Fresh from announcing plans for a third satellite, Martin Foss, CFO of Telenor Satellite Broadcasting (TSBc), tells SatelliteFinance’s Jason Rainbow how the Nordic operator aims to expand across Europe.
TSBc’s new satellite, THOR 7, will cost around…
Fresh from announcing plans for a third satellite, Martin Foss, CFO of Telenor Satellite Broadcasting (TSBc), tells SatelliteFinance’s Jason Rainbow how the Nordic operator aims to expand across Europe.
TSBc’s new satellite, THOR 7, will cost around E164m. As well as bolstering the group’s maritime unit, THOR 7 will also help it meet growing demands for satellite capacity in Central and Eastern Europe.
Jason Rainbow: What is the strategy behind TSB’s maritime focus? What deals are currently in place and is there anything in the pipeline here?
Martin Foss: The maritime market for satellite based data services will continue to grow, and TSBc has an established position in the Northern European maritime market providing VSAT services to a number of maritime service providers.
The types of services demanded by the maritime sector are changing, we are seeking ways to offer additional capacity to meet the growth requirements, particularly as Ku band is in short supply and for that reason we have invested in Ka band.
JR: How does TSBc plan to break the duopoly in Eastern Europe between European giant Eutelsat and national champions such as Russian operator RSCC?
MF: TSBc has an established position in the DTH market in Eastern Europe. From the orbital location 1W from which TSBc operates, we have created a hotspot location, delivering services to nearly nine million households in the CEE.1W is home to the two largest regional DTH operators in the CEE, namely Digi RCS and UPC Direct who operate in the Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Romania and Moldova.
Success in this market is one of the main drivers for the THOR 7 investment. The additional capacity at 1W (through THOR 7) for broadcast services will provide the opportunity to capture market share. TSBc does not plan to offer broadband services via our Ka band payload within Eastern Europe.
JR: How do you anticipate demand for HD and 3D TV in Central and Eastern Europe to change in the near term?
MF: It is generally accepted that the number of HD channels will continue to grow – HD channel bouquets are available on nearly all DTH operators channel line ups and are consistently growing. 3DTV is at an earlier stage in development but there is no reason why 3DTV will not be adopted by markets in the CEE once appropriate content is available.
JR: Will TSBc always raise finance through parent group Telenor, the Norewegian telecoms giant? Could TSBc raise funding independently if it needed to?
MF: As a general rule, Telenor handle funding on a group level to optimise terms and conditions for the group as a whole. We seek funding internally in Telenor based on our business case for the satellite.
For previous satellites we have prepared dedicated funding arrangements, but that was never an issue for THOR 5 or THOR 6. For THOR 7 we might seek export credit financing, depending on terms. We will have to see what Coface and Exim can offer when we are about to sign the contracts for THOR 7.
JR: Following on from your deal to acquire THOR 7, are there any more acquisitions in the offing?
MF: THOR 7 is the third satellite which will be launched in a five year period, but this is hopefully not the end game as we can see other opportunities, however at this stage we do not have any plans.
JR: In addition to transponders TSBc currently owns on the Intelsat 10-02 satellite at 1W, could the group seek to acquire even more capacity on other satellites?
MF: TSBc continually reviews its capacity needs for the provision of services to our markets and customers, if this generates a need to purchase additional capacity on other satellites, we will do so. These decisions are made on a case by case basis.
JR: THOR 7 has both Ka and Ku transponders, how does TSBc see the capability of these bands – particularly Ka – in the future?
MF: There is clearly an industry trend towards the utilisation of Ka band. TSBc has Ka band frequency rights and we see an opportunity to exploit them particularly for emergent services in the maritime sector.
JR: Are there plans to lease transponders on THOR 7 to other operators like TSBc did with previous satellite THOR 6?
MF: No specific arrangements have been made, however we are in discussions with customers regarding capacity on Thor 7.
JR: Because Telenor is partly government-owned, could it arrange hosted payload deals with the government?
MF: There is nothing preventing a hosted payload with the government or any other party, however such a requirement has not emerged.
JR: Are there any plans to increase capacity in the Middle East, where inclined services are currently provided through the THOR 3 satellite at 4W, or in other regions? Could TSBc expand into new geographic markets?
MF: THOR 7 provides growth capacity at the 1W orbital location JR: What about any potential plans to move into consumer broadband?
MF: TSBc has no plans to move into consumer broadband.
JR: Are you able to disclose any more information on plans to award a manufacturing contract for THOR 7 in Q2 this year?
MF: TSBc is planning to announce the manufacturing contract for THOR 7 in the latter part of Q2.
