September 14, 2013 13.48 Europe/London By Chris Dziadul
Telekom Austria has entered into a partnership with Eutelsat to launch a new B2B DTH platform targeting principally Central and Eastern Europe, as well as wider regions of Western Europe, via 16 degrees East.
Speaking in a press conference at IBC, Reinhard Zuba, group chief marketing officer, Telekom Austria Group, said that satellite TV is the company’s next step to convergence, in a process that began its home market in 2007 and continued in Bulgaria and Croatia following acquisitions in the two countries.
Telekom Austria is bullish about the prospects for its new business line and forecast a 6% growth rate of pay-DTT in CEE by 2017. This would result in 7.3 million new pay-TV DTH households in CEE by 2017.
Stefan Amon, director wholesale, Telekom Austria Group, expanded on the theme by saying that consolidation and digitisation in CEE opens the window of opportunity for the new pay-TV platform.
When asked about the business model being adopted by this white label service, he said it has to be developed with the customer.
The telco’s focus is on leveraging its infrastructure. Apostolos Triantafyllou, regional sales director, meanwhile said that the launch confirms that TV is needed for convergence and satellite remains key for seamless delivery.
“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,dDirector of wholesale, Telekom Austria Group. DTH is the preferred route to digitalisation because the consumer transition can be implemented easily, quickly and cost-efficiently.
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 combining one earth station, one encryption system (for which Conax has been chosen) 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.
Telecommunication operators are the second target group. 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. In addition, the Telekom Austria Group offers different kinds of set-top-boxes.
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.”
Eutelsat 16A had been chosen by Telekom Austria for its exceptional reach, not just in CEE. It is also a neighbourhood with uninterrupted channel growth.
The first company to deploy the new platform will be Telekom Austria’s subsidiary Vipnet. According to Adrian Jezina, member of the board, Vipnet, it will be implemented in four months. Some 70% of Vipnet’s customers take bundles and it would like to see a similar figure with DTH.
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).
“Using Telekom Austria’s direct2home new product portfolio, we are not only able to reach areas where we have our own or leased fixed line infrastructure but we can also offer satellite TV across Croatia in one go. This is particularly valuable for rural areas. Being able to offer fully convergent product portfolio over the whole country is a huge strength in the traditionally strong Pay TV market in Croatia,” said Adrian Jezina, former CEO of B.net and now member of the board at Vipnet.
Jezina also stressed the importance of product bundles which lead to a lower churn rate, meaning a lower rate of customers changing their provider. Using DTH in areas beyond the cable infrastrcture’s reach with other Telekom Austria Group technologies like Bitstream or LTE make product bundles and upselling possibilities soon available. Economies of scale become possible due to the larger, nationwide customer potential and lower costs for new customer acquisition. These facts provide additional synergy effects for the user of the “white label solution”.