Michel de Rosen took over the role of CEO of Eutelsat Communications from Giuliano Berretta in November. For most of the previous decade, he served as chairman and CEO of ViroPharma, a U.S. pharmarceutical company and since 2008 as chairman and CEO of SGD, a glass bottle manufacturer based in France.

Now de Rosen will apply his business expertise as the head of the third largest FSS operator in the world. “I believe that my record of leading international companies and talented teams can be an asset to Eutelsat. I bring experience of an industry (pharmaceutical) that is similar in some ways and different in others. The main common feature is that you work in long cycles. You have to think both in terms of mid- and long-term. If you focus only on the coming months or next year, you are dead.”

de Rosen discusses the challenges ahead and his plans with Via Satellite Associate Editor Mark Holmes. 

Via Satellite: What is your vision for Eutelsat?

de Rosen: I believe that Eutelsat articulated a strong vision for its future under Giuliano’s leadership. We sit at the heart of the digital revolution, and we have multiple engines for growth. Our number one engine is, of course, video, which we think will continue to develop going forward, spurred by HD, 3-D, and so on. We are also convinced broadband is a growing revenue generator. Geographically, we are at the center of a world that comprises Europe, the Middle East and Africa, each region representing significant growth potential. Eutelsat’s approach has been to maximize revenue and value per transponder and to create new sources of growth by moving into frequency bands beyond the Ku-band, as exemplified by the Ka-Sat and Solaris Mobile initiatives. I believe this mix of maximizing value from existing assets and generating new growth engines can continue a track of success and value for shareholders. 

Via Satellite: Is your job more difficult because you are taking over during a difficult economic period?

de Rosen: Of course there are challenges, and some clients are facing issues which we cannot ignore. However, the fundamentals of our business remain rock solid, and 90 percent of our revenues are derived from broadcast and broadband services, which are the fastest growing applications in the FSS sector. The fact that the number of HD channels broadcasting through our fleet went beyond the 100 barrier in November last year underlines real commitment by broadcasters to generate new premium content.

Even during the economic downturn there was clear evidence of new green shoots that will benefit the satellite sector. It is good news for us to hear DreamWorks, Sony, BSkyB and Intel executives get excited on the potential of 3-D for cinemas, pubs and in the home, because satellites will naturally play their role in secure and cost-effective multi-casting of content. It’s motivating for an innovative company like Eutelsat to see European rail companies, who are beginning to compete for business, invest in new passenger broadband services which use satellites for ubiquitous coverage. 

Via Satellite: Would you look to bridge the gap between Eutelsat and SES and Intelsat?

de Rosen: I have not been convinced in my six months at Eutelsat that it is a must to become a global player, unlike other industries such as software or pharmaceuticals, where it is essential in order to sell products worldwide and offset huge amounts of R&D. As a satellite company, we are not obsessed by size, but we are obsessed with generating growth, with operational performance, customer satisfaction and creating value for shareholders on the long-term. In other words, our mantra is quality not quantity; excellence, not size. I believe that it is certain that the most important growth engine for Eutelsat over the next years will be organic growth, and I believe this could be complemented by focused deals, which could be small-to-mid-sized acquisitions, and small-to-mid-sized joint ventures. ProtoStar was a good example of exploring opportunities but also showing financial discipline. 

Via Satellite: Did you push hard to acquire any of the ProtoStar assets?

de Rosen: We made a bid for the ProtoStar 1 satellite. This is a good evidence of us looking at the opportunities beyond organic growth. We had a very rigorous process and came up with a price we were willing to pay. When the auction reached a level that we were not prepared to pay, we decided to stop. I believe this is a good sign of the financial discipline of the company. It has been part of the company culture for years, and I am committed to it remaining so for years. 

Via Satellite: What will be driving revenues in the future?

de Rosen: In the short-term, it’s clear that consumers are watching more television. They are manifestly prepared to pay for premium services, including HD, and pay-TV operators seem confident of further driving up ARPU with 3-D TV, which is expected to start to launch in 2010. In the medium-to-long term, bandwidth-hungry video applications that are both broadcast- and consumer-generated are at the center of a digital revolution that is changing both television and broadband networks. The voice revolution of the 1990s exemplified by mobile phones, followed by the data revolution of the 2000s driven by the Internet, is transforming into an image-based revolution which represents a huge surge of potential value creation and growth. It opens considerable opportunities for our industry, which is capable of connecting main arteries and ensuring that we build an all-inclusive digital environment by directly serving users located beyond range of terrestrial networks. 

Via Satellite: What is the state of satellite broadband?

de Rosen: It is well known that Eutelsat believes that satellite broadband needs a fundamental design overview to reach a viable model. In the long term, you cannot reach a viable solution with existing Ku-band capacity providing wide coverage. It is simply a waste of resources adapted for broadcasting. Right now, we are in phase one of consumer broadband deployment, using Hot Bird 6 and Eurobird 3 to start to build the market, develop distribution networks, raise awareness and convince governments of the need to integrate satellite in national broadband schemes and economic stimulus measures. We will move into phase two later this year with the launch of Ka-Sat that will go into commercial service in the first part of 2011. 

Via Satellite: Do you expect to partner with another operator for Ka-band expansion?

de Rosen: There are different ways of doing business and we could miss opportunities if we were to decide, for example, that we systematically have to own a satellite 100 percent. We have to do both. It then becomes a case-by-case approach. When I look at the level of interest from potential partners and customers in Ka-band, I believe it is likely in the coming years that we shall have some satellites that we will share with partners, not just in Ku-band, but also Ka-band. 

Via Satellite: Are you as enthusiastic about the Solaris joint venture as your predecessor?

de Rosen: First of all, the [Solaris] is a good venture. We are happy to work with SES, and the dialogue between SES, Eutelsat and Solaris management is a professional one. It is when there is a surprise that you can really see if people work well together. It is well known that there have been some surprises, and they have been addressed in a professional way. Secondly, we were clearly disappointed by what happened to the satellite. Thirdly, we concluded the insurance claim in 2009, which was very important.

There is still capacity usable by the payload. The question is what is the best use? The short-term plan for us is to execute demonstrations in five locations across Europe of rear-seat entertainment systems for vehicles with relay to other handhelds through Wi-Fi. We are using this time usefully to work with partners and reassess what customers really want. In the first half of 2010, we should have the results of the first demonstrations and a new action plan. Looking at the overall market for mobile services in Europe in terms of networks, hardware and business models, it does not look like Solaris Mobile is out of sync in terms of timing. 

Via Satellite: How do you hope to position Eutelsat outside Western Europe?

de Rosen: We see ourselves as the world’s number one regional operator in a core region going from Western Europe to Russia and from Africa to India. Going forward, our number one priority is to continue to grow throughout all these areas where we are already strong, and particularly where we see headroom for more growth, for example in Eastern Europe where satellite TV penetration is only 16 percent compared to 31 percent in Western Europe. As you know, our W7 satellite is specifically designed for both Eastern Europe and Africa, doubling capacity at 36 degrees East. With 450 channels, this is Eutelsat’s second largest video neighborhood, after the Hot Bird neighborhood. Anchor tenants with long-term contracts at this position include Intersputnik for Gazprom and MultiChoice Africa. This gives us presence and visibility in Russia and Africa which are two key regions with considerable potential for growth. Our priority is to continue to invest and deepen our presence in the areas where have built solid success and foster new opportunities in emerging markets in our footprint. 

Via Satellite: What are your plans in the Asia-Pacific region?

de Rosen: We have a recent collaboration with ABS which shows we are interested in growing in Asia and in pursuing growth opportunities through partnerships. In our sector, we believe that Asia is the continent with the most intriguing and exciting opportunities. We are not wizards, but it is obvious there is the most economic growth here and that the use of satellites could grow tremendously for both broadcast and broadband services. If we can increase our presence in Asia with partners like ABS, then good, and we are exploring a number of ways to achieve this objective. 

Via Satellite: What would Eutelsat be prepared to do to help Sea Launch and bring more competitors to the launch sector?

de Rosen: It would be beneficial for the overall industry for Sea Launch to be able to continue, and it is certainly a positive sign that they were able to secure debt-in-possession financing by the U.S. bankruptcy court in Delaware without the financial support of their clients. This should allow them to come out of Chapter 11 with a better balance sheet and a rationalized industrial system, and resume their place as a competitive long-term player. We have always assured the management of Sea Launch of our support. Our contribution to their future, and which we have communicated to Sea Launch, is that we are willing to order services from them so they can continue to be a player in the competitive landscape of the launch industry. 

Via Satellite: Do the current dynamics of the launch sector change your thinking in terms of how Eutelsat will procure launch services?

de Rosen: Our basic starting point is that we want to use high-quality launchers and we want to work with an industry with enough internal competition. That is strategic. The way we implement this strategy and do our business with launch companies is tactical and opportunistic. This is not a religion. If we see we can get better deals by buying multiple launches, as opposed to just one, we will consider it. 

Via Satellite: What is your message to the satellite sector?

de Rosen: Firstly, we are still a relatively small industry, which means I can get to know many of your readers very quickly, but it also means we can be forgotten next to the giant telecom companies. So we must unite for our voice to be heard and join forces so others can recognize what satellites can contribute to the world and so governments and decision makers are mindful of having a neutral approach to technologies. Secondly, quality of service is paramount, and we want our customers to be straightforward and demanding so we can further improve our performance. In the words of Bill Gates: “Your most unhappy customers are your greatest source of learning.” Finally, this company has a fantastic wealth of talent which can be leveraged to achieve tremendous ambitions. I believe we can take the company to the next level over the next 20 years if we continue to work with passion, rigor and have openness to new ideas which could be future money earners. We must combine energy, humility and ambition. In this way, we can continue to be the best satellite company in the world.