by Chris Forrester
We have managed to pull some very interesting rabbits out of the hat, says Omri Arnon, V.P. of business development at Spacecom, operators of the growing Amos fleet of satellites. Amos has just won a new DTH platform from Germanys T-Telekom, that operates over Hungary. It is a highly competitive area and we have won some good business against some tough competition, adds Arnon.
But Amos, like other satellite operators, is also looking closely at winning new business out of Central Asia, which he describes as a hidden gem of a region. We have looked closely at this whole region and it is a primary target for our Amos-4 craft and possibly for Amos-5 as well.
Amos-4 is slated for launch in 2012 and Amos-5 is planned for launch in December 2010. People may be confused that Amos-5 will arrive before Amos-4, but its simply because we ordered Amos-4 and then had an opportunity to acquire a fast-track satellite in Amos-5 with ISS which is large compared to the existing Amos fleet with 36 transponders, quite powerful and it was a good deal that we couldnt refuse. Amos-5 will come from JSC-ISS with the payload coming from Thales in France.
ISS is the Russian Reshetnev Co., and better known to readers as the former NPO-PM satellite builders of the Express-1000 system. The satellite will be integrated and tested in Krasnoyarsk, Russia.
We see Central Asia as a fast-developing area, says Arnon. There is already considerable VSAT activity there and everyone recognises that it is growing quite fast and with good demand from countries like Kazakhstan and Azerbaijan which are, in some cases, looking to launch their own satellites, which some outsiders may question as to the economies.
Some people might question why Israel, a tiny country with a modest population, would want its own satellite fleet.
For us it was a technology project and it has proved to be a good investment for Israel, says Arnon. We are helped by having a major customer in Israel in the YES platform and this helps enormously. While some satellite operators can make a business out of VSAT, ISP and occasional use traffic, this has never been our intention. We want a strong video presence. While none of us know where these countries are headed, and we have to recognise that each of them have their own national requirement in terms of national broadcasting as well as their own security, that sort of market does not interest us. Kazakhstan has its own satellite [currently with major problems, ED]. Azerbaijan has stated they want their own craft. The countries in Central Asia might also be compared to Africa where the regions are so large that satellite distribution is a logical choice. Contemplating fibre or cable delivery would be a significant cost.
We see these new emerging markets very much like those of Central and Eastern Europe and our focus is very much on video and we see them as being good potential customers. It would be wrong to overstate the opportunities because the region is very much emerging. Disposable income in some cases is extremely modest but we do sense there is more activity in the last year or two in this area in the satellite arena generally, mostly that activity is based on communications but video is also coming on. Channels in their local languages also need to be important and ready for distribution and a portfolio of willing international channels would also be useful, whether in English, French, Arabic or Turkish.
Our Amos-4 craft has steerable beams so is well able to embrace parts of the region and we are including the area in our potential marketing plans. Amos-4 will be positioned in the mid 60 ° locations [between 64 ° E and 76 ° E] and Amos-5 will be in a completely new location for us. The positions we are looking at are quite crowded but we believe we have found a niche, which will give us entry to the market. The challenge of opening a new position means that potential customers do not get the benefit of our existing broadcast neighbourhood. We dont see this as a problem but it means we have to work harder to develop the new position and you start with a single satellite.
While 4 ° West will continue to be our main video neighbourhood, we hope that we will be in a position to develop similar bundles of channels for the new neighbourhoods. Our long-term strategy is to have two satellites at least in each of the locations, but today we admit we only have that capacity at 4 ° West. We all recognise that we cannot turn the clock back, but the past few years have seen very good business come out of Central Asia, purely based on governmental demand, and we could have easily filled up a satellite. There is so much demand out of the Middle East, out of Afghanistan, and prices, even for communications-only satellites, have been robust these past few years.
Video for TV attracts a higher fee per transponder, but if you are not too greedy, you can make a nice profit out of communications. But Occasional Use traffic takes a great deal of administration, but we do offer it and while we very much would like more video, and we are very hopeful that Amos-5 will give us good coverage over this region as well as over Africa, but it would be wrong of us to expect levels as high as 70 percent of video, maybe it will be 70 percent communications.
We recognise that the likes of Astra and Eutelsat are increasingly getting into Value Added Services at a wholesale level and this is an area that is possibly interesting to us, we are talking about it but have yet to agree a solid strategy on how to achieve this. We look at what SES, Eutelsat, Telenor, and others have in terms of a complete solution for their clients where they have fibre as well as satellite communications and this could be interesting for us.
Our view is that if you combine fibre with satellite, then you can make a good return on the overall investment. But it requires significant investment, measured in the tens of millions of dollars, but if we act smartly, perhaps leasing fibre capacity there are ways to do this efficiently. But we also know that we have a lot of work on our hands already and we are only a modest company, says Arnon.
We are very pleased to have added the Hungarian DTH platform to our overall portfolio and we are hopeful of adding another, similar bundle. Our goal was always to have two to three DTH platforms as part of our portfolio and we have achieved those goals. We still hope to add another.
About the author
London-based Chris Forrester is a well-known entertainment and broadcasting journalist. He reports on all aspects of the TV industry with special emphasis on content, the business of film, television and emerging technologies.