QuetzSat, a partnership between the US fleet SES Americom and the Mexican media group Medcom, was awarded in February the orbital position 77º West, the Mexican state auctioned. Through that new firm, SES Americom plans to develop in Mexico the concept of Americom2Home (A2H) for direct-to-home TV (DTH) services. Echostar will thus return to the Mexican DTH market to compete with DirecTV-SKY and, eventually, venture in business expansion in the rest of Latin America.

SES Americom launched A2H in 2004 in the USA, with the intention of copying the success of its “sister” SES Astra in European DTH markets. Americom¿s A2H idea consists in joining different satellites on the orbital positions 105º and 105.5º West to create with them neighborhood-like operations made up, at the beginning, of the units AMC 14 and AMC 15. In the USA, the AMC 14 provides one-way TV and entertainment on the Ku-band. In turn, the AMC 15, launched in orbit in mid-October last year, has capacity both on the Ku and Ka-band; thus enabling end-users to receive two-way broadband services. Therefore, users get different signals and services in a sole antenna coming from multiple satellites. The A2H system also allows cable TV programmers operating on the C-band to come in.

The first A2H client of Echostar, was the satellite firm currently operating the DTH TV system DISH in the USA, which took up all the capacity of the satellite AMC 15. The deal was closed in March 2004, when it was practically a fact that News Corp, owner of the DTH SKY, was to join in the consortium Hughes Electronics (now DirecTV Group), controlling DirecTV. When merging SKY, DirecTV gained global scale and the position of Echostar –which had failed its attempt to buy its rival- stayed seriously threatened. Though Echostar operates its own satellites, the alliance with SES Americom may contribute three key points:  

Adding broadband to its offer, so as to increase ARPU  A flexible platform to easy integrate new signals And, mainly, global coverage to allow leaving competition in the USA.

In fact, few days after the agreement between SES Americom and Echostar, the US press heard rumors on that both firms had closed a deal to expand in Latin America. The said version seems to be true now with the purchase of the orbital position 77º West, on the part of QuetzSat, where Americom holds 49% of the shares. During the tender ceremony, representatives of the firm QuetzSat emphasized the new satellite would be used to make Americom¿s A2H concept go international. And the truth is that in Mexico, DirecTV-SKY operations are already integrated and its space capacity provider is PanAmSat. Though the fleet has no share links with DirecTV, it keeps secured long-term contracts with the firm. Therefore, without another DTH in view in Mexico to which QuetzSat can sell capacity with the A2H model, the arrival of Echostar in the country seems very likely.

In addition to geographic proximity with Mexico, Echostar has achieved a successful positioning among the community of emigrants of that origin living in the USA. Another important factor is that Echostar has already been a partner of Clemente Serna Alvear, owner of Medcom, main holder of QuetzSat. Together with Inbursa, Carlos Slim¿s financial unit, they were partners for a DTH platform they sold some ten years ago to SKY for its arrival in Mexico.

The mystery would be disclosed any time now. As soon as the position 77º West was awarded, QuetzSat started migrating the satellite AMC 7 of SES Americom, located in the position 137º West, to cover it quickly until a new unit was built; something that takes two years. The temporary satellite, holding capacity in the C and Ku-band, may be operative in its new destiny by May 2005. However, the unit will cover the USA and Mexico. In the case of a possible expansion to South America, QuetzSat will need a new satellite.