SES Said Jumping on IPTV, Mobile Video While Competitors Merge
Changing video habits could mean new markets for Fixed Satellite Services operators, and SES Global said it’s angling to go after them while competitors Intelsat and PanAmSat focus on combining. “Our peer group is preoccupied with merging and there’s a window of opportunity of at least three to five years to go after growth… under circumstances where there will be less competition,” said SES Global CFO Mark Rigolle at the UBS media conference Mon. And the evolving video market could offer SES just that opportunity, Rigolle said.
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As IPTV and mobile offerings splinter traditional video, FSS operators will have chances to feed the same video over the same frequencies, but to “different kinds of headends,” Rigolle told analysts. Feeding cable headends is SES Americom’s traditional business in the U.S., and video fragmentation via IPTV and mobility will multiply that trade, he said: “If you've always been in the business, then feeding another kind of headend -- mobile towers or a the local exchange of a telco network - - is just an extension of the thing you've always done.”
So far, SES has been out in front on IPTV with IP PRIME, its recently announced joint IPTV venture with the NRTC. If IPTV succeeds, it might create more competition for cable companies and DBS operators, but in the process it will save rural telcos from losing customers and, with them, USF funds, the NRTC has said. SES PRIME will deliver 300-plus TV channels to rural telcos, enabling the triple-play for small firms. And BellSouth eventually could be a customer, Rigolle said, mentioning recent discussions with the firm. IPTV via satellite still is seen as a niche market, however. Northern Sky Research in Oct. pegged the market for IPTV via satellite at 10 million-plus households and $436.7 million through 2010.
Satellite industry analysts predict other FSS operators will get in the IPTV game as well -- and they're correct, an Intelsat spokeswoman told us. Intelsat has an internal IPTV initiative in the works, she said, adding that until the Intelsat/PanAmSat merger is finalized, the firms will run their sales and marketing teams independently. Intelsat and PanAmSat are proceeding on new FSS services, too, with no focus lost, the spokeswoman said, referring to SES Global’s comments: “We're continuing to keep our eyes focused on the requests of the markets we serve.”
When it comes to the mobile video market, SES divides satellite service in 3 ways, Rigolle said. Satellites can make video mobile by: (1) Directly transmitting video from satellite to a handheld, already done in Korea. (2) Directly sending video from satellite to a plane, train, or vehicle. (3) Feeding video from a satellite to terrestrial wireless towers for retransmission over a wireless network. Rigolle said SES is eyeing the latter 2 options. “The great thing about cutting the market that way is that we can address the last two with our existing C and Ku-band transmissions, so it doesn’t require a special build out.” Wireless towers become the new headends, he said. The alternative for mobile phone companies wanting to widely distribute video “is to fiber all of those headends” at a significant cost, Rigolle said.