Broadband via Satellite: Eutelsat Perspective - DLR, 11 February 2004
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25 Years in the Satellite Business 4 Capacity commercialised on 22 satellites, 20 of which are of European origin 4 Serving 5 continents: Europe, Africa, Asia, North and South America 4 Revenues of 715 M€ (2002/2003) 4 Active over a diverse range of industries and markets 4 1300 TV channels 4 750 data networks 4 Mobile services 4 Broadband services 4 Distribution to 107 million homes via DTH or cable 4 27.7% equity interest in HISPASAT
Eutelsat’s Portfolio of Activities VIDEO APPLICATIONS PROFESSIONAL DATA BROADBAND SERVICES NETWORKS Leading operator in Europe Leading operator in Europe Emerging market 75% of 2002/2003 15% of 2002/2003 3% of 2002/2003 consolidated consolidated revenues consolidated revenues revenues Direct broadcasting of Private networks for Internet backbone television channels and radio interconnecting LAN/WAN connections for Internet programmes and extending voice networks Service Providers Television channel Data broadcasting services to Broadband Internet access for distribution to cable networks wide audiences corporate and private users Contribution links Corporate television and Virtual Private Networks via videoconferencing services satellite Professional video networks for programme exchange Professional mobile services Multicasting and distribution of and newsgathering via for messaging and positioning IP content satellite
The Digital Divide: A Reality Projected DSL Coverage in Europe 100% Who is left out? No Access to DSL 10% of the population 90% = 15 million households Mainly in rural areas Coverage of all sites 80% 70% 60% Access to DSL 50% 2001 2002 2003 2004 2005 2006 2007 2008 2009 Part of Europe’s Population is Left Behind Digital Divide: an essential part of e-Europe objectives Source: CMA
Germany in Comparison Germany: Germany: Households Out Households Out of of Reach: Reach: Population Out Population Out of of Reach Reach of of DSL DSL European Comparison European Comparison 7 000 Households 2003 2005 2007 Businesses 6 000 Germany 17% 14% 11% 5 000 4.4M France / UK 30% 22% 14% 4 000 Italy 33% 24% 15% ‘000 3 000 2 000 1 000 0.4M 0 2003 2005 2007 Source: Omsyc
Why Satellite? Available Available Possibility of Possibility of Quick Deployment Quick Deployment Everywhere Everywhere Bundled Offering Bundled Offering 4 No geographic 4 Service available 4 TV constraints within today coverage area of 4 Multicasting satellite 4 Installation normally takes < 2 4 Economics are hours independent of local demographics (see next slide)
Cost Comparison DSL - Satellite Cost of Broadband Access by Technology 300 DSL 250 Terrestrial Euro per subscriber per month technologies: 200 exponential increase Satellite Today in installation costs 150 when density decreases 100 Objective 50 0 1 10 100 1000 10000 100000 Sites per square km
Broadband Services on Eutelsat Fleet Eutelsat Eutelsat platforms platforms and and VAS VAS Partner Partner platforms platforms (examples) (examples) More than 100 distributors 4 Market presence through distributor networks in Europe, Middle East and Africa, providing turn-key solutions to SMEs, local authorities and the general public Î More than 10,000 terminals deployed in Europe at end-June 2003
Eutelsat Value-Added Services Residential 4 Broadband Internet & One-way multimedia services services 4 Broadband IP services Businesses 4 Enterprise network Two-way solutions with services bandwidth on-demand 4 Meshed data networks
Internet Satellite Subscribers in Europe 100 99.4 97.1 (North 76.5 80 76.0 America: 227.5) 63.5 60 53.5 50.5 Satellite is far ‘000 from reaching 40 its potential in Europe! 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2002 2003 DSL 4.65M 14.1M Cable 2.35M 5.1M Source: Digit
Key Challenges to Develop Satellite Broadband Reduce Price Reduce Price Improve Distribution Improve Distribution Raise Awareness Raise Awareness 4 Reduce price gap 4 Incumbents 4 Satellite with DSL (Telcos) have little associated with TV interest in 4 High cost has promoting satellite limited uptake of satellite broadband 4 Small service 4 Terminal: 900€ providers and 4 Subscription: distributors often 120 - 500€ cannot provide adequate marketing and customer support
How Can the Public Sector Help? 4 The public sector can play an important role in the development of broadband via satellite 4 The short-term objective is to jump-start the industry 4 The objective is to enter into a virtuous circle of subscriber growth and decrease in cost of service 4 A program of 300K terminals over 5 years would bring the terminal down to 550€, 1M terminals to 270€ 4 Several measures can make a significant difference 4 Fiscal incentives in order to reduce the cost of the terminal (see next slide) 4 The public sector as a customer 4 The public sector as an aggregator for third party customers
Example of Fiscal Incentive: France 4 The French Government has recognised satellite as the best solution to reduce the digital divide 4 Priority has been given to the business sector in order to retain employers in underserved regions 4 From 1 January 2004 to 31 December 2006, the cost of a satellite terminal can be deducted from corporate profits
Medium-Term Objectives 4 The cost of broadband access via satellite can be dramatically decreased with a new generation of satellites 4 Dedicated to Internet access 4 Such a programme has to be initiated by the public institutions, with the involvement of private companies from the beginning 4 Government support especially in R&D for space segment and terminals 4 While this could be done on a national level, a European solution would be preferable
Thank You! Holger Ischebeck Business Development Manager Eutelsat S.A. Tel. +33 1 5398 4774 hischebeck@eutelsat.fr
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