Onet and Astra bid to outflank Internet market rivals

By Kamil Tchorek

SES ASTRA SA and Onet.pl SA have joined forces to circumvent the lack of telecom infrastructure in Poland. They will launch a new product this week, allowing them to supply fast Internet to every household in the country. It is an attempt by both firms to secure a niche position in the short term, say market watchers.

The product, named 'satellite Internet', will be offered on the Polish market under the brand OnetKonekt Satelita, and will offer DSL download speed at an unprecedentedly low cost, according to Philippe Glaesener, Vice President at SES ASTRA. To use Satellite Internet Access, constomers will need a PC receiver card and a 60 centimeter satellite dish.

Onet has an exclusivity agreement with Astra, the terms of which remain secret. But for Onet, the success of the venture is apparently not dependent on total control of the new market. Mariusz Biedzycki, Communications Director of Onet.pl says, "This product has a shelf life of up to ten years. The regions will take at least that long to receive cable, so although this is a temporary solution to the supply problem, we will definitely make a great return our investments."

In the broader picture, Onet has impressed tech analysts with its focus on the development of new technology. "There is a major competition issue on the existing market between WP, Interia and Onet," says tech stock specialist Mariusz Sadłocha. "Usually price, speed, and quality are the main factors, but if Onet is capturing a fresh market - the places where there is no cable connection - then the others should definitely be worried."

Paweł Gricuk of JPMorgan Chase Bank, who was close to the acquisition of WP by TPSA says, "The move mirrors Onet's collaboration with Aster city. The next obstacle to overcome was the barrier to the market where cable is unavailable. So this is a smart move. To bid for the leadership of the industry, you have to be everywhere, bringing out new products before anyone else, pushing the market onwards."

"WP is bound up with TPSA and is focused on ownership problems," says Mariusz Sadłocha. "Both Onet and Interia should be using this opportunity to step ahead, and Onet is doing the right thing at the right time. For Interia's sake, I hope they have a rival product."

Astra is setting itself up to increase the reach of content that it is able to provide. Krzysztof Surgowt, managing director of ASTRA Marketing Polska, says that "significant added value" will be available, thanks to the Astra-Onet arrangement. Astra will be able to send satellite television at high resolution, which can be watched on a computer screen. In the future, subscribers will be offered up to two hundred digital TV and radio channels, possibly free of charge. "We want to position Astra as the market leader in Poland, both in broadcast and in satellite broadband, in less than five years." Seemingly, by the time high-speed telecom infrastructure is completed throughout Poland, those who do not have it today may be buying content provided by Astra.

The ASTRA fleet is currently comprised of 13 satellites, transmitting more than 1,100 analogue and digital television and radio channels as well as multimedia and Internet services. SES ASTRA is an SES GLOBAL company, whose securities are listed on the Frankfurt and Luxembourg stock exchanges.