PARIS — Bulgaria Sat, the fledgling Bulgarian satellite operator whose first satellite launched this summer at a time when oversupply has driven prices down, is trying to sell half of its capacity to international customers in more challenging market conditions than first anticipated.
BulgariaSat-1 launched June 23 on a preflown SpaceX Falcon 9 rocket, and has half its capacity allocated for Bulgarian and Serbian television broadcasts from parent company Bulsatcom. That provides Sofia, Bulgaria-based Bulgaria Sat with some guaranteed use of the satellite, but Maxim Zayakov, Bulgaria Sat’s chief executive, said the downturn in capacity pricing has made the new satellite operator the subject of frequent scrutiny, especially since Bulgaria’s population numbers only about 7 million.
“Everyone says why do you do this? But in any case, five years ago when we started the project, we definitely needed capacity to grow, so that was one of the main reasons, and we saw then and still see some opportunities,” Zayakov said Sept. 11 at the World Satellite Business Week conference here.
BulgariaSat-1 covers Europe, with an emphasis on the Balkans, as well as the Mediterranean coast. Space Systems Loral in Palo Alto, California, built the satellite with 32 Ku-band transponders and a design life of at least 15 years. Zayakov said Bulgaria Sat counts revenue from both Bulsatcom subscribers and capacity leases.
“Our core market intention remains to serve our own affiliate [direct to home television broadcast] platforms in Bulgaria and Serbia,” Roughly 50 percent of BulgariaSat-1 is dedicated to these platforms, he said, as well as some government users. The rest is intended for leasing out to other customers.
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Zayakov said the increasing presence of terrestrial alternatives to satellite direct-to-home (DTH) broadcasts, namely internet-protocol television and OTT, or “over-the-top” streaming services, are creating competition in markets where Bulgaria Sat would like to expand.
“There is this clear trend of consolidating DTH operators within one country simply because the deployment of IPTV and OTT is having an effect on our overall pay-TV DTH distribution in the sense that market share has been shrinking a little bit all over the world,” he said. “So that drives, and tends to consolidate those subscribers on one satellite or one platform. We also see this as an opportunity in the position where we are.”
Zayakov said this is particularly present in urban areas, but that Bulgaria Sat sees long-term need for satellite nonetheless.
“The broadband networks are still only about 45 percent of [Bulgarian] households,” he said. “They will reach probably about 60 percent in the next five to 10 years, but they will never reach 100 percent. So certainly there is still opportunity for DTH.”
This month Bulgaria Sat signed Germany-based teleport operator Media Broadcast Satellite as a customer. Zayakov said the satellite operator has some near-term partnerships that should enable greater expansion internationally.