News

Nordic Canal Digital Ready for Launch

4/12/1998 8:00 PM Eastern

Cannes, France -- Telenor Plus CEO Gunnar Bjorkavaag's
first day at the MIP-TV program market here was less than perfect, as he was accused of
speeding by an overzealous French traffic cop. But in every other regard, he had a broad
smile on his face, as plans for the official launch of one of Europe's newest and
biggest digital-satellite platforms began to firm up.

The platform, known as Canal Digital, is a 50-50 joint
venture between Telenor and Canal Plus. It is, in reality, already up and running, and it
has been transmitting 35 digital channels since October. But the formal launch of the
expanded package, with its full bouquet of new digital services, is due soon.

After some delays because of disputes between Telenor and
Canal Plus, the formal launch of Canal Digital will mark a new era of multichannel
competition in the Nordic region, where satellite-transponder capacity is about to grow
tremendously.

Telenor Satellite Services managing director Knut Reed will
be in Cape Canaveral, Fla., June 9 to see the Thor 3 Nordic satellite launch. Thor 3 will
be colocated at Telenor's 1 degree west position. And his management board is ready
to approve the construction of Thor 4, adding another 30-odd transponders -- and 300
digital channels -- to the marketplace. "We are 97 percent fully booked currently,
and we need new capacity," Reed said.

Canal Digital will use Thor 3 to add many of the new
services that will mark the complete launch of its digital service. "Canal Digital
will have 60 digital channels soon and, later this year, it will add other PPV
[pay-per-view] channels, including huge PPV-soccer choices, and our
'Turbo-Internet' services," Bjorkavaag said.

Canal Digital recently obtained important rights to
virtually all of the key Scandinavian channels. The package includes popular Scandinavian
Broadcasting System-owned Kanal 5, TV Norge and TV Danmark, which were previously
distributed exclusively by Canal Digital's archrival ViaSat, an analog satellite and
cable service.

"We were faced with a choice between Canal Digital and
ViaSat, and we made the ultimate right choice going along with Canal Digital because we
believe that they have the ultimate winning package," said SBS senior vice president
Greger Larsson. He added that ViaSat wanted to push its own TV3 channel as the local
driver, "and we were concerned that our stations might not be treated with the VIP
status that we will enjoy from the Canal Digital package, where we are the main
drivers."

Larsson explained that SBS' relationship with Telenor
goes beyond the Canal Digital package. "We also want to create new digital services,
so we have launched another joint venture with another Telenor company, called SBS
Interactive, exploring all of the possibilities, starting with telephony, Internet,
teletext and those opportunities in digital," he said.

Both SBS and Canal Digital see huge potential in offering
new-media services, but they disagreed on how much of their revenue will come from the
segment. Larsson predicted that "five years from now, between 15 percent and 20
percent of SBS' revenue will come from 'other services.'" Per
Tengblad, managing director of Canal Digital, maintained, "From our five-year
perspective, we will have between 30 percent and 50 percent revenue from services that do
not exist today. It is phenomenal."

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