Norway’s Telenor Satellite Broadcasting recently rebranded to Telenor Satellite following the launch of its Thor 7 satellite, which will see the company make a concerted effort to expand in the maritime sector.
In an interview at the group’s headquarters just outside Oslo, CEO Morten Tengs tells SatelliteFinance assistant editor Guy Ferneyhough why Telenor Satellite is shifting its focus.
Norway’s Telenor Satellite Broadcasting recently rebranded to Telenor Satellite following the launch of its Thor 7 satellite, which will see the company make a concerted effort to expand in the maritime sector.
In an interview at the group’s headquarters just outside Oslo, CEO Morten Tengs tells SatelliteFinance assistant editor Guy Ferneyhough why Telenor Satellite is shifting its focus.
Guy Ferneyhough: What has the demand for capacity on Thor 7 been like so far? I know there’s been lot of capacity coming online recently, with Inmarsat’s Global Xpress and Intelsat’s EpicNG.
Morten Tengs: Yes there is oversupply in the market – no question. The sat- ellite industry was quite stable for many years, but over the last three years or so there’s been a lot of change with new tech- nology and new providers. Everything has changed.
Our service on Thor 7 hasn’t been properly launched so now the fill rate is low. We are just starting and believe we will see a pretty quick ramp up.
GF: Is oversupply something you expect to be an issue for a long time? Or is that more of a concentrated issue right now because lots of satellites are coming online?
MT: It is an issue now because a couple of the big players have just launched new sat- ellites, so in one blink a lot of capacity is put into the market. It will stay like this for a year or two, depending on the uptake on data consumption. It is difficult to say.
GF: And you obviously started with Thor 7 four or five years ago…
MT: Yes, we started on it before the market changed. Obviously others were planning it in advance, but that wasn’t public.
GF: Would you have done anything differently in hindsight?
MT: There would probably have been a bit more optimisation of the design on the technical side, but not in terms of com- mercial. I think we got the design and the market just about right. I would say the timing is just about right. If we were earlier the hub technology wouldn’t have been as developed and we wouldn’t have had such a sophisticated system.
GF: What sort of fill rate could you end up with?
MT: That depends on the customer mix
because, the more mobile the customers are, the more difficult it is to have a very high fill rate, but we of course try to get it as high as possible. I can’t really say how high at the moment.
GF: Do you think you’ll lease transponders on Thor 7 to other operators?
MT: Yes, that market is a separate focus, but selling capacity to other operators is something we will look at.
We’ve done it before on Thor 10-02, which we co-own with Intelsat, where we lease transponders for the lifetime of the satellite. And Intelsat has bought capacity on our Thor 6 satellite.
I think those kind of arrangements will increase going forward in the industry. It make sense to share assets, like what we see with terrestrial fixed and mobile networks.
GF: Do you plan to acquire any expansion satellites?
MT: We are not in the planning phase.
GF: Will any of your satellites need replacing any time soon?
MT: The next one to be replaced is Thor 10-02. That’s up for renewal in around five years.
GF: And would you look at an all-electric for a future satellite?
MT: It depends on the mission. It could be interesting for us, but they take longer to get into orbit so it depends on the rush. When it’s a replacement mission, it’s interesting. That’s something we will definitely consider in due time.
GF: With Thor 7 you have put the focus on maritime. What services are maritime customers looking for?
MT: Data connectivity. Over time, we will see the same sort of user pattern at sea as we have seen on land with mobile data consumption where there has been tremendous growth. Those needs will be the same when you are at sea, especially in the passenger segment on ferries carrying 1,000 or 2,000 passengers. They will try to connect to Wi-Fi on the ferry and drive the data demand.
Passengers will want to watch streamed football matches when they are on ferries. It’s just a question of getting the price point right, and rolling out the technology.
We’ve done the market research. There’s a lot of fixed ferry routes that go out of GSM coverage very quickly, and if you’re on board a ferry, say from the UK to Spain, you may be 24 hours without terrestrial mobile coverage, and when you’ve got kids and you want to check up on things it’s useful to have good satellite connectivity.
GF: Who are you mainly competing with in the maritime VSAT market? MT: Inmarsat, Intelsat, and also some regional players are active. Everyone is targeting it, with the exception of the pure broadcasting operators. Maritime in European waters is a very attractive market because of the high density of traffic.
GF: What are the growth prospects for maritime?
MT: I think we will see steeper growth than what we have seen so far, especially in certain areas like the passenger segment, where we will see tremendous growth. I think the potential is very high.
GF: And with Thor 7, how much of the capacity do you think will be used for maritime?
MT: I would say something like 80%. It’s mainly for maritime.
GF: And further down the line do you see yourself pushing into any other new segments on the horizon that could be the next push after maritime?
MT: Not that we are looking into now.
GF: Does your business cross over with Telenor’s business at all?
MT: To some extent. We partner for some of the segments we target in the Nordic region, and their terrestrial mobile service can migrate over to satellite connectivity when their handsets get far from shore. We are looking into the potential for more collaboration.
GF: Leading on from that, would you look at targeting other geographic areas where Telenor is active, such as Asia?
MT: Currently we don’t have coverage in Asia, but expanding the geographical foot- print is something we are looking into and how that could be done. We don’t have frequency rights or orbital rights in Asia today so that would be some kind of cooperation with someone else.
GF: But is Asia a region you would look at ahead of Latin America for example, because Telenor already has operations in Asia?
MT: That could make sense, yes.
GF: And do you think that Telenor Satellite still very much fits into the Telenor family?
MT: We think Telenor is a good owner. Whether they will maintain us as an asset we don’t know, but we are happy with the situation.
GF: Moving on to the broadcast market, where you target the Nordic market and Central and Eastern Europe, how are you finding demand?
MT: Demand has been pretty flat for the past couple of years due to the general economic situation in Central and Eastern Europe.
However, on the positive side, there is pent-up demand for HD services and that will come at some point, and then we are very well positioned because 1W is a prime orbital slot so we know we are very well positioned to capture the growth that will come.
GF: And do you think the satellite broadcast market is quite solid? You don’t think that OTT services will come in and take more of that segment?
MT: No. Foreseeably in certain markets it could, but the number of DTH subscribers remains stable in many of the markets we operate in, so it remains an interesting market.
