Belgium-based Newtec provides satellite products and solution to operators around the globe, and is among many companies expanding their IP offerings. Product lines, such as the Elevation product family for the IP trunking market; Sat3Play solution for the consumer IP broadband access; and an IP-based network solution for automatic TV and radio exchange and distribution, all are focused on capturing part of the growing IP market.
    Newtec CEO Serge Van Herck discussed the technology and solutions the company hopes to bring to market in 2009 with Associate Editor Mark Holmes.

Via Satellite: How do you see the IP and satellite worlds blending over the next two years?

Van Herck: IP is definitely the future of our industry. That is something we have been convinced of for many years. Newtec was one of the first companies to go really deep into IP several years ago. We did acquisitions in 2004, for example, when we acquired Tellitec in Germany, which is a company dedicated to the development of software for accelerating, shaping and encrypting IP traffic over satellite. It is clear that this vision is of the highest importance in our industry. It is taking place at this moment in time. It is taking place in the broadcast, as well as the transmission world, where we see more and more IP coming up. This is the way to go. The products we propose are designed with a deep IP expertise.

Via Satellite: What types of solutions and services will you look to bring to market in 2009?

Van Herck: Let’s start with our business line called Professional Equipment and more precisely our Elevation product family. We are bringing out on the market new Elevation product capabilities called Flex ACM which is specifically designed for the IP trunking market. This will enable customers to double the throughput over their existing space segment while providing 100 percent link availability, so doing more with less, with ACM, as well as specifically satellite-based IP capabilities including encapsulation, acceleration, shaping and encryption to name a few.
    When talking about our Sat3Play solution for the consumer IP broadband access, we foresee for 2009, an important technology breakthrough. We are releasing a new technology that will allow us to increase the return speeds up to 1 megabit per second. This is an important capability of the product that will be introduced by the middle of next year. This will enable our customers to broaden their scope potentially, not only to consumers but too SMEs and corporate customers.
    In 2009, we also expect to further roll out our Multimedia Exchange Network over Satellite (MENOS). This is an IP-based network solution for automatic TV and Radio exchange and distribution. All Arab broadcasters in the Middle East that are members of the ASBU (Arab State Broadcast Union) have switched now to this technology for automatically exchanging TV and radio amongst them.

Via Satellite: Do you expect 2009 to be a flat year in terms of growth?

Van Herck: It is a question that is very applicable at this time. We are still expecting to see growth for our business next year. We expect a growth between 20 and 30 percent. We initially expected higher growth rates, but we have been looking at the economic environment and reducing our growth expectations. We are still quite confident that we will be able to realise that growth. We have different products like Flex ACM, which enable customers to reduce their operating expenses. In this time of crisis, people are looking less to implement new projects, but are looking more to help reduce operation expenses, and do more with the same capacity. Here, we think we have very good solutions, with very short ROIs, which can range from weeks to a few months, which really helps the customer to improve their business. We expect the digital terrestrial and mobile TV market to experience growth as well. In our core DTH market, we see a stable market. All in all, we remain positive about our growth expectations.

Via Satellite: What are your plans to boost your performance in Asia?

Van Herck: Asia is an interesting market for us. Traditionally, with the exception of China, it was a very small market for us in terms of direct sales of Newtec. We expect next year, with Elevation FlexACM coming on the market, this will be definitely a solution we will be able to sell more directly to different customers like service providers and teleports in Asia. As we have designed and implemented on our Azimuth broadcast modulators the new Chinese DTH broadcast standard last year for the SARFT (State Administration for Radio, Film and Television), we expect to further reap the benefits of this in 2009. Asia is therefore still to come for Newtec.

Via Satellite: What other markets will you look to target?

Van Herck: Currently, we have 50 percent revenues coming out of Europe, and the rest outside of Europe. We expect that the out of Europe part will grow more rapidly than our European sales. As last year, the United States will definitely be an important growth engine for us. The Middle East and Africa are also growth engines for us. The Elevation FlexACM solution will be a major growth enabler for the IP trunking market around the world.

Via Satellite: What are the major strategic challenges facing the company over the next 12 months?

Van Herck: I want to increase our brand awareness outside the TV broadcast industry. In the TV broadcast industry, we are quite strong. At least one quarter of the world population looks at television with Newtec equipment being involved. We still have a way to go to increase our market share when it comes to telecom service provider type of customers. That is for us a big challenge in 2009 to enter into that type of market. Elevation FlexACM will be a major workhorse in that environment. Secondly, we want to increase our sales and marketing capacity so we can increase our revenues and market share. While keeping our technology innovation advantage, I’m also extending our focus to become a more customer-oriented company. Finally, with the current market conditions, I need to keep our operational costs under control to face any potential market slowdown.

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