Orbit, ART Bask in ArabSats Warmth

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Dubai, United Arab Emirates -- A hot spot began to emerge
in the Middle East satellite industry early this month, and it could represent a shift in
the balance of power among the region's pay TV platforms.

Direct-to-home platform Orbit Satellite Television and
Radio agreed to lease six transponders on the ArabSat 3A satellite that was launched last
month.

At the same time, Arab Radio & Television -- another
pay TV platform and Orbit's archrival -- also said it will lease three transponders
on the satellite. And Star Select, which Orbit distributes, will transmit via ArabSat,
too.

The transponder agreements, which bring the bird to full
capacity, dramatically increase the strength of ArabSat and of the three platforms in the
Mideast pay TV industry.

Many viewers can now reposition their dishes, pointing at
the satellite that they wish to receive signals from. And with a big free-to-air
programming lineup, ArabSat is attracting the largest audience.

At the same time, it places further pressure on Showtime, a
Mideast pay TV platform that is part-owned by Viacom Inc. Showtime transmits via the
NileSat bird -- an important satellite, but no match for Arabsat -- and viewers could be
reluctant to redirect their dishes to NileSat because of the temporary signal
interruptions that it would cause.

Showtime executives appeared surprised to hear of
Orbit's agreement with ArabSat, but they declined to comment.

It's unclear how Showtime will counteract Orbit's
new advantage, but to its credit, it has led the region in areas like marketing, churn
reduction and customer support.

ArabSat, which launched Feb. 26, had already begun to build
an audience and a reputation as the region's "hot bird" with a lineup of 30
of the region's most popular free-to-air channels -- something that motivated Orbit,
Star Select and ART to sign their transponder deals.

The pay TV platforms boost ArabSat's lineup to about
90 networks.

ArabSat's growing strength could also weigh on
NileSat, as well as on Intelsat's New Skies unit and PanAmSat Corp., the
Mideast's other satellite-service providers.

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