Eutelsat Sees Continued Growth in Key Markets

by

PARIS — Satellite fleet operator Eutelsat on Nov. 3 reported continued growth in its core television markets and a nearly 26 percent increase in revenue from selling bandwidth to military forces and other government customers in the Middle East and Central Asia.

The growth was particularly notable in satellite television in North Africa and the Middle East, which Eutelsat serves from its 7 degrees east orbital slot; and in Russia and sub-Saharan Africa, which receive programming from Eutelsat’s 36 degrees east position. Eutelsat reported increases of between 12 percent and 41 percent in the past 12 months in the number of satellite television channels broadcast from these two locations.

The addition of the W7 satellite, launched in November 2009 to the 36 degrees east position, has helped spur growth. Eutelsat in January leased 16 W7 transponders to the Intersputnik organization of Moscow for the satellite’s full 15-year life. W7 is equipped to provide the capacity equivalent of up to 70 Ku-band transponders.

The company, which by revenue is the world’s third-largest commercial fleet operator after Intelsat and SES, said sales from video applications were up 8.1 percent, to 195.5 million euros ($273.7 million), in the three months ending Sept. 30 compared to the same period last year. Video accounts for more than two-thirds of Eutelsat’s total business.

The Paris-based operator said it had booked 279 new standard-definition and 92 high-definition television channels on its fleet in the past 12 months. Nearly 90 percent of the new standard-definition channels were in the emerging markets of North Africa, the Middle East, Turkey, Russia and sub-Saharan Africa.

While starting from a much smaller revenue base, Eutelsat’s data business, which includes Internet services and providing cellular backhaul links to mobile phone network operators in Africa, Central Asia and the Middle East, grew by nearly 28 percent, to 47.2 million euros, for the period ending Sept. 30.

Among the major commercial fleet operators, Eutelsat has long been the one that profits most from military and other government activity in the Middle East because of the orbital slots it occupies with good look angles over the region. While the Iraq conflict has begun to wind down in terms of U.S and other allied troops there, Eutelsat and other sellers of satellite bandwidth say they have seen no material drop-off in demand for capacity.

While this is in part due to the increased allied presence in Afghanistan, Eutelsat and other satellite-capacity vendors say they expect business in the region — through civil government presence on the ground, and unmanned aircraft overhead — to remain healthy well after the armed conflicts die down.

For the three months ending Sept. 30, Eutelsat said its so-called “Multi-usage” business — mainly military and other government customers in the Middle East and Central Asia — grew by 25.8 percent in the three months ending Sept. 30 compared to a year earlier, to 28.8 million euros. If currency-exchange fluctuations are removed from the comparison, the growth this year was 14.9 percent, the company said.

Eutelsat Chief Executive Michel de Rosen said the company is on track to meet its revenue goal of 1.12 billion euros for the fiscal year ending June 30 despite the recent loss of its large W3B satellite. The company also reiterated its forecast that average revenue growth would be better than 7 percent per year between 2010 and 2013.

W3B, launched Oct. 28, was declared a total loss following discovery of a leak in its propulsion system.

In response to the failure, Eutelsat will be leaving in place the three satellites it has stationed at 16 degrees east to assure service until the W3C spacecraft, now under construction, is launched in mid-2011. A W3D satellite is expected to be ordered in the coming weeks as well.