Encompass Digital Media’s acquisition of TIBA Satellite Services (TIBA) has been described as “the missing piece of the puzzle” as the teleport operator finally has the global presence it really desires. Bill Tillson, COO, Encompass Digital Media told Via Satellite, “Latin America was really the missing piece of the puzzle, and certainly it should not be lost that Norberto (Vitale, CEO, TIBA) has built a world-class facility in the region, and that there is no other facility like it. It is world-class. It was the missing piece of the puzzle. Yes, we can see Latin America from Atlanta, but we felt we needed to be in-region.”
   Doing a deal to expand its presence in Latin America had been a key priority for the company. Tillson adds, “We have built Encompass aggressively over the last few years, and during that time we have made three additional acquisitions, which were all intended to provide us with state-of-the-art facilities in Asia, London, and in the United States. This final acquisition in terms of geographic presence was something we had looked at for a long time.”    
   Encompass is seeing most of its growth take place now in developing markets. Simon Bax, CEO, Encompass Digital Media says, “Despite what people say, there continues to be growth in the United States market. The major growth is taking place in Latin America, Asia, Central and Eastern Europe. We are continuing to see a faster growth rate in those areas compared to the United States.”    
   The deal is somewhat of a surprise given that TIBA was not up for sale and actively looking for a buyer. However, the chance of be part of Encompass’s global footprint, was too good an opportunity to turn down. “Over the last five years, we have seen very, very solid growth in Latin America. So, this has drawn attention. The company was never really up for sale. Sure, people would knock at our doors, but we never really paid attention. One of the concerns our shareholders had was making sure that the company continued to keep growing. We wanted to make sure that not only that any deal was good for the company, and shareholders but also for the people. We definitely saw the fit with Encompass. We liked the way they did business, how they worked with customers. That made us change our minds when thinking of being acquired and teaming up with another company,” Norberto Vitale, CEO, TIBA explained to Via Satellite.    
   The Latin America broadcast market is a hot one for satellite right now. DTH operators are springing all over the region, and the demand for channels, whether SD or HD is on the increase. Vitale says the region “still has huge potential for growth”. He adds, “When you look at the markets of Brazil and Mexico, and the market penetration there, there is still plenty of opportunity for growth. Market penetration of pay-TV is only around 35 percent, where more mature markets like the United States have a penetration of 80 percent. We still not have seen saturation in the market. So, there is still huge potential in terms of market growth. There is a lot of the market still up for grabs.”    
   While markets such as Brazil and Mexico grab a lot of the headlines, Vitale highlights a number of secondary markets in the region which are also show encouraging signs. He says, “Colombia has been very strong. It is probably the third market in importance in Latin America, both for ourselves and our customers. This is both in terms of subscribers and the ARPUs they are getting. Colombia is becoming very important. So, over the last two years, Colombia has seen Telmex come in and becoming the dominant player in that country. So, you also have Peru and Chile. They are both growing incredibly fast. There is more overall growth in these countries. They have been getting their act together in terms of their economies. Those markets have seen significant growth in market penetration. Huge operators are looking to land in Colombia, Peru and Chile.”    
   Broadcasters are looking to grow in region, and the demands for solutions based on fiber, as well as satellite are on the increase. Vitale says, “There are two types of capacity, contribution and distribution. So in terms of contribution and feeding cable-head ends, and there are rough 30,000 cable head-ends in Latin America, and right now, C-band capacity is at a premium. There also has not been a large migration to HD yet. There is a lot of HD channels. But, there is a huge difference between the number of SD channels. Latin America is such a large region, that spot beams will cover that. In the case of DTH, there is a lot of competition, not only between DTH operators, but also between cellular backhaul facilities, and this can be in Brazil, Colombia, Mexico, Argentina, where cellular has been growing in leaps and bounds so Ku-band capacity has been in short supply over the last two years.”    
   Vitale believes there are strong opportunities for DTH players in the region. He says, “DTH operators have a big opportunity. We see DirecTV as one of the main players. They are very strong. Their DTH business is about reaching certain thresholds and from there, things get easier once you reach critical mass. They definitely have an upper hand in the market. We see the smaller cable operators may struggle in the market, as they do not have critical mass, where as DTH operators and the MSOs will take over that market.”