Two DTH Platforms to Bow in Brazil

Author:
Publish date:
Updated on

Sao Paulo, Brazil -- Two new Ku-band direct-to-home
satellite services are scheduled to enter Brazil, which, if all goes according to plan,
will produce a grand total of four DTH players within that market by year's end.

One of the new DTH platforms, which plans to launch in the
third quarter, is a joint venture between EchoStar Communications Corp. and two local
partners -- construction company CR Almeida and satellite provider KTV -- according to a
press release.

The other new venture is being spearheaded by Tecsat, a
Brazilian manufacturer and supplier of equipment to C-band operators. Tentatively known as
Tecsat Video, the service will begin beta-tests in February, and it plans to bow in March,
sources said.

Tecsat will initially launch on four transponders on
Intelsat 709, while EchoStar will use six transponders on Argentina's Nahuelsat
satellite.

These birds are set to fly, but the question is: Will they
be easily shot down? The newcomers face two formidable DTH incumbents that operate in
Brazil as part of wider panregional platforms: DirecTv and Sky Latin America, backed,
respectively, by Grupo Abril and Organizaçoes Globo in Brazil. Together, they claim some
200,000 subscribers in the country.

The new ventures 'will have to invest huge amounts of
money in a business that typically has a very long payback,' said José Luiz
Frauendorf, a consultant with media-consulting firm The Virtual Co. 'Besides, there
is the question of pay-per-view. With the major studios already signed with DirecTv or
Sky, what will be left for them to show?' he added.

'We all know that Brazil has a lot of potential in pay
TV,' said Leila Loria, DirecTv's general manager in Brazil. 'But what
history elsewhere shows is that unlike cable, there is not room for many
competitors.'

Little is known about the EchoStar programming lineup.
Ditto for Tecsat, which has yet to announce its big international partner. Its strengths
appear to be its technology and its large vendor network, with which it is signing
exclusive sales deals for its new venture. 'Depending on compression rates, we might
reach 60 video and 30 audio channels quite soon,' said Antonio Alberto Teixeira, a
Tecsat satellite consultant.

The company's switch into Ku-band could just be its
ticket for survival, given that 90 percent of its current revenue comes from Brazil's
fading C-band business, which has some 180,000 subscribers nationwide.

EchoStar's executives did not return calls at press
time, but the brain behind this venture in Brazil is apparently KTV's chairman and
CEO, Romulo Villar Furtado, who was the most powerful man in Brazil's communications
ministry at times throughout the dictatorship years (1964 to 1984).

Related