Financial Times FT.com
Eutelsat looks to broadband and 3D for growth
By Maija Palmer in London
Published: June 29 2009 22:20 | Last updated: June 29 2009 22:20
Eutelsat, the French satellite operator, is pushing into new markets such as broadband internet services and 3D television in order to boost revenue as the television market stagnates.
"Normal TV has a limit," Giuliano Berretta, chief executive of the company, told the Financial Times. "The rate of increase in TV revenues slowed this year. We can't have double-digit growth unless we can grow the broadband business and a new type of TV consumption."
Eutelsat, which provides satellite connections for TV companies such as Sky Italia, has seen revenue growth in its main television business slow from double-digit increases to just more than 5 per cent growth in the first nine months of its current fiscal year.
Satellite TV markets in western Europe are gradually becoming saturated, and although the industry is hoping for an uplift from high-definition TV, this has yet to see widespread take-up.
TV accounts for about three-quarters of Eutelsat's revenues, but Mr Berretta is hoping that new businesses can help accelerate growth.
Earlier this year, the company launched Tooway, a satellite-based broadband service that can provide fast internet connections rivalling speeds available through a fixed-line connection. Priced at €35 ($49) a month, this has the potential, for the first time, of making broadband via satellite appeal to the mass market.
A number of European countries, including the UK, France, Germany and Italy have made commitments to guarantee broadband internet access to all citizens, and satellite may be a key way to reaching the more remote communities. Swisscom, the Swiss incumbent telecommunications operator, and FastWeb, the Italian internet service provider, have recently signed deals to use Eutelsat's broadband services.
Eutelsat plans to spend about €350m next year on the launch of a new satellite that will be able to handle these broadband connections more efficiently. Mr Berretta said he hoped broadband would account for at least €100m in annual revenues – about 10 per cent of sales – within the next few years.
At the same time, the company has launched a number of pilot projects in 3D TV, in an effort to stimulate development of this market. In July, for example, the company will be sending a 3D broadcast of a concert by French singer Julien Clerc in La Rochelle to several locations around France. The company also worked with Sky Italia to broadcast a basketball game shot in 3D.
3D technology is gaining popularity in the movie industry with a number of recent films, such as Monsters vs Aliens, Coraline, and James Cameron's forthcoming Avatar, all made in 3D. In TV, the technology is in its infancy, although BSkyB is making investments in it, and has predicted that a 3D TV service could be rolled out within the next two to three years.
Mr Berretta is determined for Eutelsat to be at the forefront of the technology as it develops.
"3D is a real revolution. We are creating a specialisation in shooting and transmitting it," Mr Berretta said.
Copyright The Financial Times Limited 2009
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