Broadcasting analogue TV signals to Germany since 1990 has been the financial bedrock for SES. German viewers have enjoyed some 40 free-to-air channels over most of those years, and SES Astra has enjoyed the income, amongst the highest paid anywhere on the globe for transponder capacity. Now the glory days are coming to an end. Today’s analogue portfolio for Germany is already down to 33 channels, and Germany’s plan will see those transmissions end for good in April 2012.
SES says nine of these full transponders are already sold, although almost certainly not at the high rates achieved for the analogue broadcasts. SES says the remaining 24 channels will also be sold, some to the German market, and others to French and Spanish broadcasters all keen to tap into Astra’s hottest of ’hot neighbourhoods’ at 19.2 degrees East.
The financial impact to SES’ revenues will resolve itself over a couple of years from April 2012, and SES says that by 2015 it should again be operating at full capacity from 19.2 degrees East. However, last Friday saw SES’ share price on the New York Stock Exchange fall more than 2 per cent as investors digested the news.
Meanwhile SES is looking to expand to new markets – it has new satellites coming on stream shortly for Canada and Mexico, for example, as well as the Middle East – and all as part of an impressive fleet expansion that will see 13 satellites launched between now and the end of 2014.
These new markets will get SES firmly back on track, says chairman/CEO Romain Bausch, and turning in revenue growth nearer 5 per cent per annum, rather than the 3 per cent anticipated for this year.
But to help guarantee these fiscal expectations SES is consolidating some of its back-office activity, focusing in particular on its sales and marketing efforts, and rolling SES World Skies and SES Astra into one entity. This move will cost it €15 million this year, but will see a matching saving in 2012 and thereafter savings of well beyond €20 million.