SES, Eutelsat Pact Could Open U.K. Market

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London -- European satellite giants Société Européenne
des Satellites and Eutelsat have ended their ongoing squabble and agreed to share
transmission rights at the key 28.2 and 28.5 degrees east orbital slots.

The agreement could loosen direct-to-home platform British
Sky Broadcasting Group plc's monopoly on the U.K. satellite market.

SES' Astra satellite system occupies the 28.2 degrees east
slot with two satellites, and it beams about 200 digital channels to the United Kingdom
for programmers such as BSkyB, Viacom Inc., Flextech plc, Turner Broadcasting System Inc.
and Music Choice Europe.

The agreement between SES and Eutelsat presents some major
advantages for smaller, niche broadcasters.

Eutelsat has traditionally charged less per transponder for
its capacity, and it has long been a favored home for smaller or independent niche
channels that could not afford the rates on SES' Astra system.

Such channels can now reserve space with Eutelsat and still
gain access to BSkyB viewers, although they would not be part of the official BSkyB
programming platform.

There are currently channels wishing to gain access to the
valuable U.K. DTH market, but they do not want to pay to join the BSkyB platform.

Eutelsat can also use the bulk of its newly won frequencies
to transmit fast-growing multimedia material to BSkyB homes.

Eutelsat, owned by a consortium of European telcos, had
vociferously laid claim to the adjacent 29 degrees east slot, saying it held prior use to
the position.

The arguments reached a boiling point at the end of last
year, with the International Telecommunications Union ruling that SES had the right to
those orbital slots.

At the time, Eutelsat threatened to appeal the decision.
But in January, the company appointed a new director general, Giuliano Berretta, who has
taken a softer line than his predecessor.

Progress was aided by cooperation from Deutsche Telekom
A.G., which owns stakes in both SES and Eutelsat.

Deutsche Telekom also holds the official rights to the
midpoint 28.5 degrees east orbital position with its aging Kopernikus satellite, and it
has, in effect, assigned those rights to Eutelsat.

"I am more than pleased that Europe's two leading
satellite operators have reached such a constructive and balanced solution for a
coordinated frequency use," Berretta said in a prepared statement. "With market
interests uppermost in their minds, Eutelsat and SES have brokered a historic agreement
that will benefit the European satellite market as a whole."

Eutelsat plans to build a new satellite with 24 Ku-band
transponders that will be operational in about 18 months, taking over the existing
Kopernikus contracts.

SES will continue to use Astra 2A and Astra 2B from the
28.2 degrees east position, but it will redirect some of its spot-beam antennas to regions
outside of Europe -- toward Russia east of Moscow, Africa and possibly India.

Astra plans to order a third satellite (Astra 2C), which is
expected to be operational by the end of next year.

"The agreement is a cornerstone in the consolidation
and expansion of SES' core business in Europe, at a time when the company is actively
pursuing an ambitious strategy of geographical expansion and service
diversification," SES director general Romain Bausch said in a prepared statement.

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