UK’s Arqiva to expand overseas

UK-based satellite services specialist Arqiva is going through some internal changes, with existing CEO Tom Bennie stepping down once a new CEO is found, and seeing Nick Thompson looking after its newly merged terrestrial broadcast, satellite & media division (and Steve Holebrook running mobile, government & enterprise). Thompson now says that with solid revenue numbers in place Arqiva is still looking to expand overseas.

They are themselves well financed, and each – or all – of them could well consider making further investments in us, and our progress. There would probably have to be some equity investments into the business should that [expansion] happen. But Arqiva also continually looks at potential opportunities from its own resources,” said Thompson. “In other words we are far from closed in our thinking. However, there’s a preference, at least in the short term, to focus on organic growth but even this involves some significant capital expenditure.”

The upside benefit for Arqiva is that while every European nation is committed to its Absolute Switch-Off (ASO) date for TV, they are not all happening at the same time, and even the most enthusiastic governments can slip and slide as regards that final TV date, let alone see delays occurring for unexpected problems. “Then there’s the radio side of the business. Perhaps the bandwidth implications are not quite so major, but it is a huge headache for some nations,” says Thompson. “Here in the UK there have been various dates put forward, some aggressive, some less so. But certainly 2016-2017 is in just about everyone’s calendar,” he adds.

“By and large Europe has not even started to think about radio. Spectrum use is modest, of course, and governments cannot achieve the same benefits from switching off analogue radio, and the costs for broadcasters is significant,” says Thompson. “In the UK we are sort of half-way there, with DAB but we know the signals are inadequate. The analogue system is pretty good, and until the automotive manufacturers gets fully behind digital radio I think progress will be slow. For the UK government, and others internationally, where there is a considerable focus on cost-reduction one has to wonder whether an ASO for analogue radio is economically viable. The UK leads the way, but if we have not yet figured out the right solutions then the rest of Europe is way behind. The commercial broadcasters have next-to-zero liquidity to pay for this expansion, so it is tough to see how it could be successfully managed. It remains a big challenge. The additional digital radio plans that once existed have all but evaporated. They are all hurting, and we are doing all that we can to make their lives easy. This includes supporting contract extensions to their licences. It isn’t a great place to be. I am only 5 weeks into my new job, and I have spent much of my time talking to the key stakeholders involved in radio, including the regulators, and all of them admit there are considerable challenges.”

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