Eutelsat carries 6,788 channels

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Eutelsat’s DTH broadcast channel count have reduced by 4 per cent this past year (to 6788 channels) while HD channels – included in the overall total – have grown significantly over the past few years. Since June 2017, HD penetration is up 53 per cent, from 1097 channels to 1679 channels at June 30th this year and represents a 24.7 per cent share for HD.

Eutelsat’s data also shows that its African household coverage has grown significantly, by 11.8 per cent this year (24 million homes) and placing Eutelsat as the Number 1 operator over Africa. It is already Number 1 in terms of MENA coverage (58 million homes) helped by its strong position at 7/8 degrees West.

Eutelsat’s broadcast division is responsible for some 61 percent of the operator’s revenues and in the complete year (to June 30th) saw €785 million in revenues. This was a tad lower (down 1.2 per cent) on the previous year, not helped by a couple of transponders returned in Russia and the termination of a contract in sub-Saharan Africa. Eutelsat said it saw “continued dynamism” in the sub-Saharan market.

Overall, and including the company’s other divisions, transponder utilisation grew marginally from 69.2 per cent to 69.7 per cent, through 960 utilised transponders. Eutelsat expects to improve slightly this fill rate at 70 per cent. Its contracted backlog fell from €4.4 billion to €4.1 billion worth 3.2 years of revenues.

CEO Rodolphe Belmer told analysts that its strategic roadmap looked good, helped by new satellites coming on stream.

Giles Thorne, equity analyst at investment bank Jefferies, seemed generally impressed with Eutelsat’s performance. “After a decade of Fixed Broadband mediocrity, perhaps [Eutelsat] has now finally found the right formula,” he suggested.

That formula is helped by buying Bigblu Broadband (for £38 million) which gives Eutelsat a retail outlet for its broadband services. Given that rival Viasat is also planning a retail offering, Thorne says: “An obvious benefit to this deal is that Eutelsat has now decidedly stolen Viasat once-upon-a-time ‘White Knight’ [opportunity] for hitting the ground in Europe. Short of a counter-bid we don’t think Viasat can drum up, [the threat] has gone. The building blocks (Konnect launch, Orange deal, DR Congo deal, BBB acquisition) for Eutelsat to prove the market wrong on Fixed Broadband (and indeed, group) growth.”

However, the market response was cool. Its share price rose 0.71 per cent to €8.57. A year ago, Eutelsat was trading at €17.32. Two years ago, each share was worth €19.40. Slashing the shareholder dividend by a third to 89 Euro-cents hasn’t help build confidence. Belmer talks about a “turning point” in the company’s fortunes, and is now promising a return to “a stable to progressive” dividend, but not this year.


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