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Digitalisation in Africa

How satellite solutions can complement and

support DTT networks?

Johannesburg – February 2012

Introduction

WHY switching to digital broadcasting?

…End Consumers:

• Better signal quality (HD, robustness).

• Multi-channel offer with EPG convenience.

• Service offering enlargement: multi-play, multi-

screen, video-on-demand (VoD), interactivity.

…Governments:

• Opportunity to reshape broadcasting landscape.

• ‘Digital Dividend’: monetisation and re-allocation

of spectrum for new services.

• Content control possibilities through encryption.

…Broadcasters:

• Enabling multi-channel, HD, new services.

• Lowering transmission costs per channel.

• Potential for increased advertising revenues

…National Economy:

• Services: content production, digital network

and teleport operations

• Manufacturing: new technology, skills.

• Retail chains: equipment ales and installation

2

Through the advances in digital compression and transmission techniques, digital broadcasting has a

positive impact on many stakeholders, going beyond the broadcast industry.

Benefits for…

Introduction

WHY considering satellite?

Digital TV Market evolution 2006-2010: Satellite is kick-started digital TV.

3

Especially in the early phases, satellite drove the digital transition before other

infrastructures followed. In the long term, it even extended its leading role.

*Algeria, Morocco, Tunisia, Greece not updated at YE10, therefore based on YE08/09

Source: SES ASTRA, Satellite Monitor

0

20

40

60

80

100

120

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llit

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IPT

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In M

ill.

TV

Ho

useh

old

s

digital analogue only

YE06 YE07 YE09 YE10*YE08

x x x x x

Terrestrial (analog and

digital) reach decreased

Satellite reach

increased

x x x

x x

Digital Satellite is:

-Quick

-Cost effective

-Available everywhere

-High quality

3

Implementation Roadmap WHEN: Steps to migrate from analogue to digital

Some European examples of analogue

switch-off after the start of the DTT roll-

out:

• UK: 1998…2008-2012

• France: 2005-2011

• Germany 2002-2008

4

Analog can only be switched-off

once digital has a high reach.

Technical coverage is not enough.

Time

Deployment of infrastructure

Y2 Y7

WHO: Stakeholder Role – Media Landscape

(1) WHAT: Content choice

Y0

HOW: (2) Infrastructure Choice

(3) Business Model, Content Control

Technology Considerations

(4) Regulatory Environment

Financing

Migration Phase

Switch off

Dual illumination

Preparation – Decision Phase

Typically 4..7 years

Implementation Roadmap Case Study

(1) WHAT: Content Choice

5

*: Limited Coverage or under implementation

Not only does satellite have the largest selection of SD and HD channels,

covering 100% of the population, but is also supports all business models.

Furthermore, satellite signals are available everywhere to feed all other

distribution channels, especially cable, DTT and IPTV networks.

Country Infrastructure Nb ch.

Pu

bli

c

Pri

va

te

SD

HD

Population

coverage

End

consumer

utilisation

DTT 15..40 * * 75%..90% 5%

Satellite >100 100% 36.3%

DTT 19 * <95% 41.5%

Satellite >100 100% 21.4%

DTT 15..50 * 90..98.5% 31.%

Satellite >250 100% 43.2%

Decisions to be taken (2) HOW: Infrastructure Cost Effectiveness

What percentage of the population needs to be

covered by DTT – Financial Metrics:

• Investment for DTT.

Typ. > 100 MEUR for 20..50 SD channels

• Costs per SD channel per year.

DTT: 2-10 MEUR, DTH: 0.1-0.3 MEUR

• Costs per channel and household per year.

Depends on reach per infrastructure

DTT deployment level of economic usefulness,

the last 30% can cost as much as the 70 first%.

Satellite can cover the entire population,

enabling a high digital reach rapidly.

Achievable cost savings depend on:

• Targeted DTT territory and population coverage

• Country topography

• Terrestrial ‘tower heritage’

6

Infastructure Investment costs Satellite vs DTT

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Technical Coverage

Inv

es

tme

nt

Satellite

DTT

ILLUSTRATIVE

ONLY

Compared transmission costs/take-up – Example Poland

(in EUR)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Co

st/

ch

an

nel/

HH

/Year

15% 50% 25% 75% 90%

Satellite

DTT

Technical Coverage Source: iDate

100 MEUR?

200 MEUR?

7

Decisions to be taken (3) HOW: Business Model

1. FTA platform, non-encrypted: variety of public and private FTA channels.

2. Encrypted FTA Platform: distribution limited to specific country, no subscriber fee

3. Pay TV Platform: premium content encrypted, different subscription packages

4. Hybrid platform: combining encrypted FTA channels with a pay offering.

Business Model Options – What is the preferred approach?

Conditional access technology enables the signal control for both: FTA and pay TV services.

• National content rights to be respected – avoid overspill to neighboring countries.

• Controlled environment and improved installation support

• HD may require additional funding.

Control of Digital Signal and Channel Access

Different broadcast infrastructures can adopt one or more business

models. Pluralism and the ability for end consumers to choose are key.

Decisions to be taken

(4) HOW: Regulatory Considerations

Key public objectives: manage different stakeholder interests

• Consumers: better and new services, choice between offers.

• Broadcasters: lower costs, more revenues.

• Government: cost efficiency, reaching 100% of the population

• Network operators: fair competition & pluralism.

1. Technology Neutrality: no discrimination between platforms

2. Open access to networks favoring competition between players

3. Media pluralism, e.g. based on national must-carry rules

4. Universal service

8

Four key regulatory principles:

Regulators are not only responsible for defining the principles but

also to enforce these!

Satellite:

The digital infrastructure of choice

9

Digital satellite is:

1. Quick to deploy: shortening time of

migration for broadcaster and end-

consumer.

2. Cost effective: less CAPEX for

infrastructure, lower costs per channel.

3. Available everywhere: high quality to

everyone at the same time.

Recommendations for future Migrations:

• Use existing satellite capacity first for digital

broadcasting of all FTA channels.

• Adopt DTT coverage in main cities only.

• Equal subsidies to STB for satellite and DTT.

• The market to decide: which is the best

infrastructure for broadcasters and consumers!

Driving Digitalization

Space solutions – The SES Fleet

TV and radio channels

worldwide

6200 We deliver

* Including all local HD channels broadcast via Ciel-2‘s spot beams

homes around the globe

245m

We reach over

Satellite fleet of today with projection over 2014

Satellites launches till 2014

• 10 satellites under construction between 2011 and 2014

• 4 for Africa between Q4 2011 and Q1 2014.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011 2012 2013 2014

ASTRA 2G ASTRA 5B

ASTRA 2E

SES-8

SES-6

ASTRA 2F

SES-4

QuetzSat-1

SES-2

SES-3 Yahsat 1A

Fleet configuration is based on current planning and is subject to change

New satellite

Capacity

as of 2010

ASTRA 1N

SES-5

Overview of orbital positions in Africa

4 orbital positions 3.5m TV homes 250 channels

338° East 28.2° East 5° East 57° East

French West & Central Africa English West Africa South Africa and Sub Saharan

Africa

East Africa

1 satellite 1 satellite

2 satellites 1 satellite

12 transponders 12 transponders 30 transponders 5 transponders

80 +* TV and radio channels 30+* TV and radio channels 80+ TV and radio channels 80 TV and radio channels

free TV channels 20+ free TV channels Nearly 40 free TV channels free TV channels

future HD channels Soon HD channels Soon HD channels

Notes

• channel figures as of July 2011; *incl. interactive services

ASTRA-4A Ku-band coverage

NSS-12 Ku-band coverage

NSS-12 C-band coverage

SES-5 Ku-band coverage (Q4/2011)

SES-5 C-band coverage (Q4/2011)

African Coverage

Potential satellite options

NSS-12 at 57°E ASTRA 4A at 5°E SES-5 at 5°E

16

YahLive footprint

Driving Digitalization

Ground Segment – Media Solutions

The SES Marketing Approach

18

Content

aquisition

Postproduction Content

aggregation

and scheduling

(ad sales)

Scheduling

System &

Playout

Broadcast

(Linear TV)

Content Logistics

Internet

(Linear TV,

VOD, HbbTV)

Audience

Business

model

Content Management

Playout Encryption Broadcast

Internet

Production

Subscriber

Management

Assets Business process

SES’ Offering along the Value Chain

Target

18

SES’ offering spans across the Value Chain and aim at supporting the digital transition in a neutral manner,

in partnership with interested third parties.

Technical Platform

Distributio

n

SES’ innovation: hybrid DTT/DTH

Innovative concept: DTH transmission made compatible with all DTT networks

topologies (i.e. as well with SFN architectures)

Proposed solution allows both DTH reception via standard STB’s and DTT distribution

whatever the network topology

Specific equipment to be installed at up-link site and DTT towers

Allows for content protection via encryption

Thanks to an exclusive technology, SES can offer you to feed and complement

DTT network in the most efficient way. 19

Adopting a consumer-centric approach

20

Digital TV system shall foresee the evolution from SD to HD and 3D channels

Modern technology allows for many new services: multi-screen, VOD, catch-up TV…

Technology evolves as a faster pace than ever. Designing a broadcasting system

cannot be done without carefully considering end-user experience and the

required equipment to render services today and… tomorrow!

I want

affordable

equipment

I would like to

be able to

benefit from

new services

when available

My equipment

should be easy to

install and

configure

I want my

equipment to be

easily and

quickly available

How SES can help:

Customer support

Enabling the virtuous circle of DTH:

Ongoing communication and CRM

strategy to distribution partners

In addition, an incentive program has

been introduced to guarantee quality

installations

SES has initiated an installer training

program called “elevate” to support the

distribution strategies of our customers

• The main objective of the initiative

is to train and grow the installer

universe to optimize the customer

experience.

• More than 1000 installers have

been trained and accredited in

Kenya, Uganda and Tanzania

already.

21

Content

Neighbourhood

Content

Neighbourhood

Reach(homes connected)

Reach(homes connected)

Win anchor customer (s)

Grow relevant, unique

content neighbourhood

Win anchor customer (s)

Grow relevant, unique

content neighbourhood

Create Massmarkets

Drive Multiplier-Marketing

Create Massmarkets

Drive Multiplier-Marketing

22

Thank You!

Key Learnings

European DTT Study 1: UK

Media Landscape Very strong Pay TV (Sky) via satellite

High DTT reach for Public (BBC, iTV)

and Private FTA (Channel 4,5, …)

Content 15 channels to max. 98.5% of population

40 channels to max 90 % of population

FreeSat complementing FreeView

Infrastructure Up to 98.5% population coverage by DTT (reach: 31.5%)

Content Control DTT: Mostly FTA, Satellite: PayTV and FTA

Technology DTT: Mostly SD, HD started, Satellite: largest HD offer (payTV)

Regulatory Tech. neutral: yes

Open access: BBC, Arqiva

Must-carry: arrangements between Sky and BBC/ITV

Universal service: for main 5 public channels – NOT for free

Financing Infrastructure: financed by network operators charging broadcasters

STB: switch-over help scheme, very limited.

Digital Dividend: not auctioned yet

23

In UK, satellite reach was rapidly growing and still covers most of the population

with FTA and PayTV. The Freesat package should have started much earlier.

Key Learnings

European DTT Study 2: Germany

Satellite has been the first digital broadcast infrastructure in Germany, the DTT

coverage – and the related costs - could have been reduced through satellite.

24

Media Landscape Strong FTA market (ARD, ZDF, RTL, Pro7, …) on satellite & cable

PayTV offer via Sky Germany

Content 15 channels to max. 90% of population

>40 channels to max 50% of population

[all national and regional terrestrial channels are on satellite]

Infrastructure Up to 95% population coverage by DTT (reach: 5.1%)

Content Control DTT: Mostly FTA, (Satellite: PayTV, FTA, encrypted FTA)

Technology DTT: SD, HD in test phase, (Satellite: SD and HD offer (HD+))

Regulatory Tech. neutral: yes

Open access: Media Broadcast, public broadcaster ows part of DTT

Must-carry, universal service: for public channels (national, regional)

Financing Infrastructure financed by broadcasters using DTT

STB: none

Digital Dividend: >4000 MEUR revenues (incl. spectrum in 1.8, 2.0, and 2.6 GHz bands)