[Satellite News 09-09-08] Eutelsat Communications has seen its share of headlines in recent months, though not the type that the company normally seeks.
    The operator has had issues with its W5 satellite, which suffered an anomaly to part of its power generator subsystem in June. The satellite lost the use of four transponders, and Eutelsat then revealed Sept. 4 that the satellite’s lifetime has been reduced by up to three years.
    Reporters Without Borders has said that the transponder problems are more political in nature that technical, as the press freedom organization accused Eutelsat of shutting down the W5 transponders due to complaints from the Chinese government about broadcasts by New Tang Dynasty Television (NTDTV). Eutelsat has denied the accusations that it censored the  independent Chinese-language broadcaster at the request of the Chinese government.
    Eutelsat CEO Giuliano Berretta discussed the recent challenges, the state of the satellite industry and why he thinks the satellite industry is in “good shape” with Satellite News.

 
Berretta: Eutelsat holds absolutely no prejudice against channels broadcast by our satellites including NTDTV, which broadcasts in Europe via our Hot Bird video neighborhood. NTDTV has been treated in every respect in identical fashion to other channels present on the W5 satellite which experienced a technical incident in the night of June 16 to 17 which necessitated the shut down of four of the spacecraft’s transponders. The problem affecting W5 has been explained to NTDTV. We confirmed to them that the technical anomaly experienced is irreversible, that we operate no other satellite with coverage of Asia but that there are a number satellites operated by other operators that we know have capacity available and that are even able to offer superior coverage of China than W5.
    We do not understand why Eutelsat is being pressured to resume broadcasting a channel when it is beyond our technical means to provide consumer broadcasting services for any TV channel while maintaining safe conditions for the satellite. Our only motivation is to continue safe operation of W5 and to take it safely through the upcoming eclipse when we will need the switch off of a fifth transponder. We totally refute any allegation that we are exploiting a technical situation to conduct a policy of discrimination.
 

 
Berretta: The satellite industry is in good shape, having come through a cycle of excess capacity which began in 2002 and which was followed by reduced investment in space. Today, not only speaking for Eutelsat, there is increased demand for satellites in well-established markets and growth opportunities emerging in fixed and mobile markets which may have as much impact as the arrival of digital television 10 years ago.

 
Berretta: Many observers were anticipating rapid and enormous growth of HD channels, while Eutelsat remained very prudent in our own predictions. The number of HD channels broadcasting through Eutelsat is actually slightly superior to our expectations. There are a number of factors that have clarified the environment for HD, notably the progressive infiltration into households of HD displays and the emergence of Blu-Ray as the de facto standard for HD games and as a DVD player. The strength of this off-line content is creating expectations from consumers for HD broadcasts and pay-TV operators are now responding by adding HD into their mix or launching all-HD platforms.
    Our second prediction was that we did not believe HD would only take-off in Western Europe. We believed that new digital video markets in Central and Eastern Europe would also be early adopters and even kick off in MPEG-4. A good example is n in Poland, which launched directly in MPEG-4 from our Hot Bird video neighborhood. Our own HD channel figures clearly show this trend. Of the 55 HD channels broadcasting today [on Eutelsat satellites], half are addressing Western Europe through our premium video neighborhoods and half are broadcast via our major video neighborhoods addressing Eastern Europe, Turkey and Africa.
 

 
Berretta: It is difficult to predict. We are still in the very early stage of the market, which means that even though the long term potential of HD is clear, the precise trajectory through which we will reach this stage is not clear-cut. When the market has really taken off it will be easier to project from one year to the next. One thing I can tell you is that the acceleration we saw in the first six months [of 2008] is continuing.
 

 
Berretta: Eutelsat and SES have taken a very measured approach to mobile broadcasting which we think is well aligned with this important emerging market. In particular, through a partnership with our main competitor, we are reducing risk in a new area. Our shared strategy is to launch a payload with wide coverage and capacity that can be used for multiple applications. History has shown more than once that a large satellite locked into one application can be a mistake. We have always been clear that the potential for the S-band lies in more than mobile satellite broadcasting and that the return channel could have particular value, notably for vehicular applications as a complement to GPS and data on Galileo. We are also looking at other professional applications where the equipment cycle is developing fast, notably maritime and aeronautical services.
    We have been very careful in our planning for Solaris Mobile and are the only player that we know of that has made any kind of hard financial commitment to the development of a satellite. We believe this means we will be first to market and therefore able to bring the benefits of these new technologies to the European marketplace before anyone else.
 

 
Berretta: I recently read an article asking whether broadband via a Ka-band satellite is innovation or revolution? I think we are the only ones in Europe to really assert that this step is a revolution requiring an entirely new approach. What we have done is to commit to a satellite that will completely change the concept of satellite broadband, put satellites in a new league in mainstream consumer services and offer a solution to resolving the digital divide. Taking up the challenge of the Internet marks the opening of a third chapter in the satellite sector which began as a purely professional technology and continues to flourish with satellite broadcasting. Current satellites are simply not adapted for cost-efficient consumer Internet applications, which are all about one-to-one communications rather than the point-to-multipoint feature of broadcasting. We initiated the revolution of conceiving a satellite called Ka-Sat equipped with a very high number of spot beams to optimize the resources on board and allocate them to the people that really use them. In our opinion, we have found the best compromise that can be obtained with today’s technologies. We have created a system with a throughput of more than 70 gigabits per second, able to deliver high performance to over 2 million households. We can reduce the cost per bit by at least eight times and will be able to operate a broadband service that offers the equivalent prices of ADSL.
 

 
Berretta: It is well known that we are open to external growth opportunities that complement our own activity, and Hellas-Sat could be a good fit. However, our main focus is on our organic growth driven by our ambitious program of seven launches from now to 2010. This new capacity will meet three fundamental objectives — renew capacity at a certain number of key orbital positions, enable some satellites to be relocated to other locations and increase in-orbit security, notably at the Hot Bird neighborhood, which generates 40 percent of revenues, and at 7 degrees East, which generates a further 10 percent of revenues.
 

 
Berretta: Yes, definitely. The role of satellite in high-speed digital environments is clearly asserted with that fact that Orange, the world-leading broadband TV operator, is using it to complete their coverage. What Orange is doing by proposing to deliver TV by satellite to the 50 percent of French homes not eligible to receive it via ADSL is a model for everyone else. There are similarities between Rupert Murdoch’s strategy and what Orange is doing to find creative solutions to develop triple play. BSkyB is a satellite TV player who acquired Easynet to add broadband to the mix while Orange, as a terrestrial player, is looking to achieve the same objective but is coming from the opposite direction.
 

Berretta: We have a big launch program and want to benefit as soon as possible from this new capacity, as we are currently running at a more than 93 percent fill factor. One of the main challenges is on the launch side, with access to space a huge issue right now. The military effort in the [United States] is absorbing American launchers. There is huge pressure on Ariane, high launch costs and not sufficient choice and flexibility for operators. Even for our company, which has planned well ahead, access to space at a reasonable price in the future is a big concern. We have taken the precaution of signing a number of launch contracts: three Ariane, two Sea Launch, two ILS, which gives us flexibility for delivering our satellites into orbit and achieving our objectives of renewing and increasing capacity as well as raising in-orbit security.