Home / Interviews / Orbit TV Enters New Territory – Felix Serhan, Orbit’s vice president and managing director

Orbit TV Enters New Territory – Felix Serhan, Orbit’s vice president and managing director


On the summer of 2003, Orbit Satellite Television and Radio Network announced the launch of its Direct-To-Home broadcast services and a full range of viewing and entertainment applications in the Egyptian market. TBS correspondent Hala Abdulrahman reviewed Orbit's offerings and interviewed Felix Serhan, Orbit's vice president and managing director.


The pay-TV business in Egypt witnessed a potentially significant event this summer. Orbit Satellite Television and Radio Network, the Middle East Pay TV platform, has been introduced to the Egyptian market with an exceptionally attractive promotional offer, an unprecedented low monthly subscription, a free IRD, and a differential advantage in Arabic programming production, all of which they see as a positive step towards addressing and satisfying the viewing needs of Orbit's subscribers in Egypt.

Orbit offers two packages in Egypt, Alfa and Mega. At LE60 the Alfa is comprised of all five Arabic channels, CNN, and 20 audio channels. The Mega, priced at LE120 per month, offers a highly comprehensive range of Arabic and Western entertainment including six English movie channels, two sports channels, six English news channels, two Arabic movie channels, three children's channels, two documentary channels, a dedicated Arabic music channel and 20 thematic radio music channels.

Orbit Satellite Television and Radio Network made its debut in 1994 as the world's first fully-digital, multi-channel, multi-lingual, direct-to-home pay television service. Headquartered in Bahrain, Orbit has offices across the Middle East and North Africa, including Saudi Arabia, the United Arab Emirates, Jordan, Kuwait, Lebanon, Qatar, Tunisia, and now Egypt. The Orbit footprint covers the whole of the Middle East and North Africa from Morocco to Iran.
Orbit has signed a distribution agreement with Digital Media Systems (DMS) to provide a full sales structure, technical center and customer service support team for the whole Egyptian market.
Such a major event in the pay-TV business has raised questions as to the reasons behind Orbit's launching of these services in Egypt after ignoring the Egyptian market for many years, and the preparations, opportunities, and challenges associated with such a launch.

Felix Serhan received his Bachelors degree in Science at Alexandria University. He then worked at several prestigious companies, such as Cooper McDougall & Robertson (UK), Thomson C.S.F-DRT, ABC Engineering-Paris, before joining Orbit Satellite Television and Radio Network in 1994 as director of operations and managing director of Orbit Productions in Egypt. Mr. Serhan established Orbit Productions and has successfully built and developed contacts and business relationships with ERTU (Egyptian Radio and Television Union), EMPC (Egyptian Media Production City), the Ministry of Culture, Egypt Telecom (Arento), and most of the prominent production houses in the music and movie businesses.

In 1998, Felix Serhan was promoted to vice president for operations for Orbit Communications Group, and earlier this year was appointed a board member and managing director for Digital Media Systems.

Mr. Serhan started by pointing out that the launch of Orbit's services in the Egyptian market is part of Orbit's strategy to strengthen its presence in the Arab World and the expansion plans to leave no markets in the Middle East and North Africa untouched; it is now time for the Egyptian audience to experience the latest technological innovations in pay-TV.

He also pointed out that Orbit's subscribers in Egypt will now be able to enjoy the latest blockbuster Arabic and Western movies, award winning dramas, major sporting events, and a host of additional functions from the latest state-of-the-art satellite receiver/decoder, the XD-300.

Abdulrahman: Orbit TV is now finally in Egypt, and on Nilesat. Why did it take so long to take such a decision to enter the Egyptian market after nearly a decade of Orbit's operation in the Middle East and North African (MENA) region?

Serhan: Since its inception in 1994, Orbit Satellite Television and Radio Network has captivated its audience in most of the Arab world and the MENA region, has achieved a high level of penetration around the region, and has always had the vision of the Egyptian market with the aim of maximizing subscribers and ensuring substantial revenue growth. Orbit channels are now received via Nilesat and Arabsat satellites, the Alfa package is transmitted via Nilesat and the Mega package is transmitted via Arabsat. Orbit has greatly enhanced capabilities in terms of both geographic coverage and technology.

However, let me tell you that we have been through a great deal of preparation and tremendous efforts have been deployed. Very long processes of preparation have taken place in terms of legal and operation issues. We first had to strongly establish Orbit's legal entity in Egypt. We established Digital Media Systems (DMS), which is the entity designated for distribution, collecting subscription fees, TV production, and finalizing licenses needed for Orbit's TV platform in Egypt. The operation's infrastructure, licenses, and legalities, in addition to partner's agreements have been very intense.

Abdulrahman: Have you set up a call center and subscriber management system (SMS)?

Serhan: Absolutely. Our call center, which is located in the 6th of October Media City, has been set up to provide professional first-class services to Orbit's subscribers enquiring about our services, and for technical support, installations, programming enquiries, replacement, and downloading, in order to provide accurate and comprehensive information and ensure current subscribers' satisfaction. Customer Service Representatives are available to answer calls seven days a week around the clock.

Not only we are after new subscribers in Egypt, but we also have developed and implemented a retention program to minimize turn-over. The call center's mission is to increase our subscriber base and maintain current subscribers. In addition to making sales, a major function of the call center, our call center is a customer satisfaction center.

Abdulrahman: What is Orbit's substantial business relationship with the Egyptian Media Production City?

Serhan: We have developed a substantial business relationship with the Egyptian Media Production City over the past few years. Our call center is there and we will also be moving our offices to the Media Production City very shortly. It is also important to note that Orbit TV is one of the first investors in the Egyptian Media Production City in 6th October City, and we currently utilize and operate a total of seven studios in the Media Production City.

Abdulrahman: Could you describe your general business strategy?

Serhan: The pay-TV business is a highly competitive business, and the better we understand our subscriber preferences and the competitive environment, the better we can target the right content mix and volume to suit their specific needs and satisfy the viewers' preferences. Our objective is to continue to grow as we aim at further expand our subscriber base.

Abdulrahman: Orbit has been accused of ignoring the Egyptian market for many years, but this summer Orbit decided to penetrate the Egyptian market, where only a relatively small number of viewers actually pay for what they watch. Could you please explain your strategy in this regard?

Serhan: The Egyptian audiences have always been in the tops of our minds. With over six million TV households, Egypt is one of the most important markets for television entertainment. Orbit Satellite Television and Radio Network has been introduced to the Egyptian market with an aggressive and appealing campaign capitalizing on the very well established brand name, as well as a substantial successful history in the MENA region and as the world's first fully-digital multi-channel, multilingual direct-to-home pay-TV service offering excellent sound and video quality.

We have carefully studied the Egyptian market from a qualitative and quantitative point of view in order to determine the parameters, patterns, and factors controlling the viewing and purchasing habits in Egypt and all aspects related to the market structure, TVHH, the average size of the families, annual income, the number of children in the families, the number of children under the age of 16, the working population, activities enjoyed during free time, exposure to various media, the current TV viewing habits, preferences, and favorite program genres. Accordingly, we have allocated sufficient time to come up to the best communication strategy to reach the Egyptian subscriber and disseminate the right values for each segment and to produce programs that satisfy all Egyptian segments' needs and expectations.

Abdulrahman: Each market has its own identity. Could you describe the Egyptian market from your professional point of view?

Serhan: After carefully studying the Egyptian market, it should be noted that it is very diversified compared to other Arabic countries in the region while the income level is low as compared to other, oil-rich, countries. However, the Egyptian viewer is very selective as regards the time consumed in front of television and I would also say that he is also quality oriented, and I would say that the Egyptian audience is much more price conscious, better informed and more exposed to pay-TV than ever before. Our wide range of the best in Arabic and Western entertainment and state-of-the-art decoder, and our special pricing and packaging for the Egyptian market, make us the best choice in Egypt today. Creative marketing research and techniques have been used to sustain the growth we have so far witnessed and we have conducted an extensive research to study the competitive environment, and viewers needs, expectations, and priorities to ensure a leading competitive advantage in Egypt, at all times.

Abdulrahman: The old high subscription fees and expensive IRD price of Orbit TV package created earlier a barrier to entry for many of the potential subscribers in the Egyptian market. However, the package you have now introduced in Egypt was a surprise and has even been described—by the other players—as a "price war." What is your comment?

Serhan: I believe that it is very inappropriate to use the term "price war." The question of price is a critical issue and in many ways, the key element of the marketing mix. Sometimes the subscriber is forced to make tradeoffs between price, content, and features. Let me explain. Price was a breakthrough strategic tool in our acquisition campaign in Egypt. We were considering two different scenarios in our pricing strategy: scenario number 1 was to offer one price for all channels, and scenario number 2 was to offer a choice of two different packages satisfying the Arabic programming preferences of one segment of the Egyptian market and another package for the English programming for a second segment. Pricing was basic. So we have developed a strategy offering two propositions—the monthly subscription fees of 60 Egyptian Pounds for Alfa bouquet and 120 Egyptian Pounds for the Mega bouquet, considering advanced payment for at least 4 months. Credit card holders can pay on a monthly basis. An additional sum of 250 Egyptian Pounds represents a refundable fee for the set-top box. On top of all that, TV Max, Orbit's pay-per-view service, is available to all Alfa and Mega subscribers, offering the very latest Arabic and English blockbuster movies. We have studied the competitive environment and found that pricing, programming, and packaging are fundamental in our marketing strategy and we are not simply offering TV channels.

Abdulrahman: So, what are the other services you are offering to your subscribers?

Serhan: Let's agree that we have emphasized the need to greatly expand and streamline our regional growth process. We have then developed a comprehensive integrated plan to improve our competitive edge through introducing additional services. Orbit offers a wide range of interactive applications such as Pay-Per-View (PPV) and voting as well as other features including two-level parental control allowing parents to control which films, programs, and channels their children can or cannot watch. In addition, there is a seven-day Electronic Program Guide (EPG) with detailed program information. Subscribers can assign favorite channels and set automatic reminders for favorite programs. Orbit's platform provides a wide variety of new interactive services, Internet browsing, and video games. We will provide booking and downloading via remote control units very soon. Video-On-Demand and instant on-line account debit are additional interactive services that will be offered in the future.

Abdulrahman: Does that imply that TV Max PPV and all other interactive services are considered to be a key incentive for subscribers acquisition and adoption of the new set-top box?

Serhan: TV Max represents a milestone for our platform. Orbit Satellite Television and Radio Network has achieved a high level of penetration around the MENA region, maximizing subscriber numbers and ensuring substantial revenue growth capitalizing on the introduction of new technology represented in the set-top box. The first receiver introduced to Orbit subscribers, back in 1994, used MPEG 1.5, and was, at that time, a considerable revolution in the pay-TV business in the Arab world. It was manufactured by Scientific Atlanta and was the first digital receiver offering the best audio and video quality. The current Integrated Receiver/Decoder is essential to Orbit's full MPEG 2 digital video broadcasting compliant transmission. The present set-top box, the XD-300, represents an innovation in home entertainment, allowing subscribers to receive all Orbit channels as well as the full range of free-to-air channels from Nilesat and Arabsat, which offer 450 free-to-air channels, which is of prime interest to a wide segment of the Egyptian market. It also offers a complete range of family entertainment. This set-top box is the only one with embedded Conditional Access, with home theater Dolby digital surround quality, and with the potential to receive other satellites in the future. The XD300 is designed with the future in mind. Let me explain further: the advanced technology of the box allows it to be upgraded automatically via satellite, keeping the decoder up-to-date with the latest in technological innovations. Orbit has always been at the forefront of technological innovation, and this state-of-the-art platform offering DVD quality picture and sound will seriously enhance our viewers overall enjoyment of the best TV entertainment the world has to offer.

Abdulrahman: Pay-TV has been described as a relatively slow market in the Middle East and North Africa region, specially given the fact that the audience is not acquainted enough with the "pay to watch idea." How do you evaluate this statement in light of Orbit's projected penetration of Egypt?

Serhan: After carefully analyzing the Egyptian market, we have identified a huge opportunity to generate incremental revenues. I would simply say that over 50 percent of our projections for the year 2003 have already been realized for the Egyptian market. Our forecast estimated our acquisition would reach 50,000 subscribers by the end of 2003. We have already tested the market and the feedback is highly promising.

Abdulrahman: What are your projections for the next two years?

Serhan: We have studied the situation carefully and I would say that our projections are to reach 150,000-200,000 subscribers by the end of 2004 and over 350,000 subscribers by the end of 2005.

Abdulrahman: Are your projections reachable, in light of the current economic situation and changes lately witnessed in Egypt?

Serhan: We are absolutely positive about those projections. I have just mentioned that over 50 percent of our projections for the year 2003 have already been realized for the Egyptian market. I would also say for example that since our launch in Egypt, we are getting over 2800 calls daily enquiring about our bouquets and subscription requests.

Abdulrahman: Orbit started as the leading fully digital Pay TV operator offering a wide range of the best Western content. A few years later, it moved towards introducing Arabic programming in its line-up and later still towards increasing its Arabic production. Do you intend to further increase Arabic content on your platform?

Serhan: Content is king and it is content which determines the value of any provider in the entertainment business, and specifically in pay-TV. Since our debut, we have continually enhanced and renewed our programming, because excellence is at the heart of the value we deliver to our subscriber. We have produced a large variety of programming that appeals to the general viewer, but recently more targeted shows are multiplying. We are developing a differential advantage for Orbit by the production of programs to satisfy the viewing needs of Egyptians.

Besides our ongoing efforts to extend our subscriber base in all other countries of operation, we realize that our continued success depends on local production and developing new shows. To ensure a competitive edge, we created a differentiated advantage over the other pay-TV operators. This involves the offering of unique pan-Arab content programming that our competitors lack. Orbit strives to secure unique entertaining and informative programming tailored to its subscriber's needs and preferences and communicating directly with Arab viewers in all markets. We are continually developing new programming line-up to satisfy and maintain our current existing subscribers and attract new ones through offering a wide variety of high quality programming that educates, entertains, and informs its audience. "Diversity" is the word, simply because we are targeting varied, diverse, and mixed segments of the population in Egypt and in all our markets. We offer something for everyone—news, health, science, arts, history, movies, music, public affairs, current issues and, of course, sports.

Abdulrahman: Talking about sports as one of the major drivers in the pay-TV business in the Middle East and North Africa region, what does Orbit have to offer to its viewers in that field?

Serhan: Although we have not yet formally made any announcements, I wish to share with you that we have made decisions regarding a wider programming choice. Let me take this opportunity to disclose some news: two new sports channels will be added to our current bouquets—Orbit Sports Channel, which will offer a comprehensive coverage of major regional sports championships and tournaments, and an ESPN channel. Additionally, talks are underway with a major sports broadcaster, but we are not ready to announce the name yet as negotiations are still on-going.

Abdulrahman: Could you shed some light on Orbit TV and Radio Network's plans for the future? Are there any plans to add new channels to Orbit's existing channels?

Serhan: We strive to enhance our service through pursuit of a brand new channel line-up offering a new combination of channels. We also strive to introduce extra new channels to offer added value to Orbit subscribers and develop first-rate bouquets. Very soon, we will be launching new channels—" Fann" ("Art"), an Arabic channel featuring different kinds of art, and Cinema 2, a new Arabic movie channel showing new Arabic releases. Moreover, a complete new branding has been made to our channels: "Al-Thania" ("Channel Two") will be changed to "Al-Safwa" ("Elite") channel, showing cultural, religious, political, and current issues programming, and "Al-Thalitha" ("Channel Three") has been changed to "Al-Yom" ("Today"), which will be a family channel with a special emphasis on young adults. This new branding is associated with a new programming line-up exclusively tailored and carefully customized in an attractive and unique manner to satisfy needs and demands of the majority of Arabic speakers.

Abdulrahman: It is unclear how the other players will react to Orbit's penetration of the Egyptian market, but we can absolutely say that "competition has became stronger."

Serhan: Fair competition would not hinder our growth. The only limitations from my point of view would be unfair competition in terms of prices in the market. For us, we are not in a war, we are addressing our prices to accommodate all segments of the Egyptian market and not only the privileged. Another point that I would really like to highlight in this regard is "monopoly" in terms of sports events of major interest to the Arab viewers in the region. Working together and not competing with each other is the key to success. Personally, I believe that the future may possibly see mergers of multimillion-dollar pay-TV businesses resulting from strong business relationships. Deals could be reached between players who share the same visions, which in my opinion, could generate billions of dollars for the pay-TV business in the region. Such a step could of course create larger and stronger entities. Our objective is to continue to grow as we aim at further expanding our subscriber base.

About Hala Abdel Rahman

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