[Satellite News – 4-3-08] Israel’s RRSat Global Communications Network Ltd. has completed a pair of acquisitions in the past two months that will give the company a strong position in both in the domestic market as well as boost its international aspirations, said CEO David Rivel.
    In late March, RRSat announced that it would acquire Bezeq’s satellite assets in a deal worth $15 million, signalling Bezeq’s exit from the satellite arena and RRSat’s intention to become a bigger force domestically. The deal includes the property and assets of Bezeq’s Emek Ha’ela teleport as well as the BezeqSat and 711 business units, which provides global satellite communication services and serves as a primary distribution center for Inmarsat.
    “When Bezeq decided to sell this facility, we saw this as an opportunity to have the best connectivity in the country,” Rivel said. “This was a place where they connected all the studios and all the production houses. Bezeq is the only company to provide fiber connectivity to this location. TV channels and media were all connected to this teleports. By having this facility, we will have a better redundancy of all the network, and we will not be limited to the size of dishes and antennas. We see our network as a very fast growing fast network. We have doubled and even tripled the number of channels in a very short period of time.”
    Bezeq’s satellite assets, which generated revenues of about $7 million in 2007, had been a target for RRSat for a while, Rivel said.
    “Bezeq, as Israel’s national telecommunications company, had sole access and ownership to all of the country’s satellite services operating out of this teleport,” Rivel said. “During the last few years, we have been competing in the same field of operations, although we have operated from different teleports in the country with Bezeq operating out of this teleport. As RRSat grew and expanded, we gained more and more market share. However, over the last eight years, we have chosen to concentrate on expanding our RRsat Global Network, which is more about offering global services outside of Israel but with the edge by being based, from a geographic perspective, in Israel.  Just to elaborate, through our unique so-called Star location, we are able to bring services to different continents using only one satellite hub. This transaction will enable us to provide our customers with more facilities and services, while offering substantial development and expansion opportunities.”
    As part of its move to develop more international business, RRSat announced in mid-February it would acquire its first satellite asset in North America — the Hawley Teleport in Pike County, Pennsylvania, from Loral Skynet in a deal worth $4.3 million.
    “This acquisition gives us the opportunity to move to a big facility in the [United States],” Rivel said. “ We are now in a better position to serve the American market. We can also take content from the [United States] and bring that all over the globe. It also helps with our RRSat Global network strategy.”
    One of the keys for the company going forward will be how it uses satellite and other distribution technologies to help customers. “Our RRSat Global Network includes satellite, but we use as well fiber optics and Internet capacity,” Rivel said. “We continue to provide services to our customers, even when the best solution for them is fiber. We can provide fiber services. For our customers the most important thing is to find the best way of taking their content from the playout center, operated here, to the IPTV, cable, mobile operators, etc. They don’t care how we do this. The market will constantly evolve, adopting different technologies, but we will continue to offer the best service for our customers to meet their specific needs.”
    Rivel is forecasting strong growth for the company in 2008. “Our business is based on long-term contracts,” he said. “Contracts are around two to five years. Our backlog is something around $155 million, which we view as a very strong number. In 2008, we are expected to deliver $75 million to $76 million in revenues. The majority of that is coming from long-term contracts, so we have very high visibility in terms of revenues. In the $155 million backlog of revenues, $60 million will be realized during 2008, so that gives us a very high visibility. This gives us a lot of confidence.”