Telekom Austria enters satellite TV business with Eutelsat

Telekom Austria Group to extend multimedia business in CEE to Satellite with Eutelsat

• New ‘direct2home’ B2B platform for satellite Pay TV
• Extension to Satellite TV as the next step to convergence
• Central and Eastern Europe as a profitable target area due to digitalization of TV signals
• Croatian subsidiary Vipnet as first showcase
• EUTELSAT 16A satellite selected to host new platform

Telekom Austria Group today announced with Eutelsat its entry into a new business field of Satellite TV. The announcement was made at a joint press conference at the International Broadcasting Convention (IBC) in Amsterdam. The solution involves a new B2B Direct-to-Home platform uplinking TV signals via Telekom Austria’s earth station in Aflenz/Styria to the EUTELSAT 16A satellite at the 16° East position for broadcasting to Central and Eastern Europe as well as wider regions of Western Europe. The term DTH (Direct To Home) stands for the reception of TV signals via an antenna installed at the home of the customers. DTH as a reception technology can be used for Pay TV as well as for free-to-air channels.

Satellite TV as the next step to convergence

In 2007, the Telekom Austria Group introduced its first convergent offers to the Austrian market comprising fixed line, mobile and broadband. Since then, different product combinations such as A1 TV, the IPTV offer of the Group, have been successfully commercialised. Following acquisitions concluded in Bulgaria in 2010 and Croatia in 2011, convergent product bundles have been launched in both countries. The existing TV offers based on IPTV and cable can now be extended by satellite technology, taking convergence to a new level.

“The Telekom Austria Group has a long international tradition and expertise as provider of satellite services. We are active as a TV provider for IPTV as well as cable. In order to leverage further potential, we are combining the available infrastructure and in-house know-how built up in the fields of satellite and TV content to a new business field”, explained Reinhard Zuba, Group Chief Marketing Officer of the Telekom Austria Group.

For example, A1, the Austrian subsidiary of the Group was responsible for the worldwide distribution of TV signals during the European Football Championship UEFA EURO 2008 and was also a subcontractor of the Skiing World Championship in Schladming, Austria, earlier this year. The technical basis for the distribution of TV signals and data is the Group’s high performance backbone in Central and Eastern Europe (as well as in Western Europe via the partnership with KPN) and the Aflenz/Styria earth station which is embedded into its infrastructure. The Aflenz earth station hosts more than 50 antennas, uplinking signals to satellites for broadcasting to target regions.

Broadcasting as a new B2B business field

“Whereas Western Europe has virtually completed analogue switch-off, more and more Central and Eastern European countries are in the process of transitioning into digital. This trend represents significant growth potential for us as DTH providers in a market of approximately 75 million households,” said Stefan Amon, Director of Wholesale, Telekom Austria Group. DTH is the preferred route to digitalisation because the consumer transition can be implemented easily, quickly and cost-efficiently. Stefan Amon added that the Central and Eastern European Pay TV market is also evolving as a result of consolidation. However, the technical incompatibility of platforms often prevents end-customers from accessing premium TV entertainment.

In response, the Telekom Austria Group has designed and implemented an open broadcasting solution seamlessly combining one earth station, one encryption system and set-top boxes from multiple suppliers. Its B2B “direct2home” solution is aimed at two target groups:

• Broadcasting companies: Via Telekom Austria’s DTH solution, broadcasters can extend their footprint in the CEE, taking advantage of the reach of EUTELSAT 16A. The solution consists of a seamless connection via Aflenz as well as various Pay TV programme packages and EPGs (Electronic Programme Guides)
• Telecommunication operators: The Telekom Austria Group is offering other telecommunication companies (IPTV, cable TV and network operators) a “White Label Solution”. Providers can offer their own content to customers with their own branding and use the technical service of Telekom Austria Group. The advantage of this offer is that providers can rapidly extend their market penetration, use cross-selling potential and benefit from a wide range of channels and services without upfront investment.

To support this new direction, Telekom Austria Group has selected capacity on the EUTELSAT 16A satellite located at 16° East, the key neighbourhood for broadcasting in Central and Eastern Europe. Apostolos Triantafyllou, Eutelsat Sales Director for the region said: “Telekom Austria Group’s choice of our satellite underscores the key role played by the 16° East neighbourhood and our ambition to further develop this orbital position. The excellent content already aggregated on EUTELSAT 16A and its established audience can benefit telecom operators who are seeking to quickly and efficiently bundle digital broadcasting with traditional telecom services.”

Vipnet multimedia company is the first DTH showcase

In 2011, Vipnet, the Croatian subsidiary of the Telekom Austria Group has entered the TV and fixed line business through its acquisition of B.net, a leading cable operator in Croatia. Through the successful integration of B.net, Vipnet has transformed into a convergent provider on the Croatian market. Since then, Vipnet has closed three more acquisitions in the fixed line business, further strengthening its position as a convergent player. In March 2013 Vipnet also acquired Digi Croatia, a provider of DTH services.

Vipnet will now use the new direct2home platform of the Telekom Austria Group in order to migrate Digi Croatia subscribers to the new platform and to the EUTELSAT 16A satellite. The new offer will be significantly improved in terms of range of services and image quality. Vipnet uses MPEG4 hybrid boxes which also enable a return channel via broadband (fixed line or mobile).

“With the direct2home platform, migration is easy and quick for subscribers. Using Telekom Austria’s new product portfolio, we are not only able to reach areas where we have our own fixed line infrastructure but we can also offer satellite TV across Croatia in one go. This is particularly valuable for rural areas and is a huge strength in the traditionally strong Pay TV market in Croatia,” said Adrian Jezina, former Director of B.net and now Member of the Board at Vipnet. Adrian Jezina also stressed the importance of product bundles which lead to a lower churn rate, meaning a lower rate of changing the provider. By leveraging other Telekom Austria Group technologies like Bitstream or LTE other synergy effects are also possible. Using DTH instead of traditional cable TV, product bundles and upselling possibilities are available, economies of scale became possible due to the larger, nationwide customer potential and costs for new customer acquisition are lowered.