Eutelsat’s New Broadband Satellite Unlikely To Satisfy Pent-up Demand

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PARIS — Satellite fleet operator Eutelsat said its Ka-Sat broadband satellite, which is undergoing in-orbit testing and scheduled to enter service in May, is all but certain to fall short of forecasted consumer demand.

The satellite, with about 70 gigabits per second of throughput, offers 2.5 times the combined capacity of Eutelsat’s 27 other satellites but was nonetheless designed at a time when consumer expectations for satellite Internet were much lower, said Yves Blanc, Eutelsat’s director of international and institutional affairs.

Blanc discussed the satellite’s capabilities with French elected representatives here Feb. 9. These officials said many of their constituents would accept nothing less than fiber-speed capacity, especially those households in which young people were downloading video, legally or not.

Eutelsat Chief Executive Michel de Rosen has said the company is weighing an order for a second Ka-Sat. But Eutelsat is also waiting for a decision by French authorities managing a public bond issue on whether a proposed Ka-band satellite built with private and public funds will be approved.

This project, called Megasat, would include Eutelsat and French government financing.

Blanc said that even before Ka-Sat is operational, Eutelsat knows it will not be enough. To assure the capacity is spread among a broad swath of Europe, Eutelsat is limiting the number of users per nation and monthly gigabytes of download per customer.

“When we were designing Ka-Sat three years ago, we thought a downlink at 3.6 megabits per second, with an uplink at 512 kilobits per second, would satisfy most users. When a monthly download ceiling was added, it was thought Ka-Sat would be able to serve a large portion of consumers in France, Italy, Spain and elsewhere.”

Eutelsat’s updated commercial offer for its Tooway consumer broadband service is multitiered, ranging from 29 euros ($40) to 90 euros per month, with download speeds of 6 to 10 megabits per second and uploads at up to 4 megabits per second via a 70-centimeter dish.

Like many other nations, France’s government is offering subsidies for the installation of satellite equipment in areas that are not served by terrestrial broadband.

Blanc estimated that in France, where labor costs are higher than in some other European markets, each subscriber should count on spending 500 euros for the complete package including the hardware (300 euros) and the antenna’s installation (200 euros).

As is the case with its Ku-band competitor, the Astra2Connect service offered by SES Astra of Luxembourg, Eutelsat offers customers the option of installing their own antennas, which are equipped with an automatic search function to orient the dish toward Ka-Sat.

Several members of the French parliament said Eutelsat’s satellite offer has suffered from a recent series of television commercials promoting fiber-optic links at up to 100 megabits per second. These ads are often broadcast nationwide, raising expectations in rural areas that the parliamentarians agreed would perhaps never be equipped with fiber links because of the cost.

Blanc said that given Ka-Sat’s likely lack of capacity to serve pent-up demand, Eutelsat is depending on political authorities to determine the priorities for geographic distribution of Ka-Sat bandwidth. “The political leadership needs to tell us which areas are particularly in need of capacity, or we will let the market decide,” Blanc said.

Several officials said existing government maps of digital access were often imprecise, and that this could create problems if one village is given subsidies while a neighboring village is denied.

France already has proved that a consumer satellite offer that is well timed and targeted can meet with success. About three years ago, SES Astra introduced its TNTSat offer to beam a new suite of French digital programming to villages not on the terrestrial grid.

SES Astra announced Feb. 2 that this service has reached 2.65 million subscribers already, with 800,000 added in 2010. Eutelsat’s Fransat offer, which is similar to SES Astra’s but began only a year ago, has passed the million-subscriber mark, which Blanc said is far beyond Eutelsat’s original predictions.

As is the case with other European nations, France has planned the shutdown of its analog television transmissions for 2012 and is offering incentives for customers living in areas where digital programming is unavailable to switch to other services.

“The continued strong growth of TNTSat is driven by digitalization and the analogue switch-off in more and more French regions,” SES Astra President Ferdinand Kayser said in a Feb. 2 statement. “With 14 French regions shifting to purely digital reception in 2011, we expect the growth of TNTSat to continue with strong momentum.”

 

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