SES To Expand Its IP and High-Definition TV Offerings

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ROCKVILLE, Md. – Princeton, N.J.-based satellite operator SES Americom is aggressively pursuing growth opportunities in a competitive environment inhabited by increasingly cautious rivals .

SES Americom is investing “significant” amounts of money to build up its Internet Protocol (IP) television and high-definition television (HDTV) capabilities, said Bryan McGuirk, the company’s senior vice president of North American media services. SES Americom’s search for the new avenues of growth comes at a time when other satellite operators owned by private-equity firms are showing some reluctance to take the lead in chasing the latest innovations.

Underscoring its more aggressive approach, SES Americom, the U.S. unit of Luxembourg-based SES Global, announced an agreement April 18 with Houston-based Crown Castle Mobile Media to deliver real-time television to a wide range of mobile handheld devices. The collaboration is the first of what could become a number of satellite-based mobile platforms for SES Americom to distribute television, data and Internet-access to places that include offshore oil rigs, commercial trucks, airlines and tens of millions of U.S. households.

The arrangement, unveiled at the National Association of Broadcasters conference in Las Vegas, calls for Crown Castle to lease Ku-band capacity aboard SES Americom’s AMC-9 satellite for a planned DVB-H (digital video broadcast — handheld) network designed to broadcast live television to mobile phones and other devices. Crown Castle, a large cell tower company with 10,600 sites in the United States and 1,300 sites in Australia, already has begun deployment of its DVB-H network in selected markets.

Through the agreement , SES Americom will be able to deliver connections to the screen of a cell phone, McGuirk said. SES Americom will use the nationwide reach of AMC-9 , together with Crown Castle Mobile Media’s planned DVB-H network, to provide “first-of-its-kind television broadcasts” in the United States to wireless mobile handsets, he added.

Bandwidth needs are growing for mobile services, McGuirk said. Mobile satellite consumers clearly want video, he added.

“I think this deal is just a reflection of what we have been doing by listening to our customers and trying to anticipate their future needs,” McGuirk said in a phone interview. ” [IP] TV and mobile TV anywhere, anytime is the future for mobile satellite services.”

SES Americom has had a project team developing IP video services for the past 18 months that has been supported by a big investment from the company, McGuirk said.

A parallel can now be drawn between the initial rollout of IP TV and the advent of MPEG 2 video-transmission technology 10 years ago, McGuirk said.

” [IP] is a big deal,” McGuirk said. MPEG 4, which is the newest video technology, is driving important new applications such as IP TV, he added.

Another key growth area that SES Americom has been investing in is HDTV. The company recently announced plans for a third HDTV-dedicated satellite, AMC-18, which should be ready for launch by year-end 2006, McGuirk said.

“HDTV is a great bandwidth user that is fantastic for our business,” McGuirk said. “Right now, there are 14 million homes with HDTV. We expect that to grow to more than 20 million by year-end.”

SES Americom has developed HD Prime, an HDTV cable neighborhood serving the United States that consists of the AMC-10 and AMC-11 satellites at 135 degrees and 131 degrees west longitude, respectively .

“SES Americom has established a strong presence in the U.S. television marketplace though a combination of modern, high-power satellites and business models that have proven successful in Europe,” said D.K. Sachdev, president of the Vienna, Va.-based SpaceTel Consultancy. “Its HD-Prime service offered on HDTV-optimized spacecraft deployed in popular orbital arcs is becoming popular with cable operators. In the [direct broadcast] arena, SES Americom avoided the riskier approach of taking head-on the two established players in the market, DirecTV and EchoStar.”

By deploying capacity in the proximity of current direct-broadcast orbital locations, SES Americom is establishing a viable business by offering capacity to EchoStar, Sachdev said.

Another video trend is the increased amount of ethnic programming that non-U.S. programmers want to be carried in the U.S. market, McGuirk said.

“International programmers now are in a position to make an investment in U.S. carriage,” McGuirk said. “It is a big business across the industry but it has not been a big business for us in the past.”