Satellite operator SES had a “year of solid growth in 2008” and is set for another despite the global economy, CEO Romain Bausch said in a financial briefing. Demand for capacity for video and telecommunications services continues strong and isn’t likely to fade, he said. SES recurring revenue rose 6 percent in 2008 to $2.1 billion, and recurring EBITDA was up almost 5 percent, Bausch said. The board proposed a 10 percent dividend increase, he said. “Recurring” EBITDA is meant to measure underlying revenue and operating cash flow by discounting for considerations like currency exchange fluctuations and one-time items, the company said. Revenue is expected to jump 7 percent this year, Bausch said. The global financial downturn won’t affect demand for satellite video transmission, Bausch said: Consumers aren’t cutting spending for satellite TV, so operators aren’t suffering. SES’s public service broadcast customers are also safe because they're mostly financed by governments, he said. Commercial TV channels, “obvious risk categories,” aren’t thinking of cutting satellite capacity essential to their business, Bausch said. And the U.S. and other governments are increasingly using commercial satellite capacity to meet their communications needs, he said. SES launched three satellites last year, Bausch said. Three more are to launch in 2009, which began Thursday with the orbiting by Arianespace of SES New Skies satellite NSS-9, the 40th spacecraft in the fleet, together with Eutelsat’s Hot Bird 10 satellite, he said. NSS-12 is scheduled to launch in Q3 and ASTRA Q4, Bausch said. Nine other satellites are in the pipeline, he said. SES’s joint venture with Eutelsat, Solaris Mobile, launches in March, offering video and data services for mobile handheld devices and automotive and transport infrastructure-related applications, Bausch said. Solaris will allow SES to move into satellite radio, but Bausch said there are so many big players looking to acquire the U.S. market that “we don’t think we should try to swim in that pond.” Seventy-nine percent of SES’s 855 transponders were in use at the end of 2008 and expansion is expected this year, Bausch said. Fueling strong demand for capacity, he said, are that: (1) Many SES customers in existing markets with established satellite TV are bringing in subscribers and adding channels. (2) New markets in Asia, Africa, Central and Eastern Europe and India are becoming satellite TV markets. (3) HDTV channels are increasing, adding demand for increased bandwidth.
Legislation mandating storage of Internet and telephone traffic data was founded on the correct legal basis, the European Court of Justice (ECJ) ruled Tuesday. It tossed out a challenge to the EU data retention directive by Ireland and Slovakia, saying the measure relates to internal market, not police matters, as the two governments claimed. Digital rights activists said they're confident the controversial directive will still be struck down on human rights grounds.
A Paris appeals court upheld a ruling cancelling Apple’s exclusive iPhone deal with France Telecom/Orange. The December decision by the Competition Commission criticized the agreement for going too far in the name of “distribution control,” said Christophe Roquilly, director of the LegalEDHEC Research Center at EDHEC Business School in Nice, France. The contract barred retailers chosen by Apple for the French market from selling the iPhone without Orange mobile services, he told us. They could sell “naked” iPhones free of phone providers, but their SIM cards would be locked onto Orange’s network, he said. That prevented rivals SFR and Bouygues Telecom from distributing the iPhone in their stores because they couldn’t offer Orange telecom services, he said. The deal also required Orange to buy iPhones from Apple, and allowed Orange to sell the devices to customers in other parts of the European Economic Space unless Apple had given itself or another retailer exclusive distribution rights there, he said. Dealers selected by Apple to sell iPhones in France could buy the devices only from Orange, he said. The agreement had vertical restrictions with negative effects for consumers, he said. The competition watchdog criticised the ban on cross- resales as well as the five-year exclusivity period, Roquilly said. The decision of the Paris Court of Appeal, which hears all challenges to Competition Commission orders, isn’t surprising given the hardcore restrictions in the contracts, especially those barring active and passive sales, he said. The court stressed that while Orange invested over 16 million euros ($20.6 million) in order to distribute and provide network services for 2G and 3G iPhones, it made a profit of 139 million euros, he said. The mobile operator’s risk was small because the Apple and iPhone brands are well known and because iPhone is so successful in the U.S., he said. Knowing its agreement with Apple was legally risky, “Orange probably planned this scenario” to turn a profit before competitors filed legal action, he said. Now it must figure out how to hang on to its competitive advantage knowing its rivals are going to sell the iPhone as well, he said. The competition watchdog’s decision isn’t bad for Apple because it allows more iPhones to be distributed by more partners, he said. Orange is taking its case to the Court of Cassation, the country’s highest tribunal, he added.
The U.K. government plans a detailed analysis of supply, demand and regulatory measures needed to spur next-generation broadband networks, said the “Digital Britain” report by Stephen Carter, the communications, technology and broadcasting minister. Action may include removing barriers to developing a wider wholesale market in access to ducts and other primary infrastructure, and determining whether public incentives could help deployment.
The Council of Europe moved closer Tuesday to updating its European Convention on Transfrontier Television for the Digital Age. Lawmakers supported recommendations by Andrew McIntosh from the U.K. and the Socialist Group to ask to council’s member governments to approve aligning the treaty as closely as possible with the EU’s audiovisual media services directive. Commercial broadcasters have one concern about the proposal but support it otherwise, said Ross Biggam, director general of the Association of Commercial Broadcasters in Europe.
Strong, active national regulators are the key to better e-communications services and investment, the European Competitive Telecommunications Association said Tuesday. Its scorecard, to be published Wednesday, surveyed 18 EU countries, Norway and Turkey on overall institutional environment, key enablers for market entry and network rollout, national regulatory authorities’ regulatory processes, how NRAs applied regulation and regulatory and market results. The U.K. topped the chart in all categories, followed by the Netherlands, Norway, Denmark and France, the ECTA said. The Czech Republic, Poland and Turkey were last, it said. The poll found ongoing significant differences in NRAs’ regulatory set-ups and how they applied EU telecommunications rules. Many authorities lack full power to enforce the rules, and their independence is not always fully guaranteed, the organization said. Lengthy appeals by communications providers of NRA decisions remain a key source of legal uncertainty in some countries, it said. Right-of- way regimes remain largely dictated by local or regional authorities, with few one-stop-shop authorization systems, it said. Number portability for mobile and fixed services is getting better, but virtually no country can meet the proposed one-day porting requirement in the telecom review package, said the ECTA. Spectrum policy “remains generally conservative” in most EU countries, and next-generation access issues are still largely unresolved, it said. The survey found, among other things, that countries with active regulators tended to have better competition and consumer welfare, and those which scored high in broadband competition also had higher broadband penetration rates, the ECTA said. It tentatively concluded that infrastructure and effective access-based competition may complement each other in stimulating high broadband uptake rates as well as deployment of higher speed services, “both of which are necessary to justify and reduce risks in investments in access upgrades such as fiber to the home.” The results jibe with economic theory suggesting that more competitive markets have lower prices and more innovation driving consumer demand, the ECTA said. It recommended that the European Parliament and Council focus on ensuring proactive and fully empowered regulators and pursue parallel infrastructure alongside open networks and good access rules. It urged national governments to ensure NRAs’ independence, create one-stop shops for authorizing rights of way, streamline appeals processes and divest themselves of shares in incumbent telecom companies. The most valuable contribution policymakers can make toward Europe’s progress is to provide market certainty by “focusing on the goal of at least one fiber ’superhighway’ to each home that is effectively regulated with terms that allow a fair return but do not discriminate in incumbents’ favor,” said ECTA Chairman Innocenzo Genna. Meanwhile, incumbents said recent data showing that Europe lags behind the U.S. and Asia in deployment of high speed broadband networks means EU lawmakers and government ministers pondering changes to telecom rules must make next-generation access networks a priority. Existing rules must be adapted to encourage risky investment in new networks to help Europe overcome its economic crisis, said European Telecommunications Network Operators’ Association Director Michael Bartholomew. ETNO isn’t calling for an end to all regulation but wants the revised rules to include risk-sharing between investors and network access seekers, and more pricing flexibility to allow operators to develop new business models, he said.
Fresh from success at the FCC, large Internet and consumer electronics companies Monday asked EU regulators to open spectrum white spaces to cognitive radio and similar technologies. In a workshop at the Conference of European Postal and Telecommunications Administrations workshop in on cognitive and software defined radio Monday and Tuesday in Mainz, Germany, Dell, Google, Microsoft and Philips Electronics called for a standard approach to license-exempt use of interleaved broadcast spectrum for broadband applications based on cognitive-access technology, said Andrew Stirling of Larkhill Consulting. But officials said technological and financial roadblocks remain.
Compromise on reform of EU e-communications rules is possible only if governments and the European Commission and Parliament are willing to make some concessions, the spokesman for the Czech Republic Ministry of Industry and Trade said Wednesday. The Czech government took over the EU Presidency Jan. 1 and said Tuesday it will try to reach agreement on the legislative package during its six-month term (CD Jan 7 p6). There are many technical and several political areas of disagreement between the Council of Ministers and EU lawmakers, key among them the shape of the proposed new entity for the telecommunications market, the need for greater harmonization of Europe’s spectrum management policy, and whether national rules should be more centralized in order to achieve a single market, the spokesman told us. Although talks are just beginning, he said, “we feel that there is a strong will to adopt the package before the end of this European Parliament and Commission’s functional period.” The Czech government found the original EC proposal “quite ambitious” and not reflective enough of the specifics of national markets, he said. It worked with the French Presidency to secure compromise language among the 27 countries and is glad ministers adopted the text, he said. The Council version “preserves the main ideas of the reform package” to foster more investment in infrastructure, protect users’ rights and refrain from imposing unnecessary administrative burdens, he said.
Telecommunications issues are high on the agenda of the new EU Presidency, it said Tuesday. In addition to tackling a plethora of economic, trade, security and other issues, the Czech Republic, which took the presidency Jan. 1, also hopes to preside over the completion of sweeping reforms to Europe’s e-communications regulations, a briefing paper said. Overcoming barriers through information and communications technologies is a key priority, the Presidency said. That includes a focus on widespread access to e-government services and greater public awareness of illegal and harmful Internet content, it said.
Deutsche Telekom’s offer to invest 2 billion euros in broadband for unserved rural areas in exchange for a regulatory break is “dangerous,” rival providers said Tuesday. The proposed deal comes ahead of various EU and German state and federal elections next year and aims to push out of the market alternative, tailor-made solutions for broadband in rural areas, such as wireless broadband, telecommunications attorney Axel Spies said for the German Competitive Carrier’s Association. Germany doesn’t have a universal service fund, and DT has argued for years that it’s uneconomic to bring broadband to rural parts of the country, he said. Now the incumbent has reversed course, saying it will do that if it receives a “regulatory holiday” from the government, Spies said. The associations believes that competition is necessary to close the broadband gaps, to avoid giving DT back its monopoly, he said. To make matters worse, Spies said, DT wants higher local loop rates in Germany and wants regulator BNetzA to freeze them for 10 years. If approved, DT’s proposal would set back market liberalization and could make rivals’ 40 billion euros worth of investment partly or entirely worthless, he said. This isn’t the first time DT has sought regulatory relief. Its proposal to deploy VDSL in return for deregulation remains tied up in court after the European Commission expressed opposition, Spies said.