa
Stuart P. BrowneEditor, Asia-Pacific
Contributing Writers:
John Puetz, Bruce ElbertDan Freyer, Howard GreenfieldThe Americas
Peter Marshall, Roger StanyardEurope
of bad news and going through one of the worstdownturns in the satellite industry. The previousspring actually brought optimistic news andprognoses for the future of the industy. The SatelliteIndustry Association in its annual industry survey(see the feature in our April 2003 issue) reported that
the industry as whole grew by 10% percent from the year before and anaverage of 15% in the last five years. As we head into the much awaitedsummer vacation season, the consensus seems to be that the worse is overand that the corner has been turned.
But recessions don’t take vacations. In the last month we received news ofLoral filing for bankruptcy and selling off its North American satellite assetsto INTELSAT, leaving one less global satellite operator. Almost across theboard, 2Q and first half corporate financial results reflected either losses ordrops in revenues. The clincher, was the $ 1.1 Billion charge taken by Boeingdue to continued losses in its satellite manufacturing and Delta rocketdivisions. The losses led to Boeing’s decision to get out of the commericallaunch business and focus on government business due to “weakeningdemand.”
Commenting on the fateful decision, Jim Albaugh, president and chiefexecutive of Boeing’s Integrated Defense Systems, couldn’t have put itmore succintly: “In the commercial space segment, we’ve seen the market dipto historic lows and do not expect a near-term recovery.” He further saidthat he doesn’t see any increase in demand in three or more years.
Now when one of the major players does not see any recovery any timesoon, and decides to pull out from a major segment of the industry, itusually portends difficult times ahead. Not just for that particular segment,ie. the launch business, but for the whole industry. For as you all know theweakened demand for launches is due to fewer satellites being ordered andmanufactured, which is due to less demand for transponders which is due toless demand for satellite services and so on and so forth...
For our part, we hope to ride this downturn out no matter how long it takes.We hope to provide relevant information and analyses to guide the industy.It is apropos that in this issue we focus on the core of the industry--thesatellite manufacturing business (which started it all). We also have articlescovering every corner of the globe--from DTH in Spain to Indian television.We also have a case study in Africa of how a major DBS company is helpingspread the benefits of satellite technology to African villagers. To me,worthwhile intiatives such as these serve as a constant reminder why Iremain in this industy over the years--through its inevitable ups and downs.
L ike most people, I was looking forward to anreinvigoratingly uneventful summer after months
(In addition to managing editor of SATMAGAZINE, Virgil Labrador is theeditor of the subscription daily service, Satnews Daily and the free weeklywebsite, Satnews Online. He can be reached at [email protected])
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CALENDAR OF EVENTSAUGUST
August 18-21 Long Beach, California, USA ISCe 2003contact: Art Paredes Tel: +1-310-410-9191 / Fax: +1-310-410-9396 E-mail: [email protected] Web: www.isce.com
SEPTEMBER
September 2-7 Istanbul, Turkey CeBIT Bilisim EurasiaTel: +90 212 212 3122 Fax: +90 212 212 3121Email: [email protected] Web: www.cebitbilisim.com
September 11-16 RAI Convention Center, Amsterdam IBC 2003Email: [email protected] Web: www.ibc.org
September 16-19 London, UK COMSYS VSAT 2003 ConferenceTel: +44-1727-832288 E-mail: [email protected] Web: www.comsys.co.uk
September 18-23 Shanghai, China CeBIT AsiaTel: +86 21 6886 3286 / Fax: +86 21 6886 3797 E-mail: [email protected] Web: www.cebit-asia.com
OCTOBER
October 2-4 Vicenza Fair, Italy SatExpo 2003Tel. +39 0444 543133 E-mail: [email protected] Web: www.satexpo.it
October 12-18 Geneva, Switzerland ITU Telecom World 2003Tel. +41-22-730-6161 Fax +41-22-730-6444 E-mail: [email protected] Web: www.itu.int/world2003
October 14-17 Washington, D.C. Satellite Uplink Operators Training SeminarTel. 202-429-5346 Web: www.nab.org/scitech/satsem2003.asp
October 15-17 Mumbai, India Satellite & Cable TV India Trade Show 2003Tel: +91-22-2494 8280 /+91 -22- 2498 4273 Fax no: +91-22-2496 3465E-mail: [email protected] Web: http://www.scatmag.com
October 23-26 Istanbul, Turkey Cebit Broadcast, Cable and Satellite EurasiaTel: +90 212 245 3778 Fax: +90 212 245 3603 E-mail: [email protected] Web: www.hannovermesse.com.tr
October 28-30 Beijing, China China Satellite 2003Tel: +86-10-84470266, 8447-0926 Fax: +86-10-84470267E-mail: [email protected] Web: www.chinasatellite.org
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INDUSTRY NEWSU.S. Air Force SuspendsBoeing’s Eligibility forGovernment Contracts; ShiftsSeven EELV Rocket LaunchContracts to LockheedMartinThe U.S. Air Force suspended threebusiness units of Boeing’sIntegrated Defense System divisionand three former Boeing employeesfrom eligibility for new governmentcontracts. The suspensions wereissued against Boeing’s LaunchSystems, Boeing Launch Servicesand Delta Program business units asthey existed in the Boeingorganizational structure as of July21, 2003.
The individuals suspended wereWilliam David Erskine, formerground operations lead on Boeing’s
Evolved Expendable Launch Vehicle( EELV) program; Kenneth V.Branch, former senior engineer/scientist on Boeing’s EELV program;and Larry Dean Satchell, a formermember of Boeing’s EELV proposalteam.
The Air Force also shifted sevenEELV launch contracts worth anestimated $ 1 billion awarded inOctober 1998 (known as “Buy I”) toLockheed Martin, increasing thenumber of Atlas V launches of theBuy I program to 14. The Air Forcealso announced the award of threeEELV Buy II launch contracts toLockheed Martin, disqualifyingBoeing.
The suspensions come on the heelsof Boeing’s announcement of a $1.1
Billion charge to its satellite andlaunch units. The unprecedentedcharge also resulted in Boeingceasing commercial operations of it’sDelta rocket division andreorganizing the Expendable LaunchSystems division, placing it underthe Air Force Systems division tofocus on Air Force contracts.
Satellite Operators’ RevenuesFall by 6% in 2002
Consolidated revenues of fixedsatellite service (FSS) operators fellby 6% to $6.3 billion in 2002according to Euroconsult’s 10th
edition of the World SatelliteCommunications & BroadcastingMarket Survey.
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For the first time in its history, theFixed Satellite Service (FSS) industryexperienced two consecutive yearsof decline (-3% in 2001) due to acombination of stagnanttransponder demand (+ 1.5%between 2000 and 2002) anddecreasing transponder lease prices(-7% on average transponder leaseprice between 2000 and 2002).
Despite the decline in revenues inthe past two years, the FSS industryremains a profitable business,according to Euroconsult, withaverage industry margins in 2002 ofabout 73% for EBITDA, 38% foroperating profit (EBIT), and 24% fornet profit. (www.euroconsult-ec.com)
Loral Files for Bankruptcy;Sells Six North AmericanSatellites to IntelsatLoral Space & Communications Ltd.filed voluntary petitions forreorganization under Chapter 11 ofthe U.S. Bankruptcy Code. Loralsaid thate bankruptcy filing was aprecondition to the sale of six of itsNorth American telecommunicationssatellites to Intelsat, Ltd. for up to$1.1 billion in cash subject to priceadjustments based on Loral’s abilityto achieve specified operatingparameters prior to the close.
Loral intends to reorganize aroundits remaining fleet of five satellitesserving Latin America, Asia andEurope and its satellitemanufacturing operations, SpaceSystems/ Loral. The Chapter 11filing, made in the U.S. BankruptcyCourt for the Southern District ofNew York, will enable Loral to sellthe six North American satellites freeand clear of any encumbrances.
Through its Skynet subsidiary, Loralwill continue to operate anintegrated fixed satellite and networkservices business using its fleet of
five telecommunications satellitesand its established VSAT/fiberglobal network infrastructure. TheLoral fleet will consist of the Telstar10, 11 and 12 satellites currently inorbit and Telstar 18/Apstar V andTelstar 14/Estrela do Sul, which arescheduled to be launched within thenext nine months.
Loral has been heavily affected bythe downturn in the satellite market. It lost $1.47 Billion in 2002 on $ 1.10billion in sales. Loral also heavilyinvested in Globalstar Ltd, a satellitephone company that lost over $ 4Billion dollars.
Huge Losses on FailedChannelsPay-television is an important andgrowing market already worth morethan €20 billion in Western Europe,and it will more than double thisfigure by 2008. If T-commercerevenues are included the figure willtriple by 2008 to over €75 billion,according to a recent report.However, there is also a growingcost associated with channels thatfail.
Pay-TV channels are failing becausethey have not producedprofessional business plans. Thestudy (Pay-TV Business Planning,published by InternationalMarketing Reports, www.im-reports.com $745) states that dozensof Pay-TV channels have failedbecause the business models havenot been properly researched andimplemented. Report author DavidBrown says that in the past six yearsthere have been more than 150 failedchannels across Europe that havecost investors more than $3 billion.Most of the lost money could havebeen saved had a proper businessplan been formulated, says Brown.
“Obviously economic conditions inthis industry are tough at themoment, but in many cases, channeloperators are not giving themselvesa chance because their costs are toohigh for the business models thatthey are following.”
Some channel failures in Britainrecorded losses of over £30 million,says the report. But even on thebasis of an average loss of £10million to £15 million (new ventureAttheraces, for example, lost £11.1min the 12 months to 31 December2002) this means that £300m to£450m has been poured down thedrain. Taking European as a wholethe wastage adds up to Euros 2.25billion to Euros 3.5bn.The report highlights and analysisthe structure of a potentialbroadcaster’s business plan, alongwith the various revenue optionsopen to niche broadcasters, as wellas giving guidance to sensiblyforecasting what the differentincome strands might be. Detailedcosts on getting a signal to viewersare also tabled.
INDUSTRY NEWS
The Cost of Failure • 30 channel closures in the UK over the past six years.
• Approximately 150 closures in Europe over the same period• Each channel closure represents at a conservative estimate, at loss of £10m to £15m• Wasted investment in the UK over past 6 years approx £300m to £450m• For Europe approx: £1.5bn to £2.25bn
• On an annual basis this is: UK: £50m to £75m, Europe: £250m to £375m
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EXECUTIVE MOVES
SatlynxAppointsPaulHeinerscheidas Presidentand CEO
SATLYNX, ajoint venture between SESGLOBAL, Gilat Satellite Networksand Alcatel Space, has appointedPaul Heinerscheid President andCEO.
Heinerscheid was a pioneer in thedevelopment of direct-to-homesatellite TV services in the UnitedStates with USSB (United StatesSatellite Broadcasting). His otherformer responsibilities include:Founder, President and CEO ofSatellite Network Systems, Inc;Managing Director and CEO ofGlobal Radio S.A.; Vice President,Operations and Business Manager,USTV , Attache de Direction atCLT-RTL (today RTL Group),Guest Lecturer in the GraduateManagement Program at theUniversity of St. Thomas (US). Heis also the is also the HonoraryConsul of Luxembourg for the Stateof Minnesota.
Heinerscheid, 51, is a Luxembourgcitizen, holds an MBA from theHarvard Business School and aMaster of Science from the SwissFederal Institute of Technology.
Paul Heinerscheid
Gilat Names Bill Gerety,Former CEO of Astrolink, asNew Spacenet CEO
Gilat Satellite Networks Ltd. namedBill Gerety as the new CEO of its
Spacenet subsidiary. Gerety takesover from Nick Supron, who servedas Spacenet’s CEO for the last twoyears. The change was madeeffective on July 1.
During his tenure, Supron led asuccessful effort at Spacenet tooptimize operations, streamlineprocesses and increase efficiencies,in an effort to adapt the company tothe changing characteristics of themarket and business environment.Gilat said that Supron elected tostep down in order to spend moretime with his family and to pursueother business opportunities.
Prior to joining Spacenet, Geretyserved as acting CEO and ChiefOperating Officer of AstrolinkInternational, a broadband satelliteventure headed by Liberty Media,Lockheed Martin, TRW andTelespazio.
Gerety has also had a distinguishedcareer as a senior officer in the USArmy, and continues to serve as acolonel in the US Army Reserve. Heholds a BS from the US MilitaryAcademy at West Point, an MS inStrategic Studies from the US ArmyWar College, as well as an MS inContracts & AcquisitionManagement and an MBA from theFlorida Institute of Technology.
INTELSATAppoints DougTriblehorn andJean-PhilippeGillet to Mediaand EntertainmentBusiness Unit Doug Triblehorn
Intelsat has appointed DougTriblehorn and Jean-Philippe Gilletto head regional sales efforts for the
company’s Media and EntertainmentBusiness Unit in Asia and inEurope, Africa and the Middle East,respectively. Intelsat’s “VideoBusiness Unit” has recently beenrenamed the “Media andEntertainment Business Unit.”
Mr. Triblehorn, now Regional VicePresident Asia Pacific for Intelsat’sMedia & Entertainment BusinessUnit, is responsible for leading andmanaging sales activities in theregion to position Intelsat stronglyin the marketplace and achievegrowth objectives and profitability.
Prior to joining Intelsat, Mr.Triblehorn served as CEO,GlobeCast Asia Pte. Ltd. Based inSingapore, ,where he was principallyresponsible for implementing thestructure, strategy and businessdevelopment for GlobeCast’sinterests in Asia and overseeing alloperations, sales, marketing,financial and otheraspects of thecompany.
Mr. Gillet, nowRegional VicePresident, Europe,Africa and theMiddle East for Intelsat’s Media &EntertainmentBusiness Unit, isresponsible for the direction ofoverall development and executionof effective sales/customer servicestrategies for existing and potentialcustomers. Additionally, he is incharge of overall customerrelationship management anddevelopment of new business in theregions.
Mr. Gillet comes to Intelsat fromGlobeCast North America. Mostrecently, he served as Vice Presidentof International Sales where he
Jean-PaulGil let
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managed the strategy, developmentand sale of broadcast video servicesto all interna tional customers. Priorto that position at Globecast, hespent time as the company’sDirector of Sales for Europe and theMiddle East.
EXECUTIVE MOVES
Mary Salih Appointed asDirector of Broadcast Sales,GlobeCast America
Mary Salih has been appointed asDirector of Broadcast Sales atGlobeCast America. As Director ofBroadcast Sales, Mary Salih will beresponsible for building and managing GlobeCast’s broadcastservices worldwide including itsnews, cable, sports and specialevents customer base.
She will be based in the company’ssales and marketing office in NewYork City, which is newly located at1270 Avenue of the Americas, Suite2800, New York, NY 10020.
Mary possesses 15 years ofexperience in providing and sellingsatellite services to both thebroadcast and broadband markets.Prior to joining GlobeCast, she wasthe Director/European SalesManager at an international divisionof Vyvx Broadband Media Services,where she was responsible for salesto Europe, Latin America and theMiddle East. Mary Salih’s previousprofessional experience includesmanagement positions at LoralSkynet and AT&T. SM
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Where Innovative SatelliteTechnologies and Business Meet
International Satellite & Communications Exchange(ISCe) Conference and ExpoLong Beach Convention Center -Long Beach, CaliforniaAugust 18 – 21, 2003
Event Overview
The International Satellite &Communications exchange (ISCe)Conference and Expo is the premierWest Coast annual event thathighlights the innovation and use ofsatellite technologies and servicesin the global commercial,government and military sectors.
Spotlight Speakers, CompellingConversations
The lineup for ISCe 2003 includesmany of the top executives and mostrespected thinkers in the satellite
industry. They’ll share their viewson both the challenges andopportunities facing thisinternational business community.The sessions promise to be bothenlightening and interactive,providing participants valuableopportunities to engage with theirleaders, peers and constituencies inmeaningful dialog and leave theconference with tangible strategiesfor real-world success.
A sampling of the speaker roster forISCe 2003 includes:• Yousuf Al Sayed, CEO –
Thuraya SatelliteTelecommunications
• Lt. General Brian Arnold,Commander – SMC/CC
• Dr. Illhami Aygun, DirectorGeneral and CEO – EurAsiaSat
• Robert Berry, Chairman –Space Systems Loral
• Mark Bitterman, Chairman, USSpace Enterprise – US Chamberof Commerce
• Michael Butler, CEO – Inmarsat• Anita Cohen, Director, Office of
the Americas – NIMA• Mark Dankberg, Chairman and
CEO – ViaSat, Inc.• Ted Gavrilis, President –
Lockheed Martin CommercialSpace Systems
FEATURED EVENT
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• Keith Hall, VP – BoozAllen Hamilton (and formerDirector – NRO)
• David Helfgott, President &CEO, Government Services– SES AMERICOM
• Susan Miller, President,Government Services –Intelsat
• Elon Musk, Founder andPresident – SpaceExploration Technologies
• Dean Olmstead, Presidentand CEO – SES Americom
• Dr. William Patzert,Technology Transfer Office– NASA JPL
• Gino Picasso, CEO –Iridium Satellite
• Ramu Potarazu, Presidentand COO – Intelsat, Ltd.
• Rick Sanford, Director,Space Initiatives, Space &Defense Group – CiscoSystems
• Herb Saterlee III, CEO –DigitalGlobe
• Michael Shaw, Director,Radionavigation and GPS –US Dept. of Transportation
• Frank Stirling, ExecutiveDirector – Boeing DigitalCinema
• Gregory Withee, Asst.Administrator for Satellite &Information Services – NOAA
• R. James Woolsey, VP – BoozAllen Hamilton (and formerDirector – Central Intelligence)
Matchmaking Program
Unique to ISCe is its MatchmakingProgram, which creates andcoordinates opportunities forselected small businesses to meetwith representatives from theworld’s leading satellite, space andcommunications companies. Private
meetings between potentialbusiness partners will take place onAugust 19 and 20. All companiesinterested in participating in theMatchmaking Program must submita registration form, complete aprofile questionnaire and pay a one-time $99 fee for a maximum of threeon-site meetings to be arranged byHannover Fairs USA, the officialshow organizer.
Welcome Luncheon
Kicking off this year’s event will bea welcome luncheon – free for the
first 250 guests – on Monday,August 18. Hosted by theCalifornia Space Authority (CSA),the session will feature U.S.Representative Dana Rohrabacher.A Congressman who’s servedSouthern California since 1988, Rep.Rohrabacher currently serves as asenior member of the InternationalRelations Committee and Chairmanof the Space and Aeronauticssubcommittee of the powerfulHouse Science Committee. He’llshare with attendees his views onthe future of the space industry andCalifornia’s role in it. CSA is a non-
FEATURED EVENT
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Monday, August 18
9:30am -12:30pm
9:30am -12:30pm12:30pm - 2:30pm 2:30pm - 5:30pm
6:00pm - 7:00pm 7:00pm - 8:30pm 7:00pm - 8:30pm
Tuesday, August 19
9:00am - 10:15am
10:00am - 7:30pm10:15am - 11:00am11:00am - 12:30pm12:30pm - 2:15pm
2:15pm - 3:45pm 3:45pm - 4:30pm 4:30pm - 6:00pm 6:00pm - 7:30pm
Wednesday, August 20
8:40am - 10:15am10:00am - 5:00pm10:15am - 11:00am11:00am - 12:30pm12:30pm - 2:00pm 2:15pm - 3:45pm 3:45pm - 4:30pm 4:30pm - 6:00pm 6:30pm - 10:00pm
Thursday, August 21
8:30am - 10:00am10:00am - 2:00pm10:00am - 10:30am
10:30am - 12:00pm12:00pm - 1:30pm
PROGRAM SCHEDULE-AT-A-GLANCE
“Take-Off - Getting Up to Speed” Satellite Training Workshop (Hosted by the SatelliteIndustry Association and the Satellite Broadcasting & Communications Association)“Hands-On: Satellite Technologies at Work” (Hosted by the Global VSAT Forum)ISCe Welcome Luncheon (Sponsored by the California Space Authority)“Inside Scoop - One-On-One with Satellite Industry Leaders (Hosted by EdelmanPublic Relations)ISCe 2003 Opening CeremonyISCe 2003 ReceptionExhibit Hall Open
Welcome and Opening Keynote Session: “Global Assurance and Homeland Defense:Implications for Our Infrastructure”Exhibit Hall OpenRefreshment Break (Sponsored by Lockheed Martin Commercial Space Systems)Conference SessionsNASA and NOAA: Technology Partnership Forum and Luncheon(Sponsored by the California Space Authority)Conference SessionsRefreshment Break (Sponsored by Stellar Solutions)Conference SessionsISCe Reception
Welcome and Keynote: “Growth and Momentum - Key Drivers for the 21st Century”Exhibit Hall OpenRefreshment Break (Sponsored by Mobile Satellite Ventures)Conference SessionsVIP Luncheon (by Invitation Only) (Sponsored by Booz Allen Hamilton)Conference SessionsRefreshment Break (Sponsored by G2 Satellite Solutions)Conference SessionsISCe Reception and Awards Dinner (Sponsored by Boeing)
Welcome and Keynote Session: “Survive and Thrive - Global Alliance Strategies andTactics for the Satellite Industry”Exhibit Hall OpenRefreshment BreakConference SessionsCNN Special Session: The Use of Satellite Technologies During the War in Iraq
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profit organization that serves as thepolicy advisor to the Secretary ofthe California Technology, Tradeand Commerce Agency on all space-related matters and represents theState of California on space issuesto the international community,federal government, other states,and local and regional governmententities.
U.S.-Asia Satellite BusinessRoundtable
The satellite industry is inherentlyglobal in nature and continues toevolve into a tightly knitinternational community. Asia ishome to a concentration of satellitebusinesses and users, whichpresents great opportunity to U.S.companies and trading partnersworldwide. ISCe 2003 will feature anintensive two-part U.S.-AsiaSatellite Business Roundtable,hosted by the Asia-Pacific SatelliteCommunications Council (APSCC)and the Satellite IndustryAssociation (SIA).
Part one, “Opportunity Abroad:Prospects and Potential in Asia,” isan ideal venue for satellitemanufacturers, ground equipmentand services companies, and launchproviders to gain insights intoemerging business opportunitiesand market strategies in the Asianmarketplace. While the challengesand growing pains affecting thisregion have received muchattention, there is long-term growthpotential and important short-termconsiderations. Among the topicsto be addressed are the impact ofconsolidation in the telecomindustry, potential regulatorychanges, and the effects of theSARS epidemic. U.S. companiesinterested in pursuing business
opportunities or aligning strategicpartners in Asia should be sure toattend.
Part two, “Satellite Services:Growing Demand and UpcomingBreakthroughs in Asia,” will focuson many of the advances in next-generation satellite technologies –such as DBS, broadband andVSATS – that are being steered bythe Asian marketplace. Thisprovides great opportunity forsavvy satellite operators, contentproviders, and the services sector inthe U.S. Top executives from someof the leading companies helpingbuild consumer demand and createbusiness opportunities in the regionwill share their perspectives on thepossibilities of today and thepromises of tomorrow. This sessionis a can’t miss for anyone interestedin learning about and leveraging thegrowing demand for satellitebroadband, DBS, and voice, videoand data services in Asia.
Roundtable participants include:• Illhami Aygun, Director General
and CEO – EurAsiaSat• Christopher Baugh, President –
Northern Sky Research• Jeanette Chan, Partner – Paul,
Weiss, Rifkind, Wharton &Garrison
• Tom Choi, CEO – SpeedCast• Richard DalBello, President –
Satellite Industry Association(SIA)
• Kalpak Gude, Vice President ofGovernment and RegulatoryAffairs and Associate GeneralCounsel – PanAmSatCorporation
• Eui Koh, President – Asia-Pacific SatelliteCommunications Council(APSCC)
• K.C. Kuo, Vice President andGeneral Manager, Asia-PacificGroup – Hughes NetworkSystems International
• John Stanton, President ofData, Carrier and InternetServices – Intelsat
CNN Special Session: The Use ofSatellite Technologies During theWar in Iraq
Closing ISCe 2003 will be one of themost timely and compelling sessionsof the conference, “The Use ofSatellite Technologies During theWar in Iraq.” A distinguishedpanel of experts, in a conversationmoderated by CNN Headline NewsAnchor Renay San Miguel, willshare insights on how the recentwar in Iraq truly highlighted thevalue and advantages of satellitetechnologies and services. For thestrategist in the war room, pilot inthe air, soldier in the battlefield,reporter embedded with the troops,and viewer watching the war ontelevision as never seen before,satellite technologies proved to be atremendous asset. Come hear theproviders and users of thosetechnologies share firsthandexperiences and lessons learned.Gain insights into the role satellitesplayed in applications such asnavigation, remote sensing,communications and broadcastingduring this war and the ways inwhich our military and media may be
FEATURED EVENT
REGISTRATIONTo register for the event or for more information on attending orexhibiting at ISCe 2003, visit www.isce.com or call +1- 310-410-9191.
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COVER STORY
The New Reality in the SatelliteManufacturing Segmentby Bruce ElbertPresident, Application Technology Strategy, Inc.
decade represents a new reality – orrealism – for manufacturers and theircustomers. Those of us who havebeen in this industry for somedecades have seen the spacecraftpurchase cycles come and go, thisone being no different in manyrespects. What is unique, perhaps,is the shear volume of satellitecapacity now in orbit and the depthand variety of applications thussupported. But, this is littlerecompense for the majormanufacturers who depend on neworders and backlog to maintain theirorganizations, revenues and profits,and R&D.
A More Level Playing Field
Having been part of the old HughesAircraft Company, I can look back tothe “good old days” when onecompany led the industry in terms oftechnology, sales and influence. By1980, the US aerospace industry hadproduced strong competitors inRCA and Ford; Europe was alsoshowing an interest and ability toconstruct communications satellites.Less dominant but still strong interms of reputation, Hughes built itsmanufacturing business at the sametime that it entered the servicessegments, leading ultimately toDIRECTV and the PanAmSatacquisition/merger. Along the way,the RCA and Ford spacecraft
manufacturing arms foundthemselves key parts of LockheedMartin and Loral Space and
Communications, respectively. Anda new entrant, Orbital Sciences,gained access to the field as well.
Strong satellite manufacturingcapabilities are no longer confinedto North America. European giantsAlcatel and EADS resulted fromsimilar forces to produce capabilitiesthat supply satellites equal inperformance and reliability to the UScounterparts. New orders forspacecraft used to be heavily biasedtoward American manufacturers, butthe table turned in 2002 to give theEuropeans the advantage. In sum,
what we appear to have today is alevel playing field that requires allbuyers to do their homework both
during the procurement process andsubsequently while their spacecraftare under construction.
Outsourcing as a Way of Life
Satellite manufacturing has gonefrom pure R&D to more of a systemsintegration model. This is not todenigrate what satellitemanufactures do – we are talkingabout a very complex system thatmust deliver on its servicerequirements after the rigors oflaunch. The commercial jets that wefly are integrated by Boeing, Airbus
I f the 1990s were the days ofsuper expansion in satellitedevelopment, then the current
Galaxy13/Horizons 1 spacecraft in the High Bay at Boeing Satellite Systems
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and others in much the samemanner. But my point is that thecompanies that deliver satellitesnow purchase the bulk of theircomponents and subsystems fromthe outside. This better protectsthem from the boom and bust cyclethat results from how satelliteprocurements lay out over a periodof, say, 10 years. Companies likeComDev, EMS and L-3Communications that were oncesmall shops may rival theiroutsourcing customers in keyfinancial terms.
Consolidation in SatelliteOperation
The development of mega-satelliteoperators like SES-Global hascertainly changed how satellitemanufacturers do business. Thefour operators that hold 50% ofglobal capacity call the shots onsatellite requirements, deliveryschedules and prices. In years past,the manufacturers could stimulatesales in countries around the worldby working with governments andlocal service providers who want tojoin the voyage to space. When Dr.Taksin Shinawatra, Prime Ministerof Thailand, headed his owncomputer services firm, hepersonally purchased two satellitesfrom Hughes and created thecompany that now pursues iPSTAR.
Such opportunities are less likelybut other approaches to the gamecan produce sales. WhenPanAmSat planned for replacementof Galaxy 9, a C-band cable satelliteat 127° West Longitude, they sawan opportunity to develop a Kuband neighborhood as well. The Kuspectrum at this slot was registeredby JSAT through theAdministration of Japan and thetwo companies created a joint
venture to own and market thiscapacity. The payload, known asHorizons 1, was constructed byBoeing Satellite Systems as part ofGalaxy 13 (which is the name givento the C-band payload) and is to belaunched by SeaLaunch in the Fallof this year. Horizons 1 offers a newcompliment of 24 Ku-band (FSS)transponders at 36 MHz each,suitable for a broad range ofservices including video broadcastand distribution, datacommunication networks employingVSATs, and other broadbandservices for private and governmentusers. This partnership hasproduced the sale of another largeBoeing 601HP satellite and thecreation of a new Ku-band orbit slotto serve all of North America.
Expectations of Satellite Operators
Traditional satellite operators likeIntelsat and Telesat have alwaysmaintained strong technical teamswho understand the requirements,design and testing of the productsthey buy. Newer customers tendedto rely on the manufacturers to givethem what they need, allowing themto stand by until handover in orbit.The story has shifted as satelliteshave become more complex andpowerful; a downside has been
some rather spectacular failures onorbit and in the business as well.Buyers of satellites now have strongtechnical teams that match theability of the manufacturers in keyareas of expertise. As a result, manyof the experts who were only foundat leading manufacturers andresearch organizations are nowworking on the buyers’ side, helpingensure that what is bought isactually delivered.
What Value, Digital Processing?
Digital on-board processingsatellites are a reality and do providevalue in systems like Thuraya andHot Bird. On the other hand, majorinitiatives like Astrolink andTeledesic, which depended on theefficiency of digital processing totransfer and manage broadbandtraffic, have fallen by the waysideand many wonder if such a systemwill ever happen. What we havehere is a change in timing and focus– telecom boom-chasing to post 9-11 reality. Processor technologyfrom the North Grumman divisionformerly known as TRW of RedondoBeach, CA, and Boeing SatelliteSystems, will likely find its way intoadvanced government satellites (seemy article in SatMagazine May 2003issue).
COVER STORYHorizons 1Ku-banddownlinkfootprint(127 WL) -shaded areasrepresentmin imumEIRP valuesof 48, 44 and40 dBW.
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Digital processor technology along with the RF capabilityfrom phased array antennas at L through Ka band providethe foundation for advanced capabilities on the commercialas well as government sides. In time, we can expect to seeimpressive capabilities on replacement GEO satellites thatallow beam patterns to be altered in response to servicedemands (something now very difficult to implement withfixed reflector systems) along with bit-regeneration andpacket switching capabilities to better serve the broadbanddata market still in its relative infancy.
The Evolving GEO Satellite
Putting these points together we have a picture of what thesatellite manufacturing business will be like in the next threeto ten years. The dominant satellite operators will continueto push the major manufacturers to give more value in termsof performance and lifetime, and to add those features thatprovide more flexibility and throughput. Outsourcing oftechnology to companies like EMS and Northrop Grummanshould expand and other specialists will appear thatprovide solutions that can be integrated into the space andground portions of the overall system. Innovative jointventures like the Horizons 1 Ku-band payload at 127° WestLongitude provide operators and manufacturers alike withthe basis for new sales opportunities that cross traditionalboundaries. With a more level playing field across Americaand Europe, satellite buyers have new options and yet mustexpend more effort through a satellite development cyclethat lasts from concept to service inauguration.Overcoming this puts demands on the technical andmanagement resources of satellite operators, whothemselves are bigger companies with the depth they needto serve users of satellite bandwidth. The availability of thisbandwidth in coming years is assured and the path toproviding new and improved capabilities is there.
Bruce Elbert has over 30 years of experi-ence in satellite communications and is thePresident of Application Technology Strat-egy, Inc., which assists satellite operators,network providers and users in the public
and private sectors. He is an author and educator inthese fields, having produced seven titles and con-ducted technical and business training around theworld. During 25 years with Hughes Electronics, he di-rected major technical projects and led business activi-ties in the U.S. and overseas. Web site:www.applicationstrategy.com Email:[email protected]
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FEATURES
to-many broadcasting - be it TV ordata. As broadcast and cablenetwork, program, spot and promoacquisition and distribution areincreasingly being managed indigital file formats while storagecosts continue to decline, Televisionoperations are increasingly usingsatellite enterprise networkingtechnologies. A quick look at someapplications in the televisionindustry, in news, broadcasting andcable TV shows that non-real-timefile delivery via satellite broadcast isalive and growing.
Feeding Commercial Spot Servers– In 30 Seconds
Companies like DG Systems havebeamed commercials over satellite toTV stations in digital file format foryears. The typical 30-second spot,MPEG2-encoded at 8 Mb/s, takes 30megabytes of storage on a server.With today’s reduced cost of serverand storage, caching server costsare in the few thousand dollars —versus tens of thousands a fewyears ago for an off-the-shelfservice that can hold 1,000 spots.Satellite multicasting is an ideal wayto refresh hundreds of widelydispersed server sites rapidly withthe same spot files.
Dallas-headquartered DG Systems,uses a Ku-Band satellite network todeliver advertising spots to nearly
900 TVbroadcastfacilities aroundthe US for itsclient base of5,000advertisers andagencies.According tothe company,DG Systems isthe largestsingle digitaldistributionnetwork for thedelivery oftelevisionspots, with a network reachingnearly 95% of the four majornetwork affiliates in the top 100 U.S.markets.
A growing number of TV stations,cable networks and local cablebroadcasters receive theircommercials digitally, within hours,from national advertisers via DGSystems.They include CBS, CNN Networks(CNN, CNN-Sports Illustrated, CNN-Headline News, CNNfn, and CNN-Airport Network), the WB broadcastnetwork, Telemundo, E!Entertainment Television, LifetimeTelevision, The Weather Channel,Fox Sports, The Soap Network,Toon Network, WGN, and SunshineNetwork.
DG Systems installs its Digital VideoPlayback System (DVPS) receiver atTV stations, enabling the network todigitally receive ads from agencies
for insertion of national spots in itsprogramming.In the cable TV advertisingbusiness, National CableCommunications (NCC), an ad salesorganization co-owned by ComcastCorp., Cox Communications, Inc.,Time Warner Cable, AT&TBroadband and Internet Servicesand Katz Media Group, operates atwo-way satellite linked video librarysystem. NCC’s system is intendedto simplify the buying process in thetop 50 markets with consolidating adbuying. It was designed to deliverMPEG2-encoded spots from acentral server at NCC’s hub to ad-servers at head-ends. NCCpurchased its ad-insertion serversystem from SeaChange andcombined that with a HughesNetwork Systems (HNS) two-wayVSAT network allowing bothdelivery of spots via the outboundchannel, and delivery and playoutverification data to be captured onthe VSAT return channel.
Video File Distribution and Management:Evolving Satellite Applications in TelevisionBy Dan Freyer
Satellite technology is the mostcost-effective solution for one-
TVNNetworkOperationsCenter(TVNphoto)
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Newsclips to the Desktop: “ Give Us20 Megabytes, We’ll Give you theNews”
Another way in which distributedserver networks connectedvia satellite are helping thebroadcast industry is newsoperations.
Roswell, GA-based Pathfirehas developed a satellite-based IP (Internet Protocol)multicast store-and-forwardcontent delivery system todigitally transmit broadcast-quality video to stations.The system has been used by NBCto deliver its News Channel affiliatefeed service, and it is deployed forABC’s News One. The systemallows local station news producersto receive, sort, and order clips ofedit-ready format footage from theirdesktops, avoiding the hassle ofsatellite downlink feed taperecording and tape-basedoperations.
Meanwhile, CBS Newspath whichprovides 24-hour news services toover 200 CBS stations and affiliateshas been rolling out a digital file-based solution for its own--andaffiliated stations with the help ofBitCentral’s Mediapipe Newsapplication. BitCentral’s solutionintegrates satellite broadcast, IP, andMPEG technologies to increase theproductivity of news producersthrough an easy-to-use desktopapplication. CBS is using theopportunity to reduce costs byminimizing satellite-refeeds,eliminating tape equipment andautomating news productionprocesses according to thecompany.
In April, NBC News Channel alsosigned up with BitCentral to use the
integrator’s content managementsystem and is rolling it out to 250NBC affiliates. In selecting thesystem, Bob Horner, President, NBCNews Channel said “We think theMediaPipe approach will enable usto continue to play an important rolein the digital transformation ofstation newsrooms” and NBC will
have “greater control andopportunities for personalization inour newsroom and at the stations”.
Syndicated Program Delivery:Tonight’s Program FTP’d to You bySatellite
Storing a day’s worth of 5-minutenewsclips requires some serverspace, but replacing the tapeplayback of most of the day’ssyndicated shows takes a lot morestorage space. Nevertheless, withdeclining costs, long form contentstore-and- forward over satellite ismore viable than before.
An example is Pathfire’s service forWarner Bros. Pathfire signed a deallast year with Warner Bros. todeliver syndicated programming toits 835 TV-station clients viasatellite. Pathfire servers that arebeing installed at the stations,reportedly at no cost to them. Thissystem replaces traditional analogTV feed transmission and tapeplayback at the stations. Theservice should cut Warner Bros.distribution costs by using lessbandwidth while making it simpler
for stations to prep the content forair, according to Pathfire.
Hotel Pay-Per-View, Cable VOD’sPrecursor
The economics and scale of hotel in-room movies have made video filestore-and-forward applications via
satellite viable before the technology has beendeployed in commercial cableTV systems.
Delivering movies by satelliteto VOD servers at hotels cutsthe cost of distribution andboosts hotel revenues byoffering guests a greaterchoice of new films.
A case in point is GlobeCast’sservice for Quadriga Worldwide, amajor European distributor of in-room Pay-Per-View programming tothe hotel industry. GlobeCast, aleading global satellitetransmission service providerheadquartered in Paris, Franceprovides a service called GlobeCastFile which Quadriga uses to feedvideo servers connecting tothousands of hotel rooms in Europefor leading hotel chain brands likeMarriott.
Before the GlobeCast service, manyin-room entertainment systemsrelied on videotapes, which wereexpensive to duplicate anddistribute across Europe, and oftenmanually played by hotel staff. Inaddition, new pay-TV guides had tobe printed for every schedulingupdate and placed in thousands ofrooms. GlobeCast encodes videocontent in London and beams it viasatellite to hotels throughoutEurope. By replacing manual tapedelivery and playout by hotel staff,as well as the need to print andsupply program guides for eachroom, Quadriga was able to help itshotel clients enhance guestexperiences.
FEATURES
BitCentral’s MediaServer
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GlobeCast uses IP-based filetransfer technology to delivermovies as MPEG files to video pay-per-view server systems installed atthe hotels. The solution givesQuadriga secured access via theInternet to the GlobeCast satelliteplatform’s conditional accesssystem so Quadriga can authorizein-room access to content byviewers. GlobeCast also developedan electronic on-screen programguide component.
Unlike its printed predecessor, theon-screen comes guide with previewand promo clips and trailercapabilities to boost movie buyrates. On initial implementation,viewing was increased as much as30% in some cases, boosting hoteland programmer revenue.
Cable Video-on-Demand Delivery:Refreshing New Film Fare
A key competitive feature of cableTV versus DBS is cable’s ability toprovide true video-on-demand(VOD), which DBS can’t offer.Cable operators have been steadilyrolling out commercial VOD servicesin key systems, after over a decadeof technology development andtrials. Gone are the VOD ventureslike Enron-Blockbuster’s JV, DIVAand Intertainer, but by the end of2003, Cable TV analysts Kaganprojects 8.8 Million Video-On-Demand (VOD)-enabled subs will bepassed by US cable systems.
As VOD has rolled out to anincreasing number of head-endssites, satellite multicast technologyhas become more cost-effective forVOD-file distribution, replacing DLTtape-based delivery.
Burbank-based TVN Entertainment,
Inc. offers over 1,200 programmerhours per month of VOD content tocable systems - delivering encryptedmovie files via its C-band digitalsatellite network on the Galaxy XRspacecraft. In addition, Pay-Per-View programmer, iN Demand isproviding VOD offerings featuringStudio and sports content deliveredvia its satellite network for AffiliateVOD services.
TVN’s system has been in themarket for over three years and hasbeen deployed in five of the top tencable companies, with nearly 100sites around the country inproduction receiving satellite VODcontent. About 1,500 hour’s permonth of refreshed data is sent, andsome affiliates take down as much600 hours of content. All of theVOD content is multicast over asingle satellite transponder via a 13Mb/s of data capacity and deliveredto docking stations located at thecable headend.
Using TVN’s asset managementsoftware, the content suppliers canremotely track their on-demandcontent assets through the deliverysystem. According to DaveBartolone, VP Technology for TVN,“The docking station rebuilds fileswe send over the satellite untilthey’re complete as a pre-describedpackage consisting typically of amovie, or trailer and metadata file.Once the package is complete, it’spushed over to the VOD server
FEATURESsystem’s asset manager”. A webutility allows affiliates and contentproviders to view the database tofollow the status of the asset.According to Bartolone, who sees acontining role for satellite in TVN’sbusiness “Satellite makes the mostsense because of the multicastenvironment as opposed to point-to-point land lines. In the futurewe’re looking at real-time encodingso we can for example send time-sensitive content out as files out ina matter of hours, not days”.
By helping its cable clients takeadvantage of cable’s interactivity.TVN hopes to provide more value inthe future. “Another goal wehave” says Bartolone “ is to makethe VOD experience like a DVDexperience, by including chaptering,5.1 audio and extra contentassociated with movies.”
Feeding The Future
Whether its faster-than-FEDEXelectronic delivery and tracking of30-second commercials spots—sending a weeks’ worth ofsyndicated shows to stations — orbeaming the top 20 new Hollywoodfilm releases to cable VOD providersevery month— when it comes tobroadcasting high-bandwidth videocontent to hundreds of locations,the marriage of satellite and serversis making more and more dollars andsense.
Dan Freyer is Director of Sales for GlobeCast, aglobal leader in satellite transmission services forprofessional broadcast, enterprise multimedia andInternet content delivery. Prior to GlobeCast, he hashelped leading satellite companies like Intelsat,PanAmSat, Hughes and TRW grow their revenuesand markets since 1989 in various sales, marketing and businessdevelopment management positions. He has helped numerous cable,broadcast, Internet and VSAT users deploy satellite networks in theUS and overseas. He has served as a Board member and VicePresident of the Society of Satellite Professionals International, and isa partner in Westwood Media Group in Los Angeles. Email questions/comments to: [email protected]
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Dictate Terms”) from MorganStanley praises the company’sbusiness plan for the now mergedformer pay-TV rivals, Via Digital andCanal+Espana/Canal Satelite Digital.The detailed 30 page study, bysenior analyst Javier Marin,highlights three key areas for cost-savings for the new platform:programming acquisition,management costs per subscriberand satellite transmission. Currently,the company is dual emittingsatellite signals to Via Digital’s734,000 subs (Hispasat) and CSD’s1.2m using SES Astra at 19.2 degEast.
For some time Hispasat and Astrahave responded to questionsregarding their client’s plans withperfectly reasonable statementsalong the lines of “We’ll get theexclusive long-term contract”(Hispasat), or “Our long-termcontracts remain in place” (SESAstra). The Morgan Stanley reportdoesn’t clear the confusion, sayingthat the company has decided to“postpone” making a decision onwhich satellite to use. The reportstressed: “We expect Sogecable tomake savings on satellitetransmissions...” Two weeks agoSogecable issued nearly 29m newshares leaving core shareholderTelefonica with a 22.23% economicstake (and 16.38% voting rights) inthe merged platform, and the reportreminds us that the telco iscommitted to staying as a “core
shareholder” for at least 3 years.Groupe Canal+ also has a 16.38%stake (and matching voting rights)in the merged business, while Prisaholds 16.38%.
Sogecable has indicated that itexpects to incur around €300m-€400m of restructuring costs spreadover the rest of this year and 2004,which as well as the re-design of thecompany’s programming offer, andreduction in personnel, alsoincludes “the rationalisation ofsatellite distribution infrastructure”.The Morgan Stanley report goes onto add that, in its view, there arearound 500,000 new installations ayear at stake and that the company’sfirst thrust should be to startwinning these new viewers, offering“technology neutrality” to viewers.“Then,” says the report, “we thinkthe company will use its optioneither to let [current] contractsexpire or to cancel them early,whichever is the cheapest.”
This is entirely logical, of course,but doesn’t help us move forward inpredicting who will win and who willlose the long-term transmissioncontracts. Morgan Stanley does notitemise in detail the new company’scosts, except to show theprogramming, personnel and “other”costs going forward. The “other”element includes transmissioncharges, with “other” currently(2003) stated as 27.3% of revenuesat €316.2m, and falling next year to19.4% of revenues (€280.8m), and to14.9% by 2008 (€299.8m). This, toour thinking, suggests that the dualemission policy will be in place for
the next 18 months or so, and willfade away by January 2005. MorganStanley agree: “Our model assumesthe company will maintain both theHispasat and Astra contracts for2003 and most of 2004, which impliesto us some €30m of duplicatedexpenses.”
On-the-ground observers might getfirmer clues from new dish installs:are they pointing at Hispasat orAstra? No platform that isorganising new dish installs wantsto revisit that subscriber toexpensively realign/replace a dish.
But Sogecable has other challengesto overcome besides those ofsatellite transmission. First up is apossible near-instant loss of some250,000 subs that are “underconsiderable pressure” saysMorgan Stanley. The pressurecomes from Via Digital subs thatwere used to lower monthlypayment patterns. Sogecableexpects to pull out all the stops toattempt to minimise this impact,upselling the new tiers asaggressively as possible. Thedownside is that Via Digital alwaysmade a strong selling virtue of itslower subscription charges, “and
FEATURESDTH in Spain:“Savings on Satellite Transmissions”
Spanish Pay-TV* “New” Sogecable- 2003 position
Company Subscribers
Sogecable DTH 1,201,000Sogecable terrestrial 650,000Via Digital 734,000*Data: Morgan Stanley
Aby Chris Forrester
recent major report on Spain’sSogecable (“The Power to
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these subscribers are likely to bedriven out of the market,” saysMorgan Stanley.
Staffing is another headache,especially with Spain’s toughdismissal legislation. The ‘old’Sogecable had 1500 permanent staffand another 1200 temporaryworkers. Via Digital had just 400staffers. This overlap will result,says the report, in total staffingmore or less in line with ‘old’Sogecable and take a little time toresolve. The upside here is thatmany of Via Digital’s staff haveeither already left, taken earlyretirement, or have been absorbedelsewhere within the Telefonicaempire.
Spain is not the UK, nor is it fair tocompare and contrast Sogecablewith BSkyB. For a start, Sky ‘givesaway’ its boxes (and expenses themon its balance sheet) whileSogecable capitalises the cost of itsdecoders. Indeed, Morgan Stanleypraise Sogecable for creating abusiness in box rental which theydescribe as “very profitable” basedon the rationale that renting a boxwhich is paid for over 18 monthsand yet has a typical life of 7 yearscontributes “more than 10percentage points to Sogecable’sEBITDA margin”. The actual rentalfigure paid by subscribers is €8 amonth. The boxes currently cost nomore than €130 each, and Sogecablewill bank €96m this year from boxrentals alone.
As to Sogecable’s future prospects,Morgan Stanley say they aretargeting 3.3m subs by 2008, fromaround 2.6m today. Of that 3.3m,around 2.7m will be digital DTH.Additionally, the bankers suggestthat overall pay-TV penetrationlevels in Spain (including cable/
DTT) will rise from about 24% at theend of this year to around 34% bythe end of 2008 with Sogecabletaking the lion’s share (67%) by2008. The report also suggests thatcable “poses no threat” toSogecable’s financial progress, eventhough cable subs might well growto end up with a 33% market share.
Piracy has been a nightmare for ‘old’Sogecable, when during 2000 and2001 their subscribers would takeout a basic tier card and then use apirate card to view all the premiumservices. Morgan Stanley assumesno major piracy issues for the future.With this in mind, the report statesthat Spain’s upside for pay-TV isconsiderable. Indeed, it predicts thateven by 2008 the Spanish market willstill be lagging considerably (10percentage points) behind the UK,or put another way, Spain in 2008will be at about the same point theUK was in 1998. Meanwhile,Sogecable’s wholesaling ofchannels brings in €45m-€50m ayear, and growing.
Today’s merged Sogecable is, inreality, at least two distinctbusinesses. There’s the legacyanalogue terrestrial single channelCanal Plus service (currentlybringing in 14% of revenues), andthe Canal Satelite Digital (CSD)direct-to-home platform ((69% of
FEATURES
revenues). Next year, in the firsttrading year of the mergedplatforms, Morgan Stanley forecastrevenues of €1.443bn, and rising to€2bn by 2008.
Besides transmission costs andpersonnel reductions, the next areato save cash is clearly in programmeand rights acquisitions. Without tworival platforms bidding one anotherinto the stratosphere, MorganStanley expect programming coststo results in “hefty” savings. Thetarget is to see programming costsfall to less than 50% of revenues by2005, and this is “fully attainable”says the bank, suggesting 2005costs will be 48.5% of revenues andfall to 47.5% by 2008. Last year theywere at 51.9%, although Sogecableis earmarking €350m to fundcancelled programming contracts.The Hollywood ‘majors’ are safe fora few years yet, however, given thatmost of the studios have contractsin place until 2007. It is only thenthat Sogecable can really start to see“price flexibility” in new deals.
Spain’s merged digital platform isnow finalising its channel line up forDigital Plus. We already know thatMultithematiques is dropping twochannels (Seasons, the huntin’,fishin’ and shootin’ channel, as wellas movie service Cineclassics).
London-based Chris Forrester, a well-knownbroadcasting journalist is the Editor for Europe,Middle East and Africa for SATMAGAZINE. Hereports on all aspects of the industry with special emphasis oncontent, the business of television and emerging technologies.He has a unique knowledge of the Middle East broadcastingscene, having interviewed at length the operational heads ofeach of the main channels and pay-TV platforms. He can bereached at [email protected]
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VIEWPOINT
ever since it was dreamed up in 1945by Arthur C. Clarke, author of 2001:A Space Odyssey. A breathtakingidea whose time has come, thebusiness model remains challenging.Finding the right mix of services thatwill attract a large customer base forthe right price is an ongoing task.While Silicon Valley and Europeanare typecast as the centers for
marketing new technicalachievements, satellite delivers thebenefits of those efforts around theworld, across all borders.
Africa’s infrastructure requirementsare likely to be one beneficiary, andMultiChoice, headquartered in
Johannesburg South Africa, servesthe entire African continent bysatellite with an interestingcommercial and social approach.With 680,000 digital subscribers inSouth Africa, and more than amillion subscribers across 50African and Indian Ocean countries,their Satellite reach includes PAS 7for Ku band coverage of southernAfrica and PAS 10 for C band
coverage of sub-Saharan Africa.They haveinvested in Kuband service onthe back of theEutalsat W4satellite toattractcustomers byoffering smallerdishrequirement.
CEO Nolo Letelecompares hisbusiness withthat of the U.S.
and Europe: “Our growth isalso fueled by the fact that whileyour markets overseas arepenetrated with TV sets, here, theeconomy is transforming in ways.You are starting to see upwardmobility in the population, which isgood and means that a market isbeing created as we go along. Weexpect our South African
subscribership to peak at about twomillion.”“Some of what we do is not yetavailable where you are in SiliconValley. As a sole operator you havethe attention of your subscribers.Our average middle to higher incomeperson hasn’t got a lot ofentertainment, so DSTV supplies 50channels, with as many as foursports options, four movie, and allof this makes for enjoyablewatching—and value that is higherthan it’s US counterpart.”
There are a variety of issues thatsatellite technology must tacklesuch as providing commerciallysuccessful programming content fordiverse audiences and newinteractive services. Multichoice isconcentrating on these areas. Forinstance, when Ford recentlylaunched its Bantam bakkie inAfrica, they chose to use aninteractive approach for DSTVsubscribers with Interactive capabledecoders with Ku-satellite band.This included supplying a virtualcatalog on new vehicle features andthe ability to book a test drive.
Culturally, the technology is beingapplied to stimulate development bydelivering online educationalframeworks such as the MultimediaRural Initiative which bringslearning and technical tools toschools. But the modern school-age generation also demands the
Satellite Challenges andSolutions Cross All Borders:A Case Study in Africa
The communications satellite hasappealed to the imagination
by Howard Greenfield
The SHOMA Foundation, a Multichoice subsidiary,providing teacher training in remote Afircan villagesthrough satellite technology.
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markets. As Mr. Letele says, despitethe growth and success: “We are a‘fast follower’, studious of otherglobal rollouts, but not too late tomarket. We’ve grown and learnedour lessons . and paid the price ofbeing a pioneer.”© 2003 All Rights Reserved - HowardGreenfield
most innovative services. As LindaVermaas, head of DSTV contentputs it “We know the 16 to 30 year-old market watching MTV wantsgreater interactivity. They are thecomputer and cellphone generationand the youthful market wants to beable to use it all, have aconvergence. We’re looking atthat.”
So, the major challenge is to delivercutting edge competitiveprogramming and services and toincrease profitability in a matureSouth African market by offeringadditional services to subscribers,and for the rest of Africa, increasesubscriber base.
This is also emphasized by CarlFischer, head of local production forsister company M-Net: “Ourpackaging has to be desirable tosubscribers. It has to be compelling
and unique. Our challenge is tounderstand there’s no such thing asa general audience, and then cater tothat. We have to be innovative, wehave to be relevant to our viewers.This is what we can do with localprogramming that we can’t do withforeign content.”
Wherever satellite covers, thebusiness case must follow. It’s
Howard Greenfield is principal of Go Associates Consulting Partners(www.go-associates.com), a leading consultancy that develops andimplements high-tech product marketing and business developmentstrategies. He has held leadership roles in Fortune 1000 and some ofSilicon Valley’s top companies including Sun Microsystems, InformixSoftware, General Foods/Kraft, University of California, AppleComputer and was VP, Product Marketing at Obvious Technology andSoftface, Inc.. Mr. Greenfield is a frequent contributor to leadingindustry publications, and serves on the board of BlueVoice, a non-profit organization dedicated to ocean life and habitat. He waseducated at the University of California, and Stanford University, wherehe received a Masters Degree in Interactive Technology. Howard canbe contacted at [email protected].
crucial to take the risks of movingahead quickly and capturing new
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TECHNICAL TUTORIAL
This chapter explains the basicoperation of Internet Protocol, nowknown universally by itsabbreviation, IP.
IP provides two primary functions:routing and fragmentation. Routingdirects the packets of data acrossthe network. Fragmentation dividesthe packets into pieces that fit intothe frames of the underlyingnetwork. An IP packet is called adatagram.
IP was designed to be a relativelysimple protocol for transportingpackets of data across any type ofphysical network. From the user orapplication point of view, thephysical infrastructure of thenetwork becomes irrelevant. UnlikeTCP, IP is not an end-to-endprotocol, and only considers how topass the packet to the next node. IPcan be thought of as the routersthemselves, taking in each packet,looking at the destination address inthe packet header, and determiningthe next router to pass the packet toin order to reach the destination.
Probably the most important aspectof IP to understand, especially whenconsidering the design limitations ofTCP, is that IP is an unreliableprotocol. IP provides no guaranteesthat a packet will arrive at thedestination. In fact, if there is toomuch traffic for the link to support,
IP will transmit what it can andsimply throw away the excess withno notification to the sender.Similarly, if a packet is corrupted, IPwill simply throw it away. IP istherefore called a best-effort service.
Because IP was designed to runover a constantly changing networkwhere parts of the infrastructuremay be added or removed at anyinstant, IP handles every packetindependently of every otherpacket, even if the packets comefrom the same source and are beingsent to the same destination. IP istherefore called a connectionlessprotocol.
Putting these together, theapplication and the transport layerprotocol need to consider that anypacket may arrive at the destination,or it may not. Each packet maytravel by a different path and thestream of packets may thereforearrive in a different order from howthey were sent.
IP Addressing
The next chapter (Chapter 6)explains IP addressing in moredetail. For this chapter, it issufficient to understand that IP uses32-bit addresses to uniquely identifyevery device on the Internet.Strictly speaking, this is only truefor IP version 4 or IPv4, while thenext generation IPv6 uses 128-bitaddresses. In almost all instances,“IP” is still synonymous with IPv4.
To make it possible to actually find aspecific device anywhere in theworld, IP addresses are split into aportion that specifies the particularnetwork on which the device islocated, and a portion whichspecifies the device itself. Except atthe last-hop, routers only need tolook at the network portion of theaddress to know which direction tosend the packet.
Routing
The first and foremost job of IP is totransfer packets across the networkfrom any source to any destination.IP accomplishes this heroic featthrough the process of routing. Ateach interconnection point on thenetwork, a switching device nowknown as a router (originally calledan IMP [Interface MessageProcessor ] and later a gateway)maintains a table listing networksand addresses which can be reachedthrough each of the router’sinterfaces. As each datagramarrives, the router compares thedestination address to theaddresses in the table and sends itout the correct interface to the nextrouter. This process is repeated,
IP Overview
By D.C. Palter
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router-by-router until the datagramarrives at the last-hop router on thesame local network as thedestination device.
The router is therefore a simpledevice (although an amazing amountof functionality has since beenadded onto the same platform withthe routing functionality.) Thecomplexity comes from creating andmaintaining accurate routing tablesof efficient routes. In the simplestcase, the routing tables can beconfigured manually, called staticrouting. Static routing is commonfor routers with only two interfacesconnecting a local network to a widearea network since the routing isextremely simple – the route foraddresses on the local network isone interface and everything elsegoes out the other interface.
For complex networks that arechanging frequently, it becomesnecessary to configure and updatethe routing table automatically in aprocess called dynamic routing.Dynamic routing is accomplishedthrough router-to-routercommunications to determine thebest routes. Chapter 7 explainsrouting and dynamic routingprotocols in more detail.
Fragmentation
In addition to routing, the otherprimary job of IP is fragmentation.The largest IP datagram that can becarried across the network is afunction of the frame size of theunderlying physical network. Thelargest payload that an individuallink can support is called theMaximum Transmission Unit,usually shortened to MTU. Forexample, Ethernet uses 1526-byteframes with a 1500-byte payload.
Figure 13 shows the MTU of a fewcommon networking technologies.In general, slower link technologieshave a smaller MTU while faster linklayers send more data per frame toreduce header overhead.
Since different links may havedifferent MTUs, what should IP doif a datagram arrives on oneinterface that is too large to sendout the other interface? Forexample, an 8000-byte packet mayarrive over an ATM wide areanetwork on one interface of therouter, but need to be forwarded toan end user on an Ethernet localarea network which can onlysupport frame sizes up to 1500bytes.
The solution to the first issue is thatif an incoming datagram cannot fit inthe frame of the next hop, IPfragments the datagram into multiplesmaller datagrams. For example, therouter will divide the 8000-bytedatagram from the ATM link intofive 1500-byte datagrams that fitwithin Ethernet frames, and oneadditional datagram with theremainder of the data. Eachfragment is a full IP packet andrequires its own IP header, so the sixnew datagrams in this example willbe greater than 8000 bytes. The newdatagram headers includeinformation on where each fragmentfits within the original datagram sothat IP can reconstruct the originaldatagram at the final destination,even if the fragments arrive out oforder.
Fragments are not reassembled untilthey reach the final destination.Fragments may also be furtherfragmented as they continue tofollowing hops. For example, if in
the previous example, the final hopto the end user is a dial-up modem,the original 8000-byte datagram thatwas fragmented into 1500-bytedatagrams, are then furtherfragmented into smaller 576-bytedatagrams. The IP stack on the enduser’s machine then reassembles thefragments into the original 8000-bytedatagram.
The exception to this process is ifthe “don’t fragment” flag is setwithin the IP header. When thisoption is turned on, if a datagram istoo large to fit in an outbound linkframe, the router throws away thedatagram and sends an ICMP errormessage to the original source ofthe datagram.
Path MTU
The second question is what sizedatagram should IP normally send?Small packets are not optimal for tworeasons. First, the smaller thepacket, the greater the overhead ofthe headers and therefore the lessdata that can be carried over thelink. Second, small packets increasethe processing load on the routers.Since the router examines the headerof each packet separately and routesthe packet out the appropriateinterface, the amount of processingrequired by the router dependsalmost entirely on the number ofpackets and is mostly independentof the amount of data in eachpacket. For efficiency and linkutilization purposes, it is best to useas large a packet as the link layercan support.
If small packets are not good, whynot simply use a huge datagram andlet IP fragment it as necessary ateach hop? This would ensure that
TECHNICAL TUTORIAL
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DC Palter is Vice President of Sales and Marketing ofMentat—a supplier of high-performance networkingsolutions to the computer and satellite industries.Previously, Mr. Palter held marketing and engineeringpositions at Hughes Electronics, Allied-Signal Aerospace,and Kobe Steel. Mr. Palter holds a BSME degree from
Northwestern University and an MBA from the Anderson School at UCLA.Mr. Palter is also the author of a textbook on the Osaka dialect ofJapanese. He can be reached at [email protected]
This tutorial is excerpted from a book by D.C. Palter entitled “Satellitesand the Internet: Challenges and Solutions.” For more information aboutthe book go to: www.satnews.com/free/pubs/internetinfo.html
IP always uses the largest possiblepacket size for the particular pathbetween source and destination. IPcan support datagrams up to 65535bytes.
Unfortunately, there are twoproblems with this approach. First,fragmentation and reassembly ismuch more processing intensivethan routing, so this approach caneasily end up less efficient thanusing small packets. Second, andmore importantly, IP has noretransmission mechanism and willthrow away datagrams duringperiods of congestion. If even onefragment of the original datagram islost, IP has no choice but to throwaway all of the other fragments fromthe original datagram that havearrived. If the 65535 byte datagramis fragmented into fifty 1500-bytepackets, if even one of thefragments is lost, the other forty-nine fragments will also have to bethrown away.
The simplest solution is to manuallyconfigure a reasonable default MTUon the end devices. MicrosoftWindows-based consumeroperating systems use an MTU of576 bytes, assuming that the userwill likely be connecting to theInternet over a low speed dial-upmodem with a small frame size.Most server operating systemseither use an MTU based on thetype of interface, or use 1500 bytesassuming that the device will eitherbe connected by Ethernet or theconnection will pass throughEthernet at some point. This valuecan also be manually adjusted asnecessary by a system administratorinstalling a high speed network suchas ATM which offers a larger MTU.
The other solution is to probe thenetwork to automatically determinethe largest MTU that can besupported for the particular pathbetween the source and destinationdevices. This process is called PathMTU Discovery and is specified inRFC 1191. Path MTU works bysending out datagrams that cannotbe fragmented. If the datagram istoo large, the router at the hop withthe small MTU will drop thedatagram, but send back an ICMPerror message with the size of theMTU for the next hop. IP will thentry again using the indicated value.If there are later hops with evensmaller MTUs, IP will repeat thisprocess until the datagram reachesthe destination without generatingan ICMP error.
IP then caches the MTU for aparticular destination and continuesto use this value for future traffic,periodically probing the link with alarger packet to determine if the end-to-end link to the destination cannow support a larger MTU.
Path MTU does violate the basicassumption of IP that every packet
may travel over a different route,which could have a different MTU.The Path MTU process only workseffectively if routes are notchanging frequently between linkswith different MTUs, whichfortunately is usually the case in reallife.
Path MTU also has one otherdrawback. When initiating aconnection to a new location, it cantake one or more iterations beforethe datagram can reach thedestination, causing a delay in thestart of a new connection. Overterrestrial networks whereacknowledgements return quickly,an extra one or two round trips toestablish a new connection willusually not have a noticeable impacton performance. Over a satellitelink, the extra round trips toestablish the connection may benoticeable, especially if theproblematic links are on theopposite side of the satellite linkfrom the sender. Fortunately, mostnetworks are now standardized onthe Ethernet-sized 1500-byte MTU,so fragmentation from an initial1500-byte MTU is becomingincreasingly uncommon.
TECHNICAL TUTORIAL
SM
(To be continued next issue)
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FEATURES
operators to beam signals into India.Then it was the notoriousConditional AccessSystem (CAS) rules whichrequired India’s 30,000 so-called “cable-wallahs” toinstall set-top boxes inevery household by July14. Both sets oflegislation have stumbled.India’s media rules nowallow limited foreignparticipation (to 26% ofequity) for news channelsthat emanate from India,like Rupert Murdoch’sStar News, part of his Star Indiaportfolio of channels. Last week,India’s influential GoM (Group ofMinisters, drawn from media, lawand finance ministries) announced itwould hold a “final review” of StarTV’s general DTH plans. Under thecomplex Direct-to-Home rules,foreign equity participation is limitedto 49% with a further cap of 20% ondirect investment. In addition, thereis an important 20% sectoral cap forforeign equity participation frombroadcasting companies.
These equity participationregulations have created problems.Doubts have arisen because Star’sDTH applicant, Space TV, which hasbeen formed by Star employees (aspromoters and CEO). Questionshave now arisen as to the source of
the venture’s funding. If it is fairlyobvious that Space TV serves as acorporate veil, the governmentwhich has now ploughed throughreams of paper on the shellcompanies floated by Star foruplinking purposes, is wary of
between 250-400 Rupees for a largerportfolio of 60-odd channels thatcontain a mix of local andinternational programming.
The Indian government ruled thatviewers in the country’s four main
cities: Mumbai, Chennai,Kolkata (Calcutta) and NewDelhi, cable operators had toinstall cable set-top boxes,thereby allowingprogrammers to earn a fewextra rupees by establishinga premier tier of higher-valuechannels. The boxes had tobe installed by June 15, thenwhen this was clearlyimpossible a fresh date wasgiven, July 14. This has alsobeen abandoned, with media
authorities now saying operatorshave until the autumn to start boxinstallation. Normally, set-top boxesalso attract a punitive 51% tax ontheir installation. This has been cutto 5% until July 31, although as thisis written it is uncertain whether thistax holiday will be extended to asuggested date of September 30.
A ministerial proposal is that thistwo-month extension of the dutyreduction on imported set-top boxesbe allowed. The former structurewas due to come back into force onAugust 1 of 25% basic customsduty, 16% countervailing duty and5% Special Additional Duty. With anintention to provide a level-playingfield to indigenous manufacturers,the finance ministry also abolishedexcise duty on STBs and reducedcustoms duty from 25% to 5% on
similar arrangements for other DTHoperations as well.
The prize, for Murdoch as well asrivals like his former local partnerSubhash Chandra, is India’s fast-growing cable penetration, claimedby Star to be topping 55m homes,and probably significantly more.Under-reporting of actual numbersis normal amongst the cableoperators, and some broadcasterssuggest that up to 80% of cable’snumbers are under-stated. The cableoperators say they have “about” 6million homes paying for TV signals.Fees are low, around 50 Rupees amonth ($1) in rural communities, foraround 20 channels. City-dwellers(and better paid) get charged
Indian TV in a Mess
By Chris Forrester
F irst it was the ‘will they, won’tthey’ legislation to permit DTH
Rupert Murdoch’s STAR TV stands to benefitfrom liberalization of India’s mediaforeign ownership rules
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key components of STBs, namelytuners, remote control units and RF-modulators.
The government’s view is that CAS“empowers” viewers. “CAS isdesigned to empower theconsumer... We will make sure that itis consumer-friendly,” Informationand Broadcasting Minister RaviShankar Prasad said. Prasad saidcable TV rates had gone up by 11per cent in the last six years andCAS would give the consumer theright to choose pay channels andpay only for those they wanted toview. Data supplied by the Customsand Central Excise authoritiesshowed that just 50,000 set-topboxes had been imported by variousMSOs by July 16.
Having last year passed the DTHrules, and this year attempted tointroduce the CAS rules on thecable sector, now the Indiangovernment is planning to thinkagain. The government on July 24accepted that there is “clearly aneed for [further] institutionalmechanism for regulation ofbroadcasting.” A statement by RaviShankar Prasad, minister forinformation and broadcasting, saysthat a wider consultation withstakeholders is necessary to decidea new appropriate framework. Thecomment suggests the I&Bministry’s recent experience with theindustry in the context of CAS,uplinking, FM radio and otherissues, is prodding the leadership toexplore tougher options
While there’s this governmentconfusion, there seems littleincentive for cable operators to getbehind the new rules. Indeed, lastweekend a meeting of cable-wallahsin Kolkata generally postponed theirthreat for a black-out of all TV, as a
protest against the CAS concept.But some did interfere with feeds.General secretary andspokesperson ofCable OperatorsSangram CommitteeTarak Saha said insome pockets of thecity cable operatorshad already begunblacking out cablechannels. “It isalready happening.Operators are nothappy at the way inwhich CAS is beingintroduced,” he said.Saha said the SangramCommittee and all itsmembers were “infavour CAS beingintroduced” but not asannounced bygovernment. Moreimportantly the 72Rupees fee for allchannels that thegovernment hasoffered during atransition‘honeymoon period’seems to be “allwrong”. “Manychannels have alreadytold us that they willnot agree to thishoneymoon periodoffer,” he added. “Andwe will have to paythem the old rateseven then. This isimpossible. Most[urban] cableoperators earn Rs 250to Rs 300 per month atpresent. If a bulkof this is reduced toRs 72 and yet we haveto pay up the oldrates, all cable
operators will run out of business.”There’s other criticism. India’s
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London-based Chris Forrester, a well-knownbroadcasting journalist is the Editor for Europe, Middle East andAfrica for SATMAGAZINE. He reports on all aspects of theindustry with special emphasis on content, the business oftelevision and emerging technologies. He has a unique knowledgeof the Middle East broadcasting scene, having interviewed atlength the operational heads of each of the main channels andpay-TV platforms. He can be reached [email protected]
Consumer Guidance Council asked:‘Why should any cable operatorbother with boxes. There is nopolicing of the rules.’ This is correct,and there’s no planned policing ofthe regulations although thegovernment has expressed hopethat the broadcasters would behave“rationally”. Another publicwatchdog has argued that thegovernment is foolish to legislatenationally for local tastes. AnilPatwardhan of the ConsumerCorordination Council asked: “Whois to decide which channel a personin Mumbai is to watch. Can someofficial in New Delhi [India’s capital]decide which channels someone in aremote corner of India shouldwatch?”
Meanwhile, Star News is operatingits all-Hindi service on a temporaryweekly licence issued by theMinistry of Information. There’s talklocally of ‘dirty tricks’ behind thecompany, which lost its main backer(Kumar Mangalam Birla) in mid-July,and allegations that Star’s licence-holder (Media Content &Communications Services) is just afront, a shell company in effect,made up of a handful of friendlylocals to Mr Murdoch. Localtelecoms giant VSNL, which handlesStar’s uplink services (and in whichthe Indian government holds a smallstake) has reportedly threatened todrop Star’s feeds.
Then, there’s the increasinglyacrimonious relationship betweenone-time pals Murdoch and ZeeTV’s owner, local mogul SubhashChandra. Murdoch and Chandraended their relationship some 3years ago and have since beenseen as fierce rivals for India’sviewing loyalty. Currently,Murdoch’s Star operation is wellahead, helped by the switch from
English to Hindi on Star News,taking its market share soaring from7% to 30%. Star Plus has 45 out ofthe top 50 programmes, and hasallegedly led Chandra to use his
FEATURES
EMS Technologies 22www.emssatnet.com
FOXCOM 29www.foxcom.com
International SatelliteDirectory 26 & 27www.satnews.com/freepubs/isd.html
ISCe 2203 10www.isce.com
MITEQ 5www.miteq.com
SES Global 15www.ses-global.com
W.B. Walton Enterprises 8www.de-ice.com
ADVERTISER’S INDEX
many parliamentary links with theruling VJP political party to lobbyagainst Murdoch and Star. Star’snext move is to establish regionalversions of its services, in locallanguages, and for this extracapacity will be needed. If nothingelse this is good news for the DTHand distribution sector. SM
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Digital DTH/DBS subs (000) by country
Country 2001 2002 %change
Denmark 200.5 239.1 19.3France 3,139.0 3,447.0 9.8Finland 50.9 64.1 25.9Germany 834.0 1,154.0 38.4Greece 88.1 132.5 50.3Italy 2,159.5 2,666.8 23.5Netherlands 43.8 47.0 7.3Portugal 224.0 290.0 29.5Spain 2,036.4 1,995.0 (-2.0)Sweden 438.3 530.7 21.1UK+Ireland 5,716.0 6,562.0 14.8
W. EUROPE 15,330.5 17,612.5 14.9
Czech Rep 42.3 52.0 22.9Hungary 59.1 79.1 33.8Poland 601.7 688.0 14.3
C. EUROPE 703.1 819.1 16.5
USA 17,576.0 19,400.0 10.4Canada 1,768.1 2,088.9 18.1
N. AMERICA 19,344.1 21,488.9 11.1
Mexico 692.0 706.0 2.0Brazil 708.0 732.0 3.4Other Latino 1,610.0 1,582.0 (-1.7)
C/S AMERICA 3,010.0 3,020.0 0.3
Africa 793.6 920.0 15.9Middle East 600.0 620.0 3.3
AF/MID-EAST 1,393.6 1,540.0 10.5
Indonesia 25.0 25.0 0.0Japan 2,506.8 2,939.3 17.3Korea 0.0 450.0 0.0Malaysia 590.0 800.0 35.6Taiwan 80.0 100.0 25Thailand 254.5 291.0 14.3
ASIA/PAC 3,456.4 4,605.3 33.2
New Zealand 300.3 354.5 18.1Australia 726.5 732.6 0.8
AUST 1,026.8 1,087.1 5.9
World Total 44,264.4 50,172.8 13.3
Data:Screen Digest
digital satellite pay-televisionconnections grew last year byalmost 6 million subscribinghomes to 50.17 million. Asiais the fast-growing region with33% growth in subscribers.The best-performing singlecountry in percentage termswas Greece, where Nova’ssubscriber base grew 50.3%helped by the collapse of itsrival (from 88,100 subs to132,500). Western Europeadded more subscribers(2.3m) than North America(2.1m) last year while LatinAmerica’s continuingeconomic troubles held backprogress (0.3% growth to3.02m).(Chris Forrester)
World’s DTHSubscribersTop 50 million
VITALSTATISTICS
According to a recent study(Screen Digest, June 2003)
SM
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MARKET INTELLIGENCEPresented by the Global VSAT Forum
experiencing a change in fortuneafter recession, and its demographymay prove to be a primary reason forgrowth in satellite communications.The population is young; theaverage age is 26, and the hungerfor new technology anddevelopment is stronglypronounced. The liberalisation ofimport and export trade regulations,the privatisation of state ownedenterprises and the encouragementof foreign investment have alsocreated a market with huge potential.
In 2001 the world-widetelecommunications industry was inturmoil, with the fewest satellitesorbited in any year in nearly adecade. Now, there are signs ofrecovery. As a whole, thecommercial satellite industrygenerated revenues of US$86.8billion in 2002, compared to US$78.6billion in 2001. Increasing globaldemand for satellite services isexpected to continue between 2003and 2011. So, for Turkey, where willthe growth areas be?
Telecoms account for 3.1% of theTurkish Gross National Product(GNP). It is one of just 17 countries
to operate its own satellites: Turksat1-B & 1-C, and Eurasiasat 1.Eurasiasat provides Internet, TV,GSM and VSAT applications toTurkey. Other satellite operatorsactive in the region includeInmarsat, Eutelsat and Intelsat.
Growth in demand for satellitetechnology in Turkey is increasing.The analogue TV system is slowlybeing replaced by digitalprogramming and receiver systems.Supply of cable TVinfrastructure cannotmatch burgeoningdemand, thus openingthe door for satelliteto service theresidential market.
Direct-to-home (DTH)television isbeginning to infiltratethe Turkish marketbut currently totalsonly 500,000 receiver units units peryear. However, digital technology is becoming morepopular with use of new servicessuch as Pay-TV, tele-banking andshopping and high speed Internetaccess. With a young andadaptable population, the outlookfor the DTH market looks positive.
Low noise block down convertersare also expected to provide anexcellent opportunity for foreigninvestment. Currently, suchadvanced products are notdomestically manufactured andTurkey relies on imports.Domestic antenna manufacture inTurkey is well developed andcompetition is intense, howeverforeign companies may still findniche demand for smaller, moreefficient designs VSATs are widely
used in the domestic andinternational business and financialarenas. There is also an increasingdemand for high capacity, onlineVSAT services via satellite. TurkTelecom uses their own satellite,Turksat 1-B for domestic andinternational use.
If we look at Turkey in comparisonwith the European market, we can
INTERNET Subscribers in Turkey
In the next issue: Iran MarketIntelligence Report and detailsof the Middle East SatelliteSummit, to be held in Tehran,Iran on 1-2 October 2003. ThisSummit is jointly organised bythe Global VSAT Forum and theIran ISP Association. For furtherdetails go to www.gvf.org orcontact [email protected]
SM
Source: CeBit Broadcast, Cable & Satellite Eurasia 2003
TURKEY‘Statistics and evaluations reveal thatTurkey has become an outstanding tradelocation for foreign companies…Production and sales opportunities aregradually rising in both domestic andinternational fields. Uniting withinternational investors who bring alongnew production technologies, localcompanies are becoming world-widebrands…’Market Report, CeBit Broadcast, Cable &
Satellite Eurasia 2003
T urkey’s East-West location isits strength. The country is
see that it has huge potential. TheEuropean market has been saturated,whereas, the Turkish market is openand ready for foreign investment.The country’s demographicspresents opportunities for satellitetechnology. The country is ready toprogress and is willing to pay theprice for quality goods from abroad.