SES Investor Day SES AMERICOM Rob Kisilywicz

Transcription

1 SES Investor Day SES AMERICOM Rob Kisilywicz 3 & 4 June 2008

2 Contents Facts and Figures SES AMERICOM Business Overview Satellite Infrastructure Developments Media Markets Overview Cable and Broadcast IP-PRIME DTH Outsourcing Markets Fixed and Mobile Broadband Enterprise & Consumer VSAT Government Summary 2

3 SES AMERICOM - facts and figures 3 The leading Satellite Operator in North America Strategic orbital locations provide multiple service platforms to Cable, DTH, Commercial & Government users C, Ku & Ka-Band coverage of 50 states in the U.S., Canada, Mexico, Caribbean & Central America AMERICOM operates via three infrastructure and two service units Infrastructure SES Americom Ciel (70% economic interest) QuetzSat (Split economic / voting interest) Service Americom Government Services (AGS) IP-PRIME Customers Significant customers across multiple sectors All leading broadcasters represented Media, Broadcast, Distributors Enterprise, Government, Consumer Broadband

4 SES AMERICOM - facts and figures 2007 Financials Revenue: 542 MUSD EBITDA: 357 MUSD EOY 2007 Backlog 2 : 2.2 Bn USD fully protected, 2.8 Bn USD gross SES AMERICOM Utilization at 77% 1 % of Revenue SES AMERICOM Market Segments Media & Entertainment Enterprise & Consumer VSAT DTH Satellite Outsourcing Americom Government Services DTH Satellite Outsourcing 25% Government Services 20% Media & Entertainment 31% Enterprise & Consumer VSAT 24% SES AMERICOM Fleet 14 spacecraft operating in 12 orbital slots between 72 and 139 W Spacecraft under construction: AMC-21, AMC-1R, AMC-5R, Ciel-2* 1 - As of March 31, 2008 * - SES AMERICOM holds 70% economic interest in Ciel 4 2 As of December 31, 2007

5 SES AMERICOM Satellite Fleet Summary SES AMERICOM Satellite Fleet 139 W AMC W AMC W AMC W 129 W 125 W Ciel-2* AMC-21 AMC-11 Existing Fleet 105 W 103 W AMC-15 AMC-1 AMC-18 AMC-1R Satellite Under Construction 101 W 87 W AMC-4 AMC-3 AMC-2 Inclined Orbit Satellite 85 W AMC W AMC-9 79 W AMC-5 AMC-5R AMC-C4 C-3 72 W AMC-6 Radio Neighborhood HD-PRIME Cable Neighborhood SES AMERICOM Neighborhoods DTH Outsourced Services Enterprise, Government & Media Broadcast IP-PRIME * Legend 101 C-Band 103 Ku-Band FSS Ku-Band BSS Ka-Band * - SES AMERICOM holds 70% economic interest in Ciel

6 SES AMERICOM Fleet Developments Upcoming Launches AMC-21 CIEL-2* AMC-1R AMC-5R Ku Band 125º W Q New Txprs Ku BSS 129º W Q New Txprs, 53 Spot beams Ku / C Band 103 W Q Repl Txprs Ku / C Band 79 W Q Repl Txprs, 32 New Txprs AMC-14 Launch Failure Fully Resolved 1 No viable commercial options to recover from March 15 launch failure Insurers have accepted SES's total loss claim for net book value SES supported insurers in obtaining salvage by selling AMC-14 to a U.S. Government agency Fleet Replacement Strategy AMERICOM initiated progressive fleet replacement plan incorporating a standardized hybrid payload design; first launch 2009 (AMC-1R) Favorable economics of bulk buy, coupled with advances in satellite design, allow for reduction in total mission costs 6 * SES AMERICOM holds 70% economic interest in Ciel

7 Strategic Synopsis Industry Growth Drivers HDTV Rapid Adoption Rate New IP Video Distribution Platforms Fixed & Mobile Broadband Adoption Growth via access to prime spectrum Diversified approach to serving multiple markets & applications Progressive improvement in infrastructure EBITDA margins Bulk procurement to minimize new and replacement capex Consumer, Enterprise, Government SES AMERICOM STRATEGY Focus on services that drive highvalue pull-through Platform provider for next generation IP video distribution Partnering on new mobile broadband platforms Maintain standards of fleet reliability 7

8 Business Segment Growth Strategies MEDIA and DATA SERVICES DTH OUTSOURCING HD demand growth drives increased utilization of HD-PRIME neighborhoods Identify opportunities for satellite capacity via new service and platform development Selectively develop additional neighborhoods Continue development of prime DTH spectrum in North and South America Affiliates, Ciel (Canada) and QuetzSat (Mexico), substantially strengthen SES's position as leading satellite services provider to DTH platform operators IP-PRIME GOVERNMENT Scalable, secure, end-to-end, modular, open platform architecture Initial focus on turnkey solutions to telco and cable operators IP architecture enables service expansion to IP enabled devices Maintain strong position as a provider of satellite capacity to the U.S. Government Grow solutions business and platform development to create additional satellite pull-through 8

9 Media Markets Overview 9

10 U.S. HDTV Market Trends Total number of U.S. National HDTV Channels (1) Total number of HDTV Channels by platform operator E 2008 E 2009 E 2010 E 2011 E DirecTV Cablevision Verizon Fios Dish Network Time Warner Cable U.S. Market Trends HD drives growth in DTH Outsourcing, Cable Neighborhoods and IP-PRIME business Approximately 100 HD channels available by Year End million HD subscribers by 2012(2) DirecTV, EchoStar continue to lead in HD channel capacity, pushing cable and Telco operators to follow in order to remain competitive 10 Source: Morgan Stanley US Cable, Satellite, Telecom 2008 Outlook, March 27, 2008 (1) - Does NOT include Regional Sport Networks (2) - SNL Financial, March 24, 2008

11 11 HDTV in U.S. - SES AMERICOM Market Positioning Competitive Pressure driving HD proliferation Telco IPTV IP architecture supports HDTV growth Cable Cable moving to switched digital video or IP architecture to support HDTV growth FiOS 18 million homes passed by 2010 Targeting 200 HDTV channels EchoStar Local and National HDTV expansion strategy DirecTV HDTV is strong competitive differentiator - especially local HDTV offering Driving Growth Across Three Segments of SES AMERICOM SES AMERICOM HDTV MARKET POSITION ACROSS PAY TV PLATFORMS Cable Neighborhoods HD-PRIME: Established cable neighborhood CMC deal enables significant expansion on AMC-18 and across HD- PRIME neighborhood Cable Operators: Increased competition from DBS and Telcos will require transmission of more HDTV programming to keep pace 37 HD channels currently delivered IP-PRIME IP-PRIME : Highly efficient and scalable MPEG-4/IP platform friendly to Telco's limited last mile networks Readily leverageable by cable operators 45 HD Channels currently delivered DTH Outsourcing Strategic Satellite Services: Core to EchoStar s strategy to support local and national HDTV expansion BSS to Support HDTV Growth: 129 W BSS - Ciel-2 77 W BSS -QuetzSat-1

12 Media Markets Cable & Broadcast 12

13 What SES AMERICOM Sells SES AMERICOM provides satellite transponder capacity for media broadcasting and data networks in North America, Mexico and the Caribbean We have built two successful Media neighborhoods for the broadcasting and cable industries HD-PRIME delivers HDTV and SDTV from programmers to cable headends Occasional Use Always On Network to provide on-demand bandwidth Digital-C and Digital-K Platforms Digital-C provides a neighborhood for programmers to encode and uplink domestic and international content to the SES AMERICOM cable neighborhood Digital-K provides a neighborhood for international content and ethnic programming to be delivered by direct-to-home platform providers in the U.S. 13

14 Media - Who SES AMERICOM Sells to 14

15 Comcast - Anchor Customer on 5 th Satellite in HD-PRIME Cable Neighborhood CMC Opportunity SES AMERICOM Solution Win-Win Results Network consolidation of HITS platform Greater reliability Expand capacity to support HDTV growth Move to C-band in cable neighborhood: Recently launched AMC-18 Increased reliability and flexibility Decreased cost Reduce number of satellites required by CMC from 7 to 3, all within 4 of each other Single dish with triple feed architecture Cements AMC-18 into the HD-PRIME five satellite neighborhood AMC-18 fully leased Joint Marketing Agreement for HITS Quantum Service HD Service on AMC-18 15

16 16 Media Markets IP-PRIME

17 IP-PRIME Overview AMC-9, AMC-3 83ºW & 87ºW AMC- 1 W Operator s UHF Transmitter(s) ATSC/AVSB or DVB-H Mobile Trials Underway Content Providers Secure Content Transport IP-PRIME Vernon Valley Encoding and Content Management Center IP PRIME Management VPN Telco C.O or Cable Headend Telco C.O or Cable Headend ADSL/VDSL or DOCSIS MPEG-4/IP MPEG-4/IP MPEG-2/ASI IP PRIME Transport Solution IP PRIME Managed Solutions 17 IP-PRIME Woodbine Network Management Center Middleware, Local Channels, VoD Servers, Billing System Integration

18 IP-PRIME Options A turn-key, white-label video/audio service for multi-channel video service providers with high quality HD, SD and audio Transmitted via satellite (and optionally fiber) to telcos, cable operators or other operators in MPEG-4 / IP format Transport to Head-End MPEG-4 encoding plus secure satellite/fiber transmission to the headend Compatible with all MPEG-4 STB/middleware solutions Fully Managed Solution Transport Solution plus management of the STB, middleware and conditional access components Optional billing system integration and/or subscriber management system Complete turn-key solution reduces cost (CAPEX, OPEX), risk and time to market HD-4 Transport to Head-End 32-channel HD package designed for telcos with existing MPEG-2 video service Allows telcos to meet demand for HD with less CAPEX required than the cost of a single HD encoder Launching HD-4 into cable shortly 18

19 IP-PRIME Programmers 410 Channels under contract 307 video channels 45 HD channels 262 SD channels 103 music channels (MTV Urge and Music Choice) 19

20 IP-PRIME - Today Platform Features Two STB, Middleware and CAS options all supporting full SD and HD channel lineup DVR and VoD in Q Cable operator service to be available Q HD expansion underway capability to encode 80 HD channels and pass-through 40 more by EOY 2008 Advertisement insertion capability in development Current Status Service is live to subscribers and operating efficiently through the managed, transport and HD-4 configurations Over 30 telcos under contract Further launches planned for Q2 and Q More than 50 telcos in the pipeline for Transport, Fully Managed and HD-4 solutions Las Vegas Mobile Trial delivering IP-PRIME to 300 cell phones successfully completed; open Mobile Video Coalition trial to begin Q

21 IP-PRIME - Today Partners Partnership IP-PRIME sells to the operator in partnership with others that perform best in class roles in the value chain as necessary Programming distribution rights Headend, billing system and network integration Set Top Box integration A Complete Video Service for Today On The Platform That Delivers The IP Content Services Of Tomorrow 21

22 IP-PRIME - Tomorrow Traditional distribution Continue transport to telcos Developing transport solutions for cable Non-traditional distribution Continued development of TV to PCs ( PCTV ) Commercial deployment of mobile service Exploring distribution to other IP enabled devices and platforms IPTV - enabled features Interactive applications Casual and multi-player games Transactional and other services Revenue opportunity of 50 to 100 MUSD over next 5 years IPTV evolving as core to media distribution business Maintain and expand utilization of C-band capacity across fleet in both short-and long-term 22

23 Media Markets DTH Outsourcing Market 23

24 DTH outsourcing Existing Satellites AMC-15 and AMC-16: Ku/Ka FSS hybrid satellites under long-term service contracts Satellites under construction Ciel-2: Ku BSS satellite, under construction and on schedule for a Q launch EchoStar agreed to long-term contract for international capacity of Ciel-2 Ciel capacity 100% contracted at launch DTH HDTV National and Local in U.S. 24

25 DTH outsourcing Satellites under negotiation QuetzSat-1: Ku BSS satellite in development for operation at 77 W orbital position SES expects to complete its negotiations with potential client(s) and commence construction by mid-year 2008 QuetzSat has entered an agreement with EchoStar for the interim operation of EchoStar-IV at the 77 W orbital position DTH HDTV National and Local in U.S., DTH expansion in Mexico and Central America 25

26 U.S. DBS Landscape North American DBS Orbital Arc 148 o 129 o 119 o 110 o Spectrum: Ku FSS Ku BSS Ka FSS 101 o 91 o 82 o 72.5 o 61.5 o DIRECTV DTV-7S DTV-1 DTV-1R DTV-4S DTV-8 DTV-9S GLXY-3C DTV-5 SPWY-1 & 2 DTV-10 ECHOSTAR ECHO-I ECHO-II ECHO-V CIEL-2* ECHO-VI ECHO-VII ANIK-F3 ECHO-IX ECHO-VIII ECHO-X AMC-15 AMC-16 ECHO-IV QS-1* ECHO-III ECHO-XII SES AMERICOM SES Canadian Affiliate Provides Direct-to-Home Video; Satellite under Construction Wholesale DBS Service Provides Direct-to-Home Video & Conventional Satellite Capacity SES Mexican Affiliate Provides Direct-to-Home Video; Satellite in Development * Satellites are in development or under construction 26

27 DTH outsourcing - Further Growth Opportunities SES continues to discuss developing dedicated wholesale satellite solutions for leading DTH video and/or broadband internet service providers Ciel has been provisionally awarded licenses at seven orbital positions out of the nine applications that Ciel submitted Spectrum can be used for DTH capacity expansion, video or broadband services Latin America SES holds prime spectrum rights and is in ongoing discussions to develop dedicated wholesale satellite solutions 27

28 28 Fixed & Mobile Broadband Enterprise & Consumer VSAT

29 Outlook for Enterprise Market SES AMERICOM Network Effort Creating Strong Following Successful branding campaign to attract reseller demand for Ku-Band Ku-Band capacity nearly fully leased New market segments growing for use of Ku-Band In-flight and mobile broadband IP broadband platforms via satellite Impact of Ka-band minimal so far Renewed and expanded Ku-band relationships with major resellers No signs of existing business moving to Ka-band Future looks bright - AMC-21 expected in Q Carrying 24 Ku-band transponders Strong pre-sale activity, 7 transponders already committed 29

30 Enterprise and Consumer VSAT Customers VSAT Network Operators Hughes Network Systems Spacenet AT&T Tachyon Transportation/Distribution Qualcomm Federal Express Boeing Service Company (BSC) Ford Specialized Applications SUNY GE Medical Systems Oil & Gas Schlumberger BroadPoint (PetroComm) Stratos Resellers Microspace Diversified Media 30

31 Mobility is New Source of Ku-Band Demand Bandwidth For Mobile Platforms MOBILE DATA AERONAUTICAL MARITIME LAND OmniTRACS 31

32 32 Fixed and Mobile Broadband Government

33 AMERICOM Government Services What We Do 33 Custom Network Solutions Design, build and operate satellite networks for the U.S. Government Why Solutions? Three Lines of Business Strategic Satellite Solutions Hosted payloads and dedicated capacity for the U.S. Government Transponder Solutions Capacity from across the SES fleet U.S. Government market is requirements driven - they always start with the problem and expect to buy a Solution Solutions usually combine bandwidth with other elements of a network, such as teleport services and terrestrial links and often involve multiple satellites Solutions often require architecture design, terminal and network equipment delivery and installation

34 U.S. Government Market Drivers Communications on the Move (COTM) Key for Army and Marine operations in SW Asia and Africa. Continued expansion of bandwidth per terminal. U.S. Special Operations Command deployments continue to grow (many within the continental U.S.). Unmanned Aerial Vehicle (UAV) Total number of UAV missions set to triple between 2008 and Bandwidth per mission grows. UAV COMSATCOM demand continues to grow in the U.S., Latin America, Africa and Asia. 34

35 AMERICOM Government Services Customers Direct Government Market Customer Industry Base Partners / Customers 35

36 U.S. DoD Commercial SATCOM Need Continues to Grow Gbps U.S. DoD Total SATCOM Demand DoD demand increases from 2008 to 2016 at 7% CAGR Demand increases at 11 % CAGR if expected military satellites under development are delayed MILSATCOM COMSATCOM Needed to meet U.S. DoD Demand DoD demand growth is driven by the need for mobility and flexibility Futron Analysis of DoD Satellite Communications Supply and Demand, 22 April 2008 Double digit demand growth will support AGS revenue growth in the foreseeable future 36

37 SES AMERICOM - Summary Satellite market leader in North America Demand for HDTV drives growth for SES AMERICOM in all media segments IP-PRIME to provide solutions for cable as well as telcos Strategic orbital locations provide multiple service platforms to Cable, DTH, Commercial & Government users Development of spectrum rights for geographic expansion and HD demand Efficient fleet procurement provides capital expenditure optimization U.S. government is one of the fastest growing markets for commercial satellite services 37