Select Committee on Science and Technology Written Evidence

Memorandum 62

Submisison from Avanti-Screenmedia


  1.  Avanti-Screenmedia has been involved in the downstream applications of satellite communications since the company's creation in 1996. Avanti is a public company listed on the Alternative Investment Market of the London Stock Exchange. It employs approximately 120 staff, had a turnover to June 2006 of £12 million and made profits in excess of £3 million. From a starting capital of £2,500, the company is now valued in excess of £76 million.

  2.  Avanti owes much of success to a long and productive relationship with the European Space Agency's ARTES Programme, as supported by the British National Space Centre.


  3.  Avanti first began working with ARTES in 1998, successfully obtaining funding to support the ABARIS project to deliver multimedia content to consumers via satellite. At this time the company had less than 15 employees. The project allowed Avanti to develop the key technologies and techniques which later enables it to build its current "screenmedia" business which delivers bespoke multimedia and TV channels to retailers, shopping malls and bars. The screenmedia service now employs approximately 90 staff and forms the core of Avanti's current business. The revenues flowing to government through staff income tax and corporation tax amount to more than x time the original investment from BNSC/ESA.

  4.  On this and several other projects, Avanti has gained a reputation for utilising small amounts of ARTES funding, matched by Avanti's own R&D funds, to build strong, sustainable businesses. ARTES has been found to be far superior to participation in the EC's Framework Programmes as it is more responsive and targeted more closely towards the market's needs.

  5.  Avanti's most recent activity associated with the ARTES programme is the HYLAS project. HYLAS is a highly innovative communications satellite which will employ a series of new payload technologies developed by Astrium with support from the BNSC and ESA. HYLAS will be the first satellite of its kind in Europe to offer broadband and HDTV services, helping to solve the Digital Divide problem in rural Europe and providing broadcast capacity to support High Definition TV programming to complement limited terrestrial digital TV spectrum.

  6.  The HYLAS project is a unique initiative which combines ARTES funding with a large private investment from Avanti's shareholders. The ARTES funding covers half of the costs of the research and development activities on the payload, while Avanti's investment will pay for the satellite platform, the launch and insurance.

  7.  Whilst €35 million is being provided through ARTES over four years, Avanti's investment, which was raised through a combination of new equity and debt, totals some €70 million. Thus, HYLAS is a unique example of the use of government funding de-risking an innovative project to the extent that private sector funding can be brought to bear. The net effect of this combination of public and private financing has been to reduce the development lifecycle for new satellite technologies from eight years or more down to four. This improvement in innovation "productivity" has enabled Avanti to leapfrog other satellite operators and bring new services to market in advance of other European operators.

  8.  The success of this model was possible only because of the unique combination of complementary expertise found in the UK:

    —  An advanced satellite manufacturer in the form of Astrium UK.

    —  An entrepreneurial satellite operator—Avanti.

    —  The world's premier market for satellite finance in the City of London.

    —  A world leading insurance market, also based in the City.

  9.  Avanti is convinced that the ARTES Programme, as operated by ESA with BNSC support, provides enormous opportunities for businesses to benefit from this combination of skills, experience and expertise found in the UK. We therefore recommend that the ARTES programme should form a centrepiece of UK investment in ESA with a long-term budget in excess of €40 million per annum, which would provide a platform for a number of initiatives similar to HYLAS.


  10.  ARTES has proved to be an extremely useful and productive tool for stimulating R&D in satellite technologies, generating investment from outside of the space industry and leveraging government R&D funds to achieve demonstrable commercial returns. We firmly believe that a reinvigorated UK participation in the programme will continue to bring exceptional returns for UK industry and provide further significant opportunities for exports in space products and services.

  11.  Avanti would be pleased to provide oral evidence to the Committee regarding our experiences with the ARTES programme.

October 2006

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