Broadband via Satellite: Eutelsat Perspective - DLR, 11 February 2004

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Broadband via Satellite: Eutelsat Perspective - DLR, 11 February 2004
Broadband via Satellite:
Eutelsat Perspective
       DLR, 11 February 2004
Broadband via Satellite: Eutelsat Perspective - DLR, 11 February 2004
Broadband via Satellite: Eutelsat Perspective - DLR, 11 February 2004
Eutelsat: Europe’s Leading Satellite Operator,
Worldwide Number Four
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
ƒ Direct broadcasting of           ƒ Private networks for            ƒ Internet backbone
  television channels and radio      interconnecting LAN/WAN           connections for Internet
  programmes                         and extending voice networks      Service Providers
ƒ Television channel               ƒ Data broadcasting services to   ƒ Broadband Internet access for
  distribution to cable networks     wide audiences                    corporate and private users
ƒ Contribution links               ƒ Corporate television and        ƒ Virtual Private Networks via
                                     videoconferencing services        satellite
ƒ Professional video networks
  for programme exchange           ƒ Professional mobile services    ƒ 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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