On the strength of an investment in Eutelsat earlier this year costing more than 1 billion euros ($1.37 billion), the Spanish infrastructure company Abertis is now a major player in the satellite space. The company is Eutelsat’s major shareholder, with a 32 percent stake in the company.

The deal, done through Abertis’ subsidiary, Abertis Telecom, and completed in late January, marked a hectic period of Eutelsat’s gaining new shareholders. Following the Abertis deal, French investment firm Caisse des Dépôts (CDC) acquired a 25.5 percent stake from Eurazeo. Combined, CDC and Abertis now represent close to a 60 percent shareholding in Eutelsat.

Abertis Telecom’s aggressive move led to speculation regarding possible closer ties between Eutelsat and Hispasat. Eutelsat has nearly a 30 percent stake in Hispasat and, given Abertis’s strong position in the Spanish infrastructure market, a closer cooperation in the satellite space could happen.

Aside from that possibility, Abertis made a major statement and will undoubtedly play a key role in shaping Eutelsat’s future. In an interview with Satellite News, Tobias Martinez, managing director of Abertis Telecom, spoke about the operator’s investment into Eutelsat, stronger ties with Hispasat, and what impact he thinks Abertis can have in the European satellite sector.

Satellite News: How important does Abertis view the satellite sector? What growth opportunities do you see for the company in this area?

Martínez: Satellite communications is one of Abertis Telecom’s strategic businesses. In our view, the satellite industry has a very positive outlook with very interesting trends in digital TV distribution and corporate solutions. It is the most efficient technology for broadcasting, with the ability to get huge amounts of information to the highest number of customers and with the widest geographic coverage. Past experience has shown that technology (compression, codification, and transmission standards) is driving usage expansion. In this transition from analog to digital, as well [as] HD, there will be an increased demand for satellite capacity and applications. On top of this, we envisage future growth opportunities linked to hybrid solutions between satellite and terrestrial networks. New services, especially those related to mobility, need a variety of different communications infrastructures. Abertis Telecom is stepping up its presence in terms of telecoms and satellite infrastructure. Our terrestrial network in Spain comprises more than 3,000 sites.

Satellite News: How do you view your investment in Eutelsat? Why did you decide to invest in European FSS? Are there any other synergies with Abertis’ other lines of business?

Martínez: The strategic rationale of Abertis Telecoms’ investment in the satellite sector is straightforward. We boast a great deal of experience in the satellite industry as a service provider. Abertis Telecom has been one of Hispasat’s main customers for years. It is also the main shareholder of a company called Overon, which is a company that provides satellite transmission and contribution services. We have a 51 percent holding in this company. Secondly, a satellite operator’s profile is similar to a telecoms infrastructure operator. The Abertis Group is one of the global leaders in infrastructure management, with strong cash flows and margins and long-term relationships with customers. The growth of the telecoms sector has switched the Abertis Group’s geographic and diversification strategy. Abertis Telecom is committed to sustainable growth and international expansion. This explains our interest in Eutelsat.

Satellite News: You have outlined the strength of the FSS business. Would you like to become a majority shareholder in Eutelsat?

Martínez: We feel very comfortable with a 32 percent stake. We also feel comfortable having CDC as the other main shareholder. We also have shareholdings with CDC in Sanef, a motorways company of [the] north of France. We feel comfortable with the top management of the company.

Satellite News: Are you looking at other FSS assets such as Hispasat? Considering Eutelsat’s stake in Hispasat, are the two companies a natural fit?

Martínez: We see them as complementary, but different companies. Eutelsat’s market is mainly Europe, the Middle East and Asia. Hispasat has a strong footprint in Spain and Latin America. Provided they retain their personality and the combination of the systems, there are advantages for both players. This combination could also pave the way for investment in ground projects that could enable Hispasat to compete with the industry heavyweights. Eutelsat may well grant Hispasat capacity as well as global presence. Hispasat would provide the benefits of a leading position in all Spanish and Portuguese language markets. There is very complementary coverage.

Satellite News: Is it likely that Eutelsat and Hispasat will become one company?

Martínez: Abertis Telecom wants to preserve the specific identities of the companies. We don’t have the same partners in the two companies. We need to keep both companies exploiting potential synergies but preserving their own personality. Both companies have different shareholders, but from our point of view we as Abertis Telecom could improve the growth of both companies by playing our role as an industrial partner.

Satellite News: So it is unlikely that Eutelsat and Hispasat will become one company? Is it even a possibility?

Martínez:  No. If Abertis Telecom becomes a Hispasat shareholder, Eutelsat and Hispasat would operate as separated companies, although they are complementary. 

Satellite News: Would you look to make investments in the FSS industry outside of Eutelsat?

Martínez: Yes, Abertis Telecom will continue to assess opportunities that emerge in the market and that fit with its business approach. The main criteria followed by Abertis group when deciding to invest in a specific project are: That prices are reasonable; we invest in a long-term view of any investment and play a role in the long term success of the project; we must be allowed to contribute our experience and know-how as we are the major shareholder and we want a clear industrial role; we are not a financial investor, we are an industrial management company. 
This is our main policy. We are looking to expand our interests in the satellite sector. This is mainly in Europe, but there may well be opportunities outside of Europe, such as in Asia for us in the satellite sector. 

Satellite News: Eutelsat has not really been involved in the consolidation process compared to some other players, i.e., Intelsat and PanAmSat or SES and New Skies. Will it ultimately have to get involved in this consolidation?

Martínez: Eutelsat is already a global player and it has all the strength to be competitive in the market on its own. They have been very successful in terms of organic growth. They are also successful in attacking markets and consolidating their positions. The project is likely to be complemented, rather than completely redesigned.

Satellite News: Can Abertis play a day-to-day running of the satellite businesses? What do you hope you can do to help these businesses grow?

Martínez: We are the main shareholders in Eutelsat. We are very committed in terms of the strategic and business plans over the next five years. We want to be involved in the strategic orientation of the company. We are very much hands-on investors.

Satellite News: Finally, what role do you see the company playing on the satellite services landscape in Europe? Where do you hope to position the company?

Martínez: Abertis Telecom wants to become one of the leading operators in terms of the telecoms infrastructure business. This is not just in satellite, but in different infrastructures. We want to be major players in terms of satellite and terrestrial. We are working in a rapidly evolving industry faced with huge question marks with respect to market intelligence and technology. This needs diversification and flexibility in the types of solutions offered for carrying and distributing signals. Only by combining different human skills will we be in a position to offer new services such as mobile TV, HDTV etc. Around three years ago, we looked at how we wanted to position the company as the leading infrastructure operator and how to do it using the most efficient infrastructure. This was not only terrestrial infrastructure. We felt we had to use satellite infrastructure and this is the rationale behind the model we are using.