Cato Halsaa has been CEO of Telenor Satellite Broadcasting (TSBc) for well over a decade and has led the satellite operator to a strong position across a number of industry verticals such as DTH and broadcast in the Nordic region. Halsaa is leaving his position as CEO at the end of second quarter this year. TSBc has announced that Morten Tengs will replace him as the CEO this summer.

In one of his final interviews, Halsaa talks about how the satellite industry has changed during his tenure and also the key challenges for TSBc as it gets ready to enter into a new era.

VIA SATELLITE: You have been CEO of TSBc for 13 years. What would you say has been the biggest change you have seen in the satellite industry in this time frame?

HALSAA: One of the big changes we have seen is that previously you saw incumbent telecoms operators running complex operators like Intelsat and Eutelsat. We have seen these turn into very sharp commercial operators. If you look at Telenor, it has become much more commercial as there is much more competition in the marketplace. We have been able to offer new services and respond to customer demands. As customers are using more broadband, we can now provide this. Satellites can now deliver the same broadband where you don’t have access to terrestrial broadband. On the broadcasting side, the move to HD has been a huge change.

VIA SATELLITE: What are you most proud of in your 13-year tenure?

HALSAA: Telenor has moved from being a Norwegian incumbent to being a telecoms company with more than 150 million subscribers in the world. Norway has a population of five million people. What is also key is that Telenor has still continued to invest in the Thor 5, 6 and 7. It is truly a sign that the satellite company is really healthy and I am proud of this. We have created a very solid satellite business.

VIA SATELLITE: As you look out into 2013, what do you see as the potential growth drivers for TSBc’s satellite business?

HALSAA: I would like to split it two ways. If you look at the broadcast market, DTH operators are still adding to their HD channel line-ups. This is proving to be one of the key differentiators in the market, in particular because more and more competition is coming from pay-TV platforms like DTT, cable and fiber to the home. I think this is also strengthened by advertising becoming far stronger. We see a trend, specifically in the Nordic markets of the pan-European broadcaster to convert their channels into regional versions, and even national versions. This increases bandwidth requirements and for broadcasters, it gives them more direct targets of specific markets. In the maritime VSAT business, specific growth is coming from increased oil and gas activity in the Northern regions such as the North Sea. You have fishing and shipping routes in ice-free waters, where there is more demand for bandwidth. We also see a general increase of bandwidth within the maritime industry, which is directly linked to a change on end users’ bandwidth usage – both crew and passengers require more connectivity. There are more bandwidth-hungry applications that need servicing and more smartphones being used.

VIA SATELLITE: In terms of industry verticals such as DTH, broadcasting, oil and gas, maritime, cellular backhaul, etc., which do you think offers the most potential for the company?

HALSAA: We are pretty well-positioned in all of those areas. Since we have started to develop the one degrees west position, we really have created strong coverage for the maritime and broadcast markets. We are also offering customers trunking services in the Middle East from our position at 4 degrees west using our Thor III satellite.

VIA SATELLITE: Are you expecting to grow profits and revenues in 2013 compared to 2012?

HALSAA: We expect to see moderate growth this year. We are operating on higher utilization levels. This year for us is very much about preparing for the next growth step, which is the launch of Thor 7 next year. We are looking to use this capacity to meet existing, as well as new customer demands. We are seeing increased competition in the broadcast markets in Europe and there is still a lot of growth and interest in the maritime VSAT market.

VIA SATELLITE: The maritime market has been one where Telenor has a strong presence. Is the cruise ship market an opportunity for the company? With others such as Intelsat and O3b looking to compete here, is there more pressure on TSBc?

HALSAA: The cruise ship market is an interesting area for us. Our satellites provide high powered coverage in both Norwegian coast and the very popular Mediterranean sea. We are selling to the companies that supply packaged communications services to the cruise ship operators. So, the service providers that are working in the cruise ship market are consistently needing more capacity to cope with pent-up demand for bandwidth.

VIA SATELLITE: In terms of the broadcast market, there has been a lot of talk about the impact of OTT and players such as Netflix and Hulu entering the pay-TV space. Will that impact the satellite industry?

HALSAA: We are following this very closely and trying to understand what the market dynamics really are here. There is obviously a lot of hype around OTT, and we are looking to see what the real impact will be in terms of our capacity. OTT is providing a complementary service to linear TV, I suspect this will be the case for some years to come. In the long term, all of the niche channels and smaller services will be offered on the OTT distribution platform, but we think the bigger broadcasters will continue to focus on providing better and more attractive content. The scalability and bandwidth of satellite will continue to be a very attractive proposition for distributors and broadcasters as HD continues to grow in the markets in which we operate.

VIA SATELLITE: What is your take on 3-D TV and the potential for 4K TV?

HALSAA: I would say 3-D TV has been a bit of a disappointment. We found the best way to do it was not hugely increase the amount of bandwidth needed for 3-D TV. But, bandwidth usage has not been particularly high here.

The movement to 4K TV has started but, realistically, it is still quite a time away from being present in the Nordic region. You are looking at 2017 at the earliest. There are very few cameras, broadcast equipment etc., but the infrastructure is not in place. It takes time before this really catches up. It was only late last year that the main news broadcast in Norway was being done in HD. The national broadcasters have only gradually started to move to HD, the same will be with 4K.

VIA SATELLITE: There has been a lot of talk about potential convergence between the FSS and MSS sectors. What are your views on this?

HALSAA: Previously, maritime was much more about Inmarsat. But, there are increasing bandwidth requirements from customers so we are seeing more operators play in this market. We have responded to this trend, and we now have more capacity available for maritime VSAT use.

Plus, we will add further capacity in 2014 with Thor 7, which has capacity defined for this market. Yes, there is convergence taking place. We have FSS satellites, but we have been supplying capacity to service providers such as Marlink for quite a while. Maritime VSAT is becoming a key market for FSS players.