Eutelsat/Viasat combine forces and MPs say BBC governance needs to change : DTG Daily News 12th February 2016

Eutelsat/Viasat combine forces

Satellite operators Eutelsat and ViaSat have announced that they’re joining forces. Their new strategic partnership aims to promote and develop satellite broadband across Europe.

Industry experts are predicting the possibility of the merger between the two.

ViaSat is planning a next-generation satellite, the ViaSat 3, which they estimate will be able to deliver more than 100 Mb/s, matching the top speeds on terrestrial cable suppliers. In addition, to this, the new satellite will have more capacity than every commercial satellite in orbit combined: 1Tb/s.

Two new businesses will create, one focusing on commercial wholesale while the other will focus on retail services.

“The Wholesale entity will see Eutelsat transfer its existing European broadband business into a new vehicle at book cost in exchange for a 51% stake. The assets being transferred include the giant Ka-Sat spacecraft, the ground segment, customers, distribution agreements and orbital / landing rights,” said Giles Thorne, an equity analyst at investment bank Jefferies. “WholesaleCo will, for now, provide the wholesale HTS capacity to existing distributors and the new RetailCo. ViaSat will contribute €132.5m of cash in exchange for a 49% stake.”

“RetailCo will build a DTH consumer ISP business in Europe. ViaSat will own 51% of the equity, Eutelsat the remaining 49%. It’s unclear how RetailCo will be capitalised. While much of Eutelsat and ViaSat’s product approach to consumer broadband is similar, ViaSat has executed a full retail model with a brand (Exide), customer service, direct marketing and content partnerships (ViaSat has had a product link-up with DirecTV since 2012). Much of that approach will now be replicated in Europe via RetailCo.”

“It makes sense for Eutelsat to kickstart its flagging retail growth in Ka-Sat (an issue we’ve previously raised) through the leveraging of ViaSat’s successes in the US (where it has 687k subs, compared to Eutelsat’s 190k). The rational for diluting its economics in Ka-Sat and its highly valuable orbital / landing rights, however, is not immediately clear – the RetailCo has strong logic but could quite easily have existed under the status quo – we can only assume there is an undisclosed quid pro quo around Eutelsat getting access to ViaSat-3 – our base case would be that Eutelsat participates in the financing of ViaSat-3ii, the ViaSat-3 class satellite due to be launched over MENA in early 2020. It feels almost certain now there won’t be a like-for-like replacement for Ka-Sat.”

One result of the merger means Eutelsat now controls a de facto monopoly for satellite broadband infrastructure over Europe.

The Eutelsat/ViaSat broadband deal should close this year.

MPs say BBC governance needs to change

The BBC is an “extraordinary national and global institution” that has a “vast amount to contribute to an international standard of excellence in public service broadcasting”. It then went on to say that the broadcaster needs a radical overhaul in its governance.

The report also said that the Director General is effectively accountable to no one yet lacks the support to drive change throughout the organisation.

The Committee involved in producing the report. Suggests that improving the BBCs accountability and transparency will help with continued innovation and development.

Some of the key findings and recommendations from the report:

  • The BBC Trust has lost confidence and credibility and should be abolished. However, the problem that the Trust was intended to solve remains
  • The BBC’s Board needs to be reformed as a unitary board and strengthened, with the addition of an independent Chair
  • It awaits the results of the Clementi review, but in its judgement wider accountability should be the task of a separate section of Ofcom
  • A new complaints procedure would see all complaints handled initially by the BBC itself, with both industry and editorial issues subsequently escalated to Ofcom
  • The redefined BBC Board should re-examine the business case for BBC Worldwide and, if it decides to retain the wholly-owned subsidiary model, it should be subjected to greater transparency and accountability and kept under kept under review by Ofcom
  • There remain concerns about the BBC Studios proposals on four fronts: State Aid rules, transparency and accountability over pay, the relationship between BBC Studios and BBC Commissioners, and the BBC’s regional presence
  • The lack of transparency around salaries and concerns over levels of pay for executives and talent alike must be addressed

DTG Staff  |  15.02.2016

Previous story  |  Next story