Telekom Austria getting into the satellite business

Telekom Austria is doing good business in Austria with packages combining mobile communications, fixed-line telephony, broadband Internet and IP-TV. In Central and Eastern Europe, where the group is active in eight countries, it is often difficult to offer product bundles. Combined offerings that also include television cannot be offered everywhere in many countries because of the poor fixed-line telecommunications infrastructure. Thanks to a cooperation agreement with the satellite provider Eutelsat, the group will now be able to offer multimedia services in rural areas in Croatia, Bulgaria, Macedonia, Serbia and Belarus.

New business segment

On Saturday, the Telekom Austria group presented its new satellite television segment at the International Broadcasting Convention (IBC), which is currently under way in Amsterdam. The group hopes that this move will bring growth in Central and Eastern Europe. A key element of the strategy is a new direct to home (DTH) platform, through which the television signals will be transported from the terrestrial broadcasting station that is operated by Telekom Austria in Aflenz, Styria, to a Eutelsat satellite, which will then broadcast them in Central and Eastern Europe.

“Pay television is a growth market in Central and Eastern Europe,” said Stefan Amon, director of wholesale business at Telekom Austria. The market will grow by six percent or 7.3 million households in the next four years, he said. Satellite-based solutions will make it possible to offer pay television in regions with poor infrastructure, and will also offer high bandwidth for HD TV.

Open for other providers

But Telekom Austria does not only want to supply its subsidiaries in Central and Eastern Europe with satellite television, but also plans to make its technical solution – which ranges from data transport and encryption all the way to set-top boxes – to content providers and network operators.

Amon said that many telecommunications companies in the region do not yet have television offerings, and that the market is converging. “Everyone will think about product bundles sooner or later.” Amon also said that the solution will also enable content providers to extend their reach in Central and Eastern Europe. Negotiations are already under way with interested partners, he said.

Apostolos Triantafyllou, head of sales at Eutelsat, said that satellites are a key infrastructure when it comes to broadcasting television signals everywhere in Europe. Eutelsat satellite 16A, which is being used for the new platform, covers roughly 1.3 million households from Norway to Turkey, he said. The satellite operator has been working with Telekom Austria in different areas for over 25 years, and uses the terrestrial broadcasting station in Aflenz as a reference station for its satellite fleet, for example.

Launch in Croatia

The Croatian Telekom Austria subsidiary Vipnet will be the first provider to use the new platform. Customers of the satellite television provider Digi Croatia, which was acquired by Vipnet in March, are to be migrated to the DTH platform in September. This will enable Vipnet to offer product bundles with mobile communications, fixed-line communications and television throughout the country. According to Vipnet director Adrian Jezina, far fewer customers who have product bundles switch to different companies. He said that 70 percent of Vipnet customers are interested in convergent offerings.

Reinhard Zuba, the group’s marketing director, said that adding the satellite technology to the company’s television offerings is a major step for Telekom Austria. “This will bring convergent packages to a new level.”