Nilesat and Eutelsat effectively share the 7/8 degrees West orbital positions and have a considerable amount of inter-trading over the MENA market.
Eutelsat CEO Rodolphe Belmer told analysts on Eutelsat’s post-results conference call that it intends to “take back” some of Nilesat’s capacity serving the Arabic-speaking market “to distribute it ourselves.” He explained that the contract with Nilesat comes up for renewal at the beginning of Eutelsat’s next financial year (which starts on July 1st 2021).
“As you know, we decided to acquire back a few years ago our main distributor in the MENA region called Noorsat. And we think it was really for the good of the company [and] integrating the distribution of the broadcast capacity in MENA has enabled us to truly leverage our very strong position in the region with our 7 and 8 West orbital positions. This position is very strong, since we estimate that 90 per cent of the Arabic-speaking population in the world watch free-to-air television on this orbital slot, which gives us a very unique situation to deploy interesting or favorable marketing strategies in the region, notably to exercise a relatively good pricing power. And that’s what we are doing well and that’s the reason why our revenues in the regions are growing so fast,” Belmer added.
Belmer expanded, saying: “Of course, we do compare two options, renew with Nilesat in conditions that would be good enough to convince us not to take back and distribute by ourselves and by our very competent sales force the capacity they have in the hands in the region. And that’s where we are at the moment. Situation undecided yet, but what I can tell you is that anyway we think that the outturn will be relatively good for our company.”