“In video, the rationalisation of distribution at the Hotbird orbital position has been completed in order to protect the value of this hotspot and stimulate HD and UHD ramp-up,” the company said in its report of the Q1 results of the 2016/17 fiscal year.
Capacity, mostly for free-to-air channels, on the 13 degrees East position is now sold through three main resellers, Globecast, Telespazio and Media Broadcast Satellite. The operator believes this is the best way to accelerate the move to High Definition and Ultra HD from the Hotbird video neighbourhood. At the moment about 5% of FTA channels is in HD, as compared to 20% for pay channels.
As part of the new strategy, Eutelsat also did not renew the contracts with a number of resellers, including MX1 for four transponders.
“On the operational side, I would highlight the rapid execution of the rationalisation of distribution at the Hotbird orbital position,” commented CEO Rodolphe Belmer, at the occasion of the Q1 results of the 2016/17 fiscal year.
“First quarter revenues for Video Applications amounted to €224.3 million, down 1.3% like-for-like. This reflected on one hand additional revenues generated by incremental capacity launched last year (Eutelsat 8 West B in MENA and Eutelsat 36C in Sub-Saharan Africa) and, on the other, lower revenues at the Hotbird position mainly related to the rationalisation of empty capacity in the hands of resellers, as well as lower revenues in professional Video.”
“We are focused on optimising the revenue potential of our existing assets and maximising discretionary free-cash-flow generation, and we are working on additional measures to this end, notably operating cost savings, with the objective of reducing leverage, investing selectively in future growth opportunities and delivering an attractive shareholder remuneration.”
In a related devlopment, Belgium Satellite Services, a reseller of Hotbird capacity, has apparently filed for bankruptcy, according to Belgian court documents.