Market Watch

Deutsche Telekom to Launch Satellite TV Service

February 28, 2011

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Deutsche Telekom is to launch a satellite TV service, Entertain Sat, to complement its existing IPTV platform, Entertain. The satellite service has been developed in co-operation with satellite provider SES Astra and will incorporate Astra's HD+ bouquet of FTA German HD channels alongside the pay TV channels belonging to Deutsche Telekom's Entertain packages.

Entertain Sat will be sold as a triple-play bundle with flat-rate telephony and broadband. Customers will be provided with an HD DVR and will be able to access Deutsche Telekom's on-demand library on the TV set through the broadband connection.

Telcos frustrated with the limitations of line quality and its impact upon the reach of their IPTV services have been increasingly turning to satellite TV to complete their market coverage. Companies such as France Telecom and Portugal Telecom have employed this to good effect, and past analysis from IHS Screen Digest indicates that satellite TV availability boosts overall TV uptake without compromising IPTV additions. One critical reason for this is that, with near-complete population coverage, telcos are able to market their services far more aggressively, via national as well as local media.

For Deutsche Telekom, however, the move provides an indication that the company has been dissatisfied with the ability of its IPTV platform to drive net additions to the high-speed VDSL broadband connections which are required for customers to use the HD component of the IPTV service. The provisioning of satellite TV alongside lower-speed DSL connections reflects a recognition that the telco may instead need to bolster its defences against the cable companies, which are finally becoming competitive in the converged communications space, and alternative telcos like Vodafone, which has ambitious plans for its hybrid IP-satellite TV service.

Nonetheless, the launch does leave Deutsche Telekom in a strong position, with a TV service capable of hitting the market's 15m free satellite TV households. Combined with its launch of an initiative with Sky Deutschland to target the wholesale cable market, Deutsche Telekom has the potential to become a formidable entity in the German pay TV market.

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