satellite wars
agreement with Deutsche Telekom AG (‘DTAG’), the former license holder of these rights before it transferred its satellite activity to MB in 2002. Eutelsat has commenced arbitral proceedings against DTAG and MB in April 2011, claiming that it has the rights to use these frequencies beyond October 2013.”
SES’ statement concluded, saying: “Eutelsat also disputes the grant of right of use of these frequencies by MB to SES. SES strongly disagrees with Eutelsat’s position and will vigorously defend its right to use these frequencies from 4 October 2013 on the basis, among other things, that Eutelsat’s rights to these frequencies will expire on 3 October 2013, that nothing prevents SES from using these frequencies as of 4 October 2013 and that the filings pursuant to which MB’s license for these frequencies was issued by the Bundesnetzagentur have priority under the rules of the ITU.”
SES stresses it is launching new, powerful satellites to enhance coverage from 28.2/28.5, and will bring these craft into use during 2013- 2014, as well as the recently launched Astra 2F which will supply the new capacity.
Eutelsat already has an application before the Paris Arbitration Court, which it is asking to rule in its agreement with Media Broadcast. SES is not involved in this action. It is also worth examining the damage this (potential) loss of 500 MHz of satellite capacity could do, and what it could represent to Eutelsat’s revenues. The disputed 500 MHz is about two-thirds of the satellite’s capacity, and equals about 30- transponder equivalents (some are 72 MHz transponders), or around 300 standard-definition channel equivalents.
content distribution
The spirit of the agreement?
Eutelsat is complaining that its 1999 ‘Intersystem Coordination’ agreement with SES was ‘open ended’, which a joint press statement issued on 8 June 1999 seemed to confirm. Your editor has tracked the debate and argument between the two operators closely for well over the past 13 years.
Here’s a brief historical timetable:
• 1989: Eutelsat files to occupy the 29 degrees East slot with a pair of EuropeSat craft. • January 1999: SES wins an ITU ruling in favour of SES at 28.2, thus rendering 29 deg E redundant. • January 1999: Eutelsat appeals against the 29 deg East decision. • 7 June 1999: Both sign a ‘Intersystem Coordination’ agreement, but with conditions. • 2005: SES signs agreement with Media Broadcast, but keeps deal secret. • 2011: Reportedly, SES tells Eutelsat of its intentions.
• May 2011: Eutelsat asks for arbitration with Paris Court, over Media Broadcast’s rights. • Oct 2012: Eutelsat calls for International Chamber of Commerce to arbitrate on SES agreement.
A recent report from bankers Credit Suisse talked about Eutelsat generating $3.54 million/year per transponder at its nearby ‘Hot Bird’ slot. However, revenues from the 28.5 position are said by interested parties to be much less than this, especially at Eutelsat’s ‘wholesale’ rates to the likes of Arqiva and Globecast which sells on the capacity to end-user broadcasters. Of course, the same sort of number could apply to SES if - and it isn’t yet clear that it has - if it has built in these revenues into their own guidance for 2013-14, and beyond. With a results announcement in November analysts will have to ask SES these questions for clarification.
However, while the satellite operators squabble over what is an extremely valuable piece of orbital real estate and where there can be only one ‘winner’ (unless another compromise agreement emerges) it seems the actual broadcasters will not be inconvenienced. It seems they have been made aware of the problems and told that any switch from Satellite A to Satellite B will be seamless. Of course, the one group which will always make money out of these sorts of problems are the
The way it was. Romain Bausch (CEO SES) and Giuliano Berretta (CEO Eutelsat) sign an agreement.
lawyers, and while arbitration might see an eventual resolution, such disputes are rarely solved overnight. In other words this problem could take some time to come to a solution. And just at the moment it isn’t clear what will happen come next October in terms of a practical solution for broadcasters.
Worse, perhaps, is the veiled threat that the 1999 agreement between SES and Eutelsat could now be seen to be ended and this could well lead to a much more complicated life for the two transmission giants.
www.ibeweb.com l november/december 2012 l ibe l 9
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