hdtv via satellite

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Alexander Oudendijk Chief Commercial Officer, SES ASTRA HDTV via Satellite The Prime Infrastructure for the New Television 2nd IPTV Conference, London, 27th March 2006

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Alexander OudendijkChief Commercial Officer, SES ASTRA

HDTV via SatelliteThe Prime Infrastructure for the New Television

2nd IPTV Conference,London, 27th March 2006

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ASTRA EMEA Facts and FiguresSatellite Fleet

12 ASTRA and 2 SIRIUS satellites for Europe, plus 1 specific for Africa andIntercontinental traffic4 new satellites under procurement

Key Features19.2° and 28.2° East are Europe’s prime orbital positions for Direct-to-Home (DTH)23.5° East Direct-to-Cable slot – with development into DTH positioncomplemented by 5°East - with strong coverage of Nordic & CEE countries

Customers Over 330 customers and more than 1600 channels & services

Technical ReachASTRA: 107 million households (45 million DTH/SMATV)

Financials (EMEA, 2005)Revenues: 765 MEUREBITDA: 604 MEUR Backlog: 4,045 MEUR

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ASTRA’s Prime Channel Line-up

Europe’s leading private and public television channels:

Europe’s leading resellers are partners of ASTRA:

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Agenda

HDTV the real context of the upcoming battle:

The HDTV attributesThe eco-system behind its development The satellite advantagesThe role played by ASTRA The expected development

The telco ‘IPTV play’

Their real motivation to get into TV distributionTheir development plans & the associated limitation The potential of Hybrid Satellite-DSL solutions

Cable players lack market power in Europe

Conclusion

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HDTV attributes4-5 times the pixel resolution of standard definition brings brilliant picture quality, particularly noticeable on displays of 42”and aboveConsumers need new HD-compatible set top boxes and HD-ready displaysor projectorsEven with state-of-the-art compression technology, HDTV requires about 3 times the bandwidth of conventional digital transmissionsHDTV fuels the demand for satellite transponders: 2-3 channels per transponder today vs. 8-12 for standard definition. Mid-term about 5 HD channels per transponder will be possible

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The development of HDTV in Europe is driven by market forces and not by the regulator

HDTV in Europe – Driven by market forces

Enthusiastic and competent organizations are driving the introduction of HDTV on a national and European level

StandardizationMarketingDealer & installer education

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The ASTRA role in promoting HDTV

ASTRA is one of the main drivers of the European HDTV introduction

Created one of the first HDTV web sites: www.hdtvforum.org

Convinced manufacturer organisation EICTA to agree on HD logo’s

ASTRA Germany signed co-marketing agreement with

Numerous HDTV related speeches to industry and journalists

Initiated the European HDTV Forum in June 2004

Issued satellite HDTV receiver guidelines to manufacturers

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Infrastructure – Why is Satellite ideal for HDTV?

Compared to other broadcast infrastructures, satellite is ready today for HDTV:No bandwidth restrictionsNo network upgradesNo change to satellites

Only satellite is capable now to deliver a plethora of attractive HDTV channelsMany cable networks need substantial infrastructure upgrades to deliver HDTVDTT has big spectrum constraints which severely limit HDTVADSL networks need substantial upgrades to VDSL to carry IPTV signals in HD format

Satellite is the driving force for the HDTV roll-out in Europe!

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Content – HDTV via the ASTRA Satellite System

Canal+ announced launch for April 2006

Premiere launched 3 HDTV channels on December 3rd, 2005 (e.g. all 64 soccer worldcup matches in HD on ASTRA)

BSkyB will launch an HDTV bouquet in 2006

By YE 2006, ASTRA will already carry approx. 20 HD channels on three orbital positions

Europe’s first HDTV channel HD1 (previously Euro1080)launched on ASTRA in January 2004

Pro7 and Sat1 launched their free-to-air HDTV channelsin October 2005

BBC announced to start HDTV broadcasts in 2006

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Consumer Equipment – Sales of HD Ready screens in Europe Feb. - Dec. 2005 cumulated

2.0 mill. HD Ready TV sets sold in Europe in less than 1 year !

Source: GfK Retail and Technology Jan. 2006 (excl. 4th quarter sales for Belgium, Czech R., Denmark, Finland, Greece, Hungary, Netherlands, Poland, Portugal, Slovakia, Sweden, Switzerland)

Europe: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Netherlands, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, UK

Type of Screens: LCD, Plasma, Rear projection

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Feb05-Mar05

Apr05-May05

Jun05-Jul05 Aug05-Sep05

Oct05-Nov05 Dec05

HD

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ope

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Germany, UK and France to be the largest HDTV markets

Euroconsult Forecast on Households with HDTV-Sets

Reproduction prohibited, © 2005 Euroconsulthttp://www.euroconsult-ec.com

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Forecasts of Households equipped with HD-enabled TV sets in Europe(2003-2015)

Households in million

Germany

UK & Ireland

France

Italy

SpainNordic countries

Rest of Western Europe*

* Includes Austria, Belgium, Greece, Luxemburg, Netherlands, Portugal and Switzerland

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Satellite to be the leading mode of HDTV reception:approx. 40% of European households in 2015!

Euroconsult Forecast on HDTV Delivery Networks

Reproduction prohibited, © 2005 Euroconsulthttp://www.euroconsult-ec.com

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Forecasts of Households equiped with HD Receivers in EuropeBreakdown by Delivery Network

(2005-2015)Households in million

Satellite

Cable

DSL

DTT

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For the telcos, IPTV is a subset of the broadband access market

Telecom operators are proposing triple-play-based TV as a way to minimize revenue risk against cable or competitive DSL triple-play

The risk of not going IPTV for the PTO isTo lose 100% of some customer’s ARPU to cable… or to retain only 20% of the ARPU for those customers who arebuying their broadband access from competitive DSL providers

Benefit of doing IPTV for the PTO is less to capture an additionalARPU of 20-25 EUR/month from video services than to keep thesubscription to their broadband access

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Telco Strategy Creates Market for Hybrid TV Solutions

TOTAL Western European (*) TV HH : 160 M

PC HH : 160 M

BROADBAND HH : 160 M

DSL HH : 105.5 M

BB CableHH : 45.5 M

Competitive Retail DSL : 52.5 M

PTO retail DSL :52.5 M

HD READY: 26 M

Addressable Retail TV Market For Telco SD & HD

Market potential for Hybrid DSLorother with DTH solutions

Retail TV (via cable)

The technological choice of the telco’s & the fragmented broadband access market will createa market potential of about 60 million TV households for satellite based hybrid platforms such as BWA/DTH or DTH/DSL.

(*) Austria, Belgium, Denmark,France,Germany,Greece,Norway,Netherlands, Italy, Portugal,Spain Sweden,Switzerland,UK

Others’HH: 9M

HD READY: 26 M

Assuming that by 2015, all Western European households will be connected via broadband,the fragmented broadband market structure will provide HD capable access (2HDTV+ 20 mbps downstream) to only approx. 50 million households.

The IPTV market addressability is limited by multiple technical and commercial factors

Market potential for Hybrid DSLorother with DTH solutions

HYBRID HYBRID

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Source : Strategy Analytics , 2005

The European cable industry is too patchy to be leader in HDTV development or even in IPTVroll-out. Cable will further consolidate and be, at best a fast follower of satellite on the HDTV in markets where it matters.

Shares of Infrastructures in Europe

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Cable Lacks Market Power in Europe

With the exception of Benelux and Switzerland, cable coverage ispatchy. Hence the cable sector is limited in its ability to compete fortop content deals.

In countries where cable has substantial coverage and/or marketpresence (Benelux, Switzerland, Germany) it has not been aninnovation leader.

A significant number of cable companies are now in the hands ofprivate equity groups that are unlikely to support the investmentsrequired to transition customer bases from SD or even Analogueto HDTV

Current focus of most cable company shareholders is on triple playand RGU (revenue generating unit) development with telco-basedservices (VoIP and high-speed data connection)

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ConclusionHDTV is the ‘name of the game’ for the foreseeable future, and willbe carried already in 2006 in multi-channel line-ups over satellite

The IPTV market development for the foreseeable future will belimited due to the inability of the infrastructures to cope simultaneouslywith multiple HDTV channels and broadband internet access provision

Meanwhile, the broadband market will grow in Europe and will offermultiple opportunities for satellite to combine its strengths withbroadband access providers through the provision of hybrid triple play solutions

Cable will continue to consolidate in order to stay relevant as secondary terrestrial infrastructure. However, cable is not expected to be aninnovation leader in HDTV.

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Thank you for your attention!

[email protected]