[Satellite News 01-13-09] Eurosat, which signed a distribution agreement with SES Astra late last year to distribute Astra2Connect in the United Kingdom, is confident it will reach the breakeven point for the service in 2009 due to strong demand for satellite broadband service.
    “It’s not going to be easy, especially with the current financial situation, but we expect that our aggressive pricing will make sense for those who currently can’t get broadband to sign up with us,” Mike Locke, special projects manager at Eurosat, told Satellite News. “We have been involved in this for over 10 years now and the cost benefit of the Astra2Connect service is, we think, right for customers currently out of reach of terrestrial services in the UK.”
    The Astra2Connect service will be marketed in the United Kingdom and Northern Ireland under Eurosat’s brand name BeyonDSL. “Public estimates of the size of the market vary as widely as the bias of the sources,” said Locke. “But whether it’s the 100,000 or 800,000, there is still a lot of customers who need this service. We think the market is somewhere between the two.”
    Locke believes there will be a strong demand for these services. “There will always be a good market for satellite broadband as long as it’s affordable and convenient to install, as it is the only technology that is completely independent of population density,” he said. “All the other providers require customers to be within reach of the terrestrial infrastructure, and that infrastructure costs money to build so there is the need to connect enough customers to make commercial sense. Additionally, if customers are too dispersed or too far from the exchange or mobile mast, the cost to reach them rises too steeply. With satellite, it’s a flat cost no matter where they live.”
    The deal is also good news for SES Astra, which continues to see demand for its satellite broadband service. “Thanks to our agreement with Eurosat BeyonDSL, we have added another European country to our map for Astra2Connect,” Norbert Willems, managing director of Astra Broadband Services, said. “Even in countries with a high DSL penetration like the United Kingdom, there are still many regions without terrestrial broadband access.”
    But that does not mean that Eurosat will compete directly with terrestrial providers, Locke said. “There’s no point in expecting satellite to compete head-to-head with terrestrial services in areas where those services are available and running well and to expectations, but the way it works is that the telecoms and cable companies need to get their infrastructures loaded with traffic and subscribers so that they can offer exceptional pricing, especially when bundling with other services down the same piece of electronic string,” he said. “However, no one is building large extensions to their networks so if you’re currently in a non-broadband area, that’s the way it will stay, except now, of course, thanks to satellite, there are essentially no ‘non-broadband’ areas, and thanks to Astra2Connnect, people can afford it.”
    But will satellite broadband to households be a difficult sell in the United Kingdom? “It can be a tough sell especially to those who believe the not-entirely-accurate perception that broadband is truly ubiquitous,” Locke said. “Clearly it isn’t. Sometimes we have to wait for a household to try to get traditional broadband before they discover that it’s unavailable in their area. Only then do they look for alternatives and then they appreciate the benefits and availability of our service. We’ve also built up good experience in identifying the geographical areas of so-called ‘not spots,’ and we focus our marketing there. It is a classic case of understanding the needs, identifying the customers and communicating with them.”