EUTELSAT: The European Telecommunications

Satellite Organisation and the 1992 Market

Andvea Caruso

Director-General, Eutelsat, Paris

In this article, Andrea Caruso makes it clear that EUTELSAT, the European TelecommunicaGons Satellite Organisation, is a working model of a Single European Market in the field of providing and operating communications satellites for public telecommunications in all EEC and some non-EEC Member States. EUTELSAT is transnational and based on co-operation and exchange.

This regional telecommunications system achieves considerable economies of scale compared with any national one, as well-as technological and commercial benefits like VSAT (Very Small Aperture Terminal) services for the business user, and the ability of in-orbit satellites to be very flexible in terms of ground coverage zones on the Continent.

‘1992’ requires greater inter-country communication and the EUTELSAT network is already in place in Europe to supply it.

1988 stands out as the first year that Europe started to take seriously the implications and the imminence of the Single Internal Market planned for 1992. However, some organizations in Europe are already working according to the principles of the frontier free market. One of these is EUTELSAT, the European Telecommunications Satellite Organization which operates telecommunications satellites for Europe’s communications infrastructure.

EUTELSAT is an international organization operating under an intergovernmental Convention to which all European states can accede. The provisional organiz- ation was created in 1977 by 17 PTTs in Europe. This was replaced by the definitive EUTELSAT, number- ing 26 countries, in 1985. Its mission is to provide and operate communications satellites for its members for public telecommunications in Europe.

There are two principal reasons why EUTELSAT is already an extremely instructive example of the 1992 market. Firstly, it groups together 26 countries, all members of CEPT (the European Conference of Postal and Telecommunications Administrations) with the common aim of operating and maintaining a system of satellites for domestic and intra-European

links. These countries include the 12 EEC members plus 14 non-EEC states. Secondly, the fact that satel- lites do not recognise frontiers has forced EUTEL- SAT members to adapt to a trans-frontier product. As a result, well prior to 1992 EUTELSAT’s members have first-hand experience of the working reality of the open European market.

Although EUTELSAT is run according to normal commercial principles, the decision to establish a regional telecommunications satellite system had both political and industrial elements. Europe could not afford to lag behind as a mere observer of the com- munications innovations taking place in other regions of the world, notably North America. INTELSAT, the global satellite system, assures highly reliable inter-continental links but it was seen that Europe needed its own intra-continental communications infrastructure. Terrestrial networks, whether coaxial, fibre-optic or microwave, require considerable inte- gration and planning. Hence the overall aim was most quickly and easily achieved via a satellite system.

Industrially, European governments had invested huge amounts of capital in developing European

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EUTELSAT signatories and with a waiting-list of transponders testifies to the demands of the market in the communications field. It also indicates that the demands were not in all respects anticipated. Ten years ago it was thought that EUTELSAT’s role would be to link about 20 stations across Europe equipped with costly and large antennas of the order of 14-18 metres, essentially to provide an alternative and complementary transmission medium for public switched telephony. However, since the first satel- lite, EUTELSAT I-Fl, went into service in 1983 a number of technological and commercial trends have developed:

l a tendency towards small, inexpensive domestic earth stations which means that reception at the centre of the beams of today’s satellites can be achieved with parabolic antennas less than one metre in diameter.

l the distribution of a far greater than anticipated number of television programmes to cable networks and individual TVRO installations throughout Europe.

l the interest displayed by business entities in more highly-developed business communications ser- vices for their own use.

industry to enable it to enter the satellite market. This could not be left to the monopoly of the indu,itrial interests of any one single country so a European industrial cooperation had to be de- veloped. The benefits of this are already being felt for 1:uropean aerospace. EUTELSAT is the largest client for Ariam, the European satellite launcher. In addition, EUTELSAT’s existence has enabled com- panic!s like British Aerospace, Marconi and Logica in the I;K, Matra and Aerospatiale in France and MBB in Germany, to name but a few, to win contracts whose development has subsequently put them in the position to compete for commercial contracts outsIde Europe.

A mJlor economical and political advantage of a multi-national venture on the scale of EUTELSAT is thalt significant economies of scale are achieved by pro\,iding satellites designed for regional communi- cations needs. Countries for which it would not make commercial sense to maintain a national satellite systt>m have access to satellite channels for their dornt>htic and/or intra-European communications.

The satellites EUTELSAT currently provides for Europe were constructed as part of a communi- cations programme embarked on by the European Space Agency in 1975. ESA commissioned and finalIced the construction, launch and maintenance in orbit of the ECS (European Communications Satellite) programme, known as EUTELSAT I when passilci over to EUTELSAT for commercial operations.

Tad,!),, EUTELSAT has four satellites in orbit. The first, EUTELSAT I-Fl, was launched in 1983 and is expected to remain operational until 1990. The secovld, F2, was launched in 1984. A third was lost on an Arinrw launch failure in 1985. The fourth went into operation last year. F5, the most recent and the final unit of the series developed by ESA for EUTELSAT, was launched successfully by Arime on July 31 this year. Each satellite is equipped with a Eurc’beam which atends over the whole of the continent and three, more powerful Spot Beams: West, East and Atlantic. In addition, F2, F4 and F5 havt a Satellite Multiservice System (SMS) beam for busi less communcations. (See Table 1)

Te&nically, the EUTELSAT I satellites were designed to carry a number of different forms of traffic according to market demands. These include tele- phonv services (telephone lines, telex, fax, low and medium-speed data), television transmissions for the European Broadcasting Umon, occasional tele- visicn usage, and full-time leases for private and public television and radio broadcasters.

The fact that all available capacity is fully booked by

As a result, the scope of satellite telecommunications has enlarged considerably, leading to significant developments in satellite design and missions. This has in turn created a substantial and growing market for suppliers of telecommunications services and manufacturers of earth stations. 75 per cent of EUTELSAT’s’ revenue today is generated by services aimed at small dishes, namely TV services for cable operators and domestic TVRO owners.

The industrial spin-offs for various sectors here are already proving significant. The availability of EUTELSAT transponders has led to a recognition throughout Europe that there is demand for a greater choice of services. Some broadcasters have already taken advantage of this by extending their terrestrial reach in Europe via satellite. The shortage of terrestrial capacity has led to the creation of a number of new private broadcasters and public service consortia because EUTELSAT satellites have provided the means for them to deliver their programmes into European homes. Another bene- ficiary of this development has been the advertising industry which has perceived the possibility of new outlets via satellite-delivered channels.

A result of the expansion of services has been the dvelopment of professional and domestic satellite reception equipment. Almost 13 million cabled homes in Europe are served by cable operators who have installed satellite receiving equipment at their

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headends. The growth of new cable systems and the upgrading of older ones has accelerated, while the readiness of the public and private sectors to invest has been boosted by the availability of new pro- grammes which in turn encourages the consumer to subscribe to cable.

The potential for the domestic TVRO market will be even more significant. Reception at the centre of the beams of today’s EUTELSAT satellites is now possible with 90cm diameter antennas which are inexpensive, easy to install and increasingly require no planning permission. The EUTELSAT II gener- ation of satellites which will go into service in 1990 is expected to see antennas shrink to 45cm at the centre of their high-gain beams.

While it is impossible to predict the rate of growth of the TVRO market in Europe, it is widely expected to follow the VCR and the compact disc as the next major home entertainment selling point, particularly with the advent of enhanced picture and sound quality afforded by MAC and HDTV.

_ In addition to full-time leases for television aimed at the cable and direct-to-home markets, transponder capacity is also increasingly used for occasional-use TV transmissions. notably this year these have included International Football, the Nelson Mandela concert in Wembley, Le Mans, the French elections and the Papal visit to Austria. These are services of non-regular nature and are often planned at short notice.

As well as the one-off TV user EUTELSAT offers subscription leases for TV for minimum 15 hours a month. Subscription is already used by several TV programmes for news dissemination for both public and specialised natures, business videotransmissions for intercorporate applications and general entertain- ment TV programme exchanges. Users include Visnes, WTN, the USIA, Swedish national broad- caster SVT and PACE; the educational TV project. D-MAC testing has also been conducted according to this arrangement.

More sophisticated ground technology has also opened a potential real demand for VSAT (Very Small Aperture Terminal) point-to-point and point- to-multipoint services for the business user. These include videoconferencing, fast facsimile and com- puter-to-computer data transfer. Today, business services are provided by the EUTELSAT Satellite Multiservice System (SMS) using a special package on board three EUTELSAT I satellites which will also be available on the EUTELSAT II generation. Full- time users of SMS already include AFP, Reuters, BP, Shell, Mars, Texas Instruments and the Wall Street

Journal, among others. Growth of traffic of this sort is expected to be significant in the coming years, particularly as trans-frontier business in Europe increases with the Single Internal Market and as the efects of deregulation alter the telecommunications landscape.

The recent findings of a market study commissioned by EUTELSAT indicated the high level of interest throughout Europe in the potential for VSATs. Nearly 50 per cent of interviewees expressed a positive interest in their use.

The greatest response was shown by companies involved in providing retail services direct to cus- tomers. They are actively seeking to enhance their telecommunications infrastructure, and VSATs offer a possible solution. This applies particularly to companies in the oil business for interactive on-line processing of transactions at petrol .stations, the financial sector for interactive on-line services at bank and insurance company branch offices and the information sector for uni-directional news agency services supplied to newspaper publishers.

The technical and operational advantages of a VSAT network include:

The ability to operate at sites remote from terrestrial data communications services such as the suburbs of large cities. Flexibility of network configuration and traffic capacity. End-to-end digital service management. Single source network supply. The service pro- vider offers a privately managed network over a shared hub. Costs are not related to distance between hub and remote microterminal site. Within the available channel capacity the incre- mental satellite channel cost of adding remote sites to an existing network is zero.

More sophisticated VSATs are also opening up the potential for satellite newsgathering (SNG) where transportable equipment is used for immediate coverage of events. A number of companies are now manufacturing SNG equipment which packs into cases which can travel on regular flights and costs about $150,000. The flexibility of SNG was recently well demonstrated by the European Broadcasting Union’s use of one of its EUTELSAT transponders to cover the Reagan-Gorbachev summit in Moscow this summer. Using a transportable uplink provided by the BBC, the EBU transmitted from Moscow via EUTELSAT and thus bypassed the complications of a landline link.

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Fipc 1 EUTELSAT 1 Coverage Zones

I Satellite at 13”E

Figuv 2 EUTELSAT II “High-gain” Coverage

ANDREA CARUSO

Figure 3 EUTELSAT II “High-gain” Coverage

By 1992 when the Single Internal Market comes into force EUTELSAT will have had nine years of experience in operating satellites and will already be into its second generation of EUTELSAT II medium- power satellites, each with 16 transponders. These will be capable of carrying all types of traffic currently carried on the EUTELSAT I fleet (telephony, EBU, data transmission and TV and radio services) but will provide far more capacity and power. Their design also means the transponders can easily trans- mit all existing and future transmission standards, including PAL, SECAM, and NTSC (with or without additional sound channels), MAC and high-definition television (HDTV) evenif Europe ultimately elects to adopt a wideband HDTV system.

All EUTELSAT II transponders are suitable for the European-developed MAC/packet family of trans- mission standards, the first step in the move towards HDTV. The optimum transmission parameters for MAC will not be known until representative MAC domestic receivers are available for evaluation. The MAC system was originally designed for Direct Broadcast Satellites with a transponder bandwidth of 27MHz so will be easily accommodated with EUTELSAT II’s 36MHz and 72MHz transponders.

Another advantage of the EUTELSAT II system is that

each transponder can be switched while in orbit so as to transmit to either of two distinct coverage zones by ground command. In keeping with EUTELSAT’s mission to serve the entire continent, the medium- gain beam covers the whole of Europe, essentially combining the Spot West, Spot East and Spot Atlantic zones of the EUTELSAT I satellites. This will be of particular interest to users looking for the maximum reach in Europe.

Alternatively, the more powerful high-gain beams can be configured to cover target areas of Europe depending on the demands of the user. Moreover, the high-gain beams can be optimised for the user by tilting the satellite in space to focus on selected areas of the continent. Table 2, for example, shows how a EUTELSAT II satellite high-gain beam can be optimised for the UK, Eire, Spain and countries on the Western seaboard. Table 3 shows how it could, instead, be focussed on Italy, Germany and countries in the eastern part of Europe.

This flexibility will enable EUTELSAT users to target their markets much more precisely. As trans- frontier entertainment services start to aim for very specific linguistic markets (Anglophone, Franco- phone, Germanophone or Nordic for example) the

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overlapping beams. These could be reconfigurable in orbit so that the number of channels assigned to each beam could be varied to suit demand. Channel capacity could be increased by co-locating two, or even three satellites at the same orbital location. Reception on the ground would be possible via very small and inexpensive TVROs. Interest in the project from EUTELSAT’S signatories has been significant and detailed discussions on its possible implemen- tation will be carried out before the end of 1988.

infr,istructure will be in place for them to enter their choc;en markets.

By providing such a high degree of in-orbit flexibility EUI‘ELSAT has ensured that the design of its new system is future-proof. In this way it can respond to changes in the communications environment during the lifetime of the programme, thus ensuring that its satellites provide the right capacity for Europe, not just for the next few years but into the next century.

Beyond EUTELSAT II, EUTELSAT is also considering the feasibility of a pan-European Direct Broadcast Satellite project, known as Europesat, proposed to be III place when the first-generation national DBS satt,llites (TDF, TV-Sat, Tele-X etc) reach the end of the!r life.

Thrn result of the studies carried out so far for Europesat indicate the multiple ways the system could be built in order to meet a number of requirements by using various combinations of a “kit of parts” for the project (antenna coverages, repeater designs, DBS platform capabilities etc).

In principle, total coverage of all EUTELSAT member countries would be provided by a number of

The spirit of 1992 is cooperation and exchange, the same qualities that originally gave rise to a regional satellite system for Europe. Very few countries in Europe can find commercial justification for a national satellite system: installation and maintain- ante costs are prohibitive. Nevertheless, the need for even small national states to have access to satel- lite transponders is demonstrated by the fact that both large and small members of EUTELSAT use the system to intercommunicate. As the need to inter- communicate inevitably gets stronger EUTELSAT, the European Telecommunications Satellite Organiz- ation, can assure Europe it has the appropriate network in place to serve its domestic and inter- national needs.