Satellite Television Reception
in Latin America

Both wired and wireless cable are essentially designed for urban areas.  The capital outlay, whether in the form of networks of cable wires or microwave transmitters, requires a sizeable subscriber base to recover the costs.  It is not economically viable to provide these services to a sparsely populated areas or over unfavorable terrains.  As a consequence, a large section of the population in a country may not be covered by cable even though many of the inhabitants are willing and able to pay for multi-channel services.

The only way to deliver multi-channel services to all those who wish to have them is through satellite delivery services.  Already, the satellites are the means through which program providers distribute to cable system operators.  Each program provider has to provide its program feed to hundreds or even thousands of cable system operators across a wide area.  It is not economically feasible to use a terrestrial distribution system.  So the program provider sends a beam-like signal (known as the uplink) from a ground station to the satellite.  The satellite has a number of transponders.  The program is received by a designated transponder on the satellite, which amplifies the ground signal and transmits back down to earth a signal (known as the downlink) across a wide area known as the foot print.

The downlink signals fall into two separate bands of frequencies.  The C-band of frequencies (between 3700 and 4200 MHz, where MHz represents a megahertz, or 1 million cycles per second) is presently the principal mode of distribution from program providers to cable systems.  In this way, a cable channel distributes its signals to a large number of cable system operators over a large area at the same time.  The size of a C-band satellite dish may be as much as 25 meters in diameters.  A cable system may carry the programming from a number of different providers who use different satellites.  Therefore, the cable systems may have to use several satellite dishes pointing towards different satellites in the sky to collect all of the required program feeds.

The Ku-band of frequencies (between 10,700 and 12,750 MHz) is higher in frequency than the C-band.  As a consequence, the receiving satellite dishes are smaller in size, but can still be quite large.  These dishes can be frequently seen in a number of Latin American countries (see photos below).

Cardoso, São Paulo State, Brazil (photo credit: GAP)	Caracas, Venezuela (photo credit: Deborah Levy)
Panama City, Panama (photo credit: Nitzia Thomas)	Várzea Alegre, Ceará, Brazil (photo credit: GAP)

A critical recent development is that satellite broadcasters are now allowed to use higher power for the transponders.  This means that small dishes (nicknamed "pizza boxes") can now receive signals of comparable quality as the larger, older dishes.

In Latin America, there are presently two major direct-to-home (DTH) satellite television services (DIRECTV and Sky TV).  In principle, these services should have been available simultaneously across all of Latin America the moment that they were launched.  In practice, due to the complexities of setting up marketing and customer service organizations as well as coping with politically sensitive issues of national sovereignty, these services are being rolled out gradually, one country at a time.  

One of the odd marketing facts is the DTH services are often represented by cable television services, who are obviously best qualified in technical and marketing services, but who may have conflicts of interest since every new DTH service contract is a potential cable customer lost.

Comtech / DIRECTV, Guatemala City, Guatemala (photo credit: Nitzia Thomas)

There are two principal types of DTH satellite subscribers.  First, there are those people who live in areas not currently (nor ever likely to be) served by any cable system.  DTH satellite provides them with their first opportunity to watch multi-channel television.  Secondly, there are many former cable television customers who switch over either because they are dissatisfied with the cable services or because the DTH service is thought to be superior (more channels with better reception quality at comparable cost).

According to the 1998 Los Medios y Mercados de Latinoamérica Study, there are 2,000,000 DTH satellite subscribing households in Latin America.  By geographical region, they are distributed as follows:

Argentina: 10,000 DTH households
Brazil: 1,569,000 DTH households
Chile: 3,000 DTH households
Colombia: 162,000 DTH households
Mexico: 174,000 DTH households
Venezuela: 12,000 DTH households
Central America / Caribbean: 63,000 DTH households
Balance of South America: 17,000 DTH households

In an apartment building, it is unlikely that each apartment can have its own large satellite dish pointing in the same direction.  Instead, there may be a single large satellite dish on the rooftop and the signals are then distributed to the different apartments.  This type of system is known as Satellite Master Antenna Television (SMATV).  The apartment dweller pays a periodic subscription fee in order to access the system.  The subscription fee goes towards repaying the costs of purchasing the antenna and possibly to the program content providers.

Cali, Colombia (photo credit: Deborah Levy)

Since the downlink signals are sent across a large area in a non-selective manner, most program providers encode their signals and only issue the decryption keys to contracted operators.  But there are some exceptions:

• A number of commercial satellite programmers rely on advertising or direct response revenues rather than subscriber fees.  It is therefore in their best interest to allow as many cable systems as possible to pick up their unencrypted signals for free.  Examples of ad-supported programmers are the so-called superstations from the U.S., such as KTLA from Los Angeles, WGN from Chicago and WPIX from New York City.  It is not necessarily the case that these superstations wish to reach a Latin American audience, but that their signals are unwittingly available down there.  Examples of direct response services are the home shopping channels, such as QVC.

• A number of satellite programmers are funded by other sources.  Examples are religious networks (such as EWTN) and public service and government-sponsored channels (such as Worldnet).

• A number of satellite programmers are open-air broadcasters who are using the satellites to distribute their signals locally.  Any spillover outside their market is of no value to them since they usually do not own the program rights outside their markets.  The best examples are the open-air broadcasters in the Denver market in the USA, whose signals are widely watched in Central America.

• The encryption is not always secure.  For older systems, especially those with US footprints, there exists a gray market for signal decoders.  On new systems, such as those over Latin America, unauthorized decoding is more difficult, if not impossible.

There conditions have led to the emergence of an unauthorized cable market.  This is especially prevalent in countries where no cable television legislation exists.  It is then neither legal nor illegal to operate a cable system.  Entrepreneurs have, therefore, invested in large satellite dishes and redistributed the signals by cable among subscribers within the surrounding community.  This method of distribution is known locally as satellite cable.

Caracas, Venezuela (photo credit: Pablo Verdin)

Satellite cable systems can have a full-service offering, with the entrepreneur investing in multiple dishes to pick signals off different satellites.  Whereas the legitimate cable operator pays the program providers for usage based upon subscriber counts, the extra-legal satellite cable operator does not.  This means that satellite cable can be offered at very cheap rates and still be highly profitable.

Bogotá, Colombia (photo credit: Pablo Verdin)

In the southern cone countries of Argentina, Chile, Paraguay and Uruguay, there is strong legislation with respect to cable television and the satellite signals are also encrypted with new digital technology.  Therefore, satellite cable is virtually absent in these countries.  In the Latin American countries that are under the U.S.-directed satellite footprints (especially in Central America and Colombia), if there is weak or non-existent cable legislation and enforcement, satellite cable is quite common.

According to the 1998 Los Medios y Mercados de Latinoamérica Study, there are 1,503,000 SMATV (including the satellite cable variety) households in Latin America.  By geographical region, they are distributed as follows:

Argentina: fewer than 1,000 SMATV households
Brazil: 55,000 SMATV households
Chile: 70,000 SMATV households
Colombia: 1,349,000 SMATV households (mostly satellite cable)
Mexico: 14,000 SMATV households
Venezuela: 1,000 SMATV households
Central America / Caribbean: 10,000 SMATV households
Balance of South America: 5,000 SMATV households

REFERENCE

• Zona Latina's Satellite Television Operators links

(posted by Roland Soong on 11/14/99)

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