by Robustiano Fernandez

Europe is a study in contrasts. To many overseas observers, it presents an increasingly unified and sophisticated front, and in many respects Europe is a united, if complex, society. But underneath the surface, the story is often quite different.

"Whatever one might think on the other side of the Atlantic," explains Astra spokesperson Yves Feltes, "Europe, in reality, is still a highly fragmented market according to the different nationalities and language barriers."

In many respects, Europe is the most mature market for the satellite industry. Digitization is a major theme that crops up in any discussion of the region, and the European DTH market in particular is several years ahead of its overseas counterparts. But as Feltes comments, the region is also highly split, especially from a regulatory standpoint.

According to Gerry Oberst, a partner in the Brussels office of the Hogan and Hartson law firm and a specialist in regulatory matters, the European Union (EU) has made promising steps to foster satellite applications throughout its member states. The problem lies with the fact that larger pan-European efforts, which are mostly conducted under the CEPT organization (a collection of European telecoms administrations with a larger membership than the EU), are considerably less efficient. Oberst points to CEPT’s lack of enforcement powers as the key limitation to its effectiveness, which results in a tendency to put forth small fixes that are not implemented in all CEPT members. Oberst does hold out hope that next year will see further liberalization, with broadband concerns leading towards a harmonized regulatory structure with greater reliance on less burdensome rules, such as blanket licenses and one stop shopping arrangements for licenses.

Satellite broadcasting in Europe is dominated by two major players, the Societe Europeenne des Satellites (SES)-backed Astra service, and Eutelsat’s Hot Bird service. Both services feature sizable fleets and multiple collocated satellites.

For Astra, the past year has seen the launch of the first commercial Ka-band payload for Europe on the company’s Astra 1H satellite. This satellite, launched on a Proton from Baikonur this past August, has been added to Astra’s massive lineup at the 19.2 degrees E orbital slot, making it the eighth satellite to be collocated at this position. This impressive feat of collocation is another world first for Europe and Astra, and, according to Feltes, is the first instance where the entire Ku-band spectrum, from 10.7 GHz to 12.75 GHz, has been utilized, to say nothing of the additional Ka-band capacity.

Astra is also departing from its comfortable niche in television broadcasting and venturing into the newly emerging market of data broadcasting as well. The service, called Astra-net, was launched in 1998, but return-path capabilities will not be added until the beginning of next year.

Eutelsat as an organization has a much larger scope. The inter-governmental organization (IGO) has a significant role in Europe’s DTH market, but also provides the full spectrum of satellite services, from FSS to MSS. In particular, Eutelsat has introduced a new Skyplex service that takes advantage of the digital revolution by placing the role of multiplexing digital signals in the satellite itself. The practical result of this innovation, according to Antonio Arcidiacono, head of multimedia services, is to lower the cost of uplinking significantly, thus lowering the threshold for entry in the European broadcasting market. Just as digital compression allowed broadcasters to reduce their transponder costs from millions of dollars to hundreds of thousands, this in-satellite multiplexing will further reduce the costs into the tens of thousands.

The second big development for Eutelsat, one which the entire European community is watching very closely, is the IGO’s upcoming privatization. According to Jean-Paul Brillaud, director of corporate development and external relations, privatization will occur no later than July of 2001. All of the decisions have been made, the approvals granted, and the implementation is under way.

For major teleports serving Europe, sports and news is driving the ad hoc market, according to Malcolm Campbell, senior business manager for satellite services for British Telecom (BT). BT has been bolstering its facilities in the region with the opening of a new Paris teleport last year, coinciding with the World Cup. This new facility has generated significant contracts out of France, in particular the transportation of French programming bouquets to the Carribean.

But, according to Campbell, the biggest impact has been digitization. "I can hardly think, in the past year or so, of the last significant analog contract," Campbell admits. "The vast majority of our traffic is digital, not just in the contribution of news and sports, but also the distribution of programming."

In the coming year, Campbell sees a significant impact from low-cost fiber. "For the point-to-point market, we are seriously looking at investing in our own dedicated fiber between locations such as London, Paris and New York," Campbell explains. "Less than a year ago, we’d always try to find a satellite solution, but fiber costs have come down so dramatically that fiber is becoming more cost-effective."

From Intelsat’s perspective, the growth of Internet traffic has been the defining event of the past year, according to Tuna Alper, regional director for Europe. Internet traffic is currently 5 to 10 percent of Intelsat’s European business.

The development of Internet 2 service (higher throughput and TCP/IP enhancement allowing speeds in excess of 8 Mbps over satellite) has helped to further emphasize the importance of the Internet in this region. Intelsat is currently linking universities in Europe, the Middle East and the United States employing this new service. The organization is currently filling two full transponders with Internet 2 content.

"Universities have been pioneers in developing the original Internet, and now they are doing the same thing with Internet 2," Alper adds.

Deregulation and increased direct access have also made their marks on the European landscape, Alper continues. This has led to an increase in Intelsat’s private network traffic as well. He credits the newer, high-power satellites such as the Intelsat 8 series with allowing smaller earth stations, thus promoting growth in private network services.

And as always, video contribution continues to be a significant export from Europe via satellite. While the growth has not been as dramatic as some of Intelsat’s other services, Alper notes that it is worth mentioning that offshore communications, primarily to and from cruise lines, have also been on the rise. All told, Intelsat’s European market is divided more or less evenly between three service categories: voice/data, video and private networks. The European market as a whole represents one-third of Intelsat’s worldwide revenues, or close to $300 million.

For the future, Intelsat is wrestling with the issue of direct access to its system. With over 250 direct access users in the region, studies are ongoing to determine how Intelsat’s privatization and restructuring will affect this market.

For Panamsat, video traffic is king in Europe, primarily importing programming from the United States and the Asia-Pacific, and exporting content to Latin America and the Asia-Pacific. Alvarro Gazollo, senior vice president for the Atlantic ocean region, does note that as of the middle of this year, a new focus on Internet content has occurred.

For video, Eddie Franklin, managing director of Panamsat’s European office, says that the rise in digital applications in Europe has enabled a huge move towards convergence between video, voice and data. Video streaming in particular has emerged as a very promising application, Gazollo says. He goes on to hint that Panamsat has several announcements due by the end of the year regarding the Internet and multicast/broadband service offerings for European customers.

Franklin notes that Panamsat’s European broadcast customers are very excited by the proliferation of the IP standard, which is allowing broadcasters to incorporate new value-added offerings to the traditional video feed.

GE Americom is another burgeoning mega-operator that hopes to expand its participation in the European marketplace in the months ahead. "Our pending acquisition of Columbia Communications will allow us to offer seamless transoceanic satellite services to and from Europe-especially value-added Internet connections," says Andreas M. Georghiou, senior vice president of global satellite services.

Perhaps more so than any region, Europe represents a contrast between unity and diversity. The efforts of the EU, and the formation of a European voting block at ITU meetings, has given the impression of a united European community. But considerable efforts lie ahead before this perception becomes a practical reality. In the meantime, technological innovations such as the Internet, multicasting and the digital revolution continue to change the satellite landscape both in Europe and abroad.

Robustiano Fernandez is Via Satellite’s Senior Editor.