Luxembourg’s SES Looks to Muscle into US Satellite Market

25 April 2002

Luxembourg-headquartered satellite operator SES Global is expected today (Thursday) to unveil plans to enter the US satellite-TV market.

SES intends to transfer its satellite wholesale business model in Europe, where it serves 87 million homes, to the states, creating an open platform for media groups to beam programming into American households. As in Europe, the content providers would be relied upon to do most of the marketing for their broadcasts.

Such a model has not been tried before stateside, where satellite operators Hughes Electronics and EchoStar Communications package and market their own platforms, DirecTV and Dish Network (respectively), direct to consumers.

SES may face problems luring content providers away from the existing US operators, but argues that it can offer a more varied selection of programming and pricing, allowing media groups to target consumers and tailor services. Some channels and packages would be free to receive and funded by ads; others would require pay-per-view subscriptions.

The group’s SES Americom division is assigning an initial $250m (£172m; €279.6m) to launch the satellite for the American market. This will fill an orbital slot licensed by the government of Gibraltar and situated between the satellites of Hughes and EchoStar – in fact, closer to these two competitors than US regulators normally permit in case of signal interference, though SES insists it can show there will be no such disruption.

The timing of the announcement is perfect. Hughes and EchoStar want to merge, with the Federal Communications Commission currently reviewing the deal. One of the chief objections to the tie-up is that it will remove competition in the satellite market. Neither company, therefore, is likely to complain too loudly about the arrival of a new player.

The SES service – which also includes high-speed internet access, provided by a second satellite already approved by the FCC – could be available from 2004. It would be the first satellite operator licensed overseas to serve US homes.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff