Chris Forrester, TBS Contributing Editor
a new satellite beaming towards the Middle East: "NourSat"
(meaning "Light" Sat) is part-owned (30 percent) by
the giant Mawared Group, the same company that has financed
Orbit this past 10 years. NourSat is the name given to a handful
of beams on a new Intelsat satellite operating from 1 degree
West, just a few degrees of arc away from NileSat at 7 degrees
West. NourSat is managed by Omar Shoter, well-known for his
long history with ArabSat.
have exclusive rights for a DTH service from the Intelsat satellite
over the Mideast and we have committed to lease eight 36 MHz
transponders in the Mideast beam and six in the European beam
on the same satellite," Shoter says.
to Shoter, NourSat is "about to finalise an agreement for
the follow-on satellite with Intelsat. We have the right to
access Intelsat available capacities in the region and globally
to sub-lease it to the regional TV and Telecom operators and
customers." He stresses that discussions are currently
on going with "other satellite operators" to provide
satellite communication services, other than DTH services, which
are planned to be launched "from other orbital slots."
Additionally, Intelsat and NourSat are looking together for
interim solutions to "augment the (currently) available
capacity at 1 degree W. in order to meet the expected demand
in preparations for the follow-on satellite."
we at Showtime are aware of the project. With NileSat's
limited capacity, opportunities might lie with NourSat.
We're very happy with Nilesat, but growth might
mean alternate ways of reaching our audience. We
are still in the exploratory stage, but we could
-Peter Einstein, President/CEO, Showtime
it is using NourSat for a duplication of its existing ArabSat
services, although it has no plans to quit ArabSat as yet. Orbit
are also using frequencies on the same Intelsat satellite for
its two-way Internet-via satellite service, which beams all
the wonders of the World Wide Web into the Middle East without
a need for a telephone link. Orbit's TV service went "live"
back in September and the Internet system has been operational
Shoter says what the operation wants is for the Middle East's
three pay-TV operators to come together onto the same satellite:
Orbit's. Which is why, Shoter says, Orbit has only taken 30
percent of NourSat's equity. The rest is open to the Kipco/Viacom
Showtime and Sheikh Saleh Kamel's Arab Radio & Television.
So far, there has been no rush to join the club.
Johnston, Orbit's former CFO and now business development director,
explains the overall strategy, saying that everyone recognises
the need for greater co-operation and perhaps consolidation
within the pay-TV industry.
the past few years the need to achieve greater harmony has come
about because of the free-to-airs," Johnston says. "They
have a different commercial agenda, usually fighting one another
for a decreasing share of the ad-sales pie. They put huge pressures
on content costs, especially in terms of sports. In comparison
the pay-platforms have been much more sensible about their programming
costs, and are behaving much more rationally. Broadcasters from
Beirut or Dubai can have a huge hit show, like Star Academy
or Millionaire, which will give them good ratings and
better revenues for the spots in that particular show. But an
hour later or earlier and they're earning next to nothing. There
is no commercial model for new free-to-air entrants. They are
all eating one another alive, and there are few-if any-European
says that all of these free-to-air companies are totally governed
by what makes sense commercially and strategically. "They'll
want to see us deliver an audience, and what sort of control
can we give them over their own destiny? Can a Hot Spot for
all broadcasters make sense? Our view is that it can. But it
is difficult to predict a time line."
East dilemma is wrapped up in some 240 digital TV channels on
NileSat alone, the bulk of them free-to-air. They provide enough
viewer interest to stymie any real progress in the three rival
pay-platforms, with the possible exception of top-rated sports
coverage. Orbit's theory is that NourSat provides a unique opportunity
for the rival pay-platforms to come together, probably keeping
their own branding and sales efforts, but to at least provide
the viewer with a one-stop shop to buy as many of the pay-channels
that they want. Arab Radio & Television (ART) and Showtime
already operate a single card system (using Irdeto encryption)
and viewers can pick and choose from one another's line-up.
ART and Showtime both use NileSat.
might all agree that sanity needs to be brought to the industry
by some restructuring method or other," Johnston says.
"And this need for restructuring goes way beyond the pay
platforms themselves, important as they are. Having everyone
in one location would be a massive step forward."
implies Saleh Hamza, chief engineer at NileSat. Hamza is right,
at least about one fact. All of the channels are on NileSat,
except those belonging to Orbit. Indeed, there's little doubt
that NileSat is the operational 'hot spot' for the region. Hamza
knows that his capacity is tight. In essence, he has just four
transponders free - and they are only available because of some
basic housekeeping where non-essential (that is non-Direct-to-home)
broadcasters have been shifted out of the way. Hamza wants NileSat
103, a third satellite, to be up and broadcasting within a year
from now. The problem is one of finance: raising the $150m-$200m
to build and launch a large satellite. NileSat is considering
joint-venture partnerships, so-called "soft loans,"
indeed, any mechanism to get the craft built and into operation.
have spoken to many people," Hamza says. "It is still
at this stage in discussions. We have met with Intelsat, and
have another meeting scheduled. We have met with SES in Luxembourg,
and we have frequent meetings with Eutelsat. We've even had
friendly meetings with New Skies, but nothing beyond that. We
are hopeful that something might emerge, but it is too early
to be more specific than this. However, we see real progress
being made within the next year. It has to happen because we
are running out of capacity."
explains, "We could have a relaxed payment scheme from
the satellite manufacturer, and to have part-finance from the
banking sector that's guaranteed by one of our export/import
banks. These are all options, but to be frank the way NileSat
has developed is well beyond our own forecasts and all the initial
feasibility studies. The reason is that any loan we enter into
has a fixed repayment period, of around 7 years. Consequently
to enter into another loan needs careful study as to how the
market is going to develop."
main rival is ArabSat, itself on an expansion drive. Over the
next 18 months or so, ArabSat will take delivery of two giant
satellites. The Riyadh-based operator has already commenced
an aggressive marketing campaign to the industry in readiness
for the first new craft, ArabSat 4A, which is scheduled to arrive
later in 2005. Craig Moll, formerly of PanAmSat, is a consultant
to ArabSat, and admits the satellite operator was "too
sleepy." "The new look, and marketing effort, is but
the first step, and we have to translate this into effort on
fresh customer focus. We want to see a huge leap forward in
terms of our commercial appeal. The only way we can succeed
in this to prove it via improved customer service and action."
us of ArabSat's claimed strengths: "We have more customers,
more eyeballs viewing us, and we are the only full-service company
operating in the region. We have a good story to tell. We're
waking up; we know we are in a fight. We were born in a more
gentle time as a means to share resources and costs amongst
our member states. Today's game is very different and we need
to respond to today's conditions."
disagrees: "We are not worried about ArabSat. We know ArabSat
has two leased satellites today to help cover for their own
problems. The first task, we expect, will be to use the new
satellite to replace those temporary craft. We also know that
our clients are coming to NileSat because of our mass-market
coverage. Most NileSat viewers also have access to ArabSat,
but it seems they watch us most of the time."
right, and 240 channels prove it. Not only the 240 already on
the existing pair of satellites but the 10 million homes estimated
by Dubai's PARC (Pan Arab Research Centre) to be viewing. And
the long waiting-list of would be broadcasters wanting to get
January we start the first-ever private TV channel from Tunisia,"
says Hamza. "We started the first private Kuwaiti TV channel
in October, and this is a new trend. We are investing more cash
here in Cairo in playout, and building new offices and facilities
here to accommodate these new ideas."
a glittering prize awaiting the winner of this satellite battlefield:
high-definition television. America has it, as does Australia,
Japan, South Korea and Brazil. China will make a massive HDTV
introduction starting in 2006, and climaxing in the Beijing
Olympics. And now Europe has caught the HDTV bug, starting with
Germany and France later in 2005, and the UK in early 2006.
Scandinavia and some Belgian and Dutch cable viewers, and European
satellite viewers, can already watch HDTV transmissions. And
few doubt the Middle East will be next.
out, "As we saw at this year's IBC there are many tests
and trials taking place with the aim to reduce bandwidth for
HDTV, and these might also have a greater impact by 2008, so
much so that by 2008 I am sure there will be more than one [Middle
East] HDTV channel on air. One of our clients today has doubled
the bandwidth, using MPEG2, so that the ordinary broadcast images
are better. This is the thinking, and I see this switching to
higher bandwidths to be commonplace for most of our major clients
over time. The new satellite should easily be filled, from this
trend alone. Add in the growth from these new private TV channels
and I think we will fill it. The drivers in HDTV will be sport,
and new and restored films."
broadcasters will be busy with two developments, and top of
their list is converting to digital terrestrial TV, then HDTV.
They might mix both technologies at the same time, and each
country will be searching for the right formula. Most Middle
East countries have yet to create a digital terrestrial system,
so they might ask why bother with today's MPEG2 when MPEG4 is
just around the corner? Public broadcasters have to meet this
challenge," Hamza added.