Chinese Move From Asiasat Over Signal Piracy Concerns

PARIS —


Chinese television broadcasters have pulled all their programming from Asiasat’s satellites in favor of the Sinosat-3 and Chinasat 6B spacecraft, which both carry anti-jamming technologies, according to Asiasat Chief Executive Peter Jackson.

Jackson said the move, which was expected, reflects the determination of Chinese authorities to avoid




a repeat of the signal piracy that in the past has disturbed Chinese television broadcasts on behalf of groups protesting Chinese government policy. He said the Chinese had no programming-control or other reasons beyond signal-piracy and jamming for switching satellites.

In an Oct. 10 interview, Jackson said these same concerns explain why Asiasat has ordered that similar anti-jamming hardware be added to the Asiasat-5 satellite now under construction by




Space Systems/Loral of Palo Alto, Calif. Asiasat-5 is scheduled for launch in 2009.

Hong Kong-based Asiasat is 34 percent owned by a subsidiary of General Electric, with a similar shareholding owned by CITIC, a Chinese government-affiliated investment company. A minority of Asiasat’s equity is traded on the New York and Hong Kong stock exchanges.

Because Asiasat’s three current satellites were built by U.S. companies, Asiasat’s management does not have the same freedom of movement that it would have otherwise. This became clear earlier this year when the company sought to de-list its stock in an arrangement that would have resulted in General Electric and CITIC dividing sole ownership of Asiasat.

The U.S. State Department, for reasons that have not been explained, refused to permit Asiasat to change its ownership in this way. The U.S. government has the ability to refuse an Asiasat change-of-control proposal because of the company’s U.S.-made satellite fleet.

Because Asiasat-5 is a U.S.-built satellite,




Asiasat
cannot use China’s relatively inexpensive Long March vehicle to place it




into orbit. At the same time,




buying from a U.S. company has




permitted Asiasat to equip its satellite with U.S.-supplied




anti-jamming technology, whose export for use aboard a non-U.S.-built satellite




likely would face close review by U.S. government export authorities.

But as has been demonstrated by the Sinosat-3 and Chinasat 6B satellites, anti-jamming technology is an affordable feature available from non-U.S. manufacturers as well. Sinosat-3, which was launched in May aboard a Long March vehicle, is based on the Chinese Academy of Space Technology’s DFH-4 platform design. Chinasat 6B, launched aboard a Long March rocket in June, is one of the so-called ITAR-free products built by ThalesAlenia Space, the Franco-Italian satellite manufacturer. ITAR, or International Traffic in Arms Regulations, is a set of restrictions that, among other things, prevent many U.S.-made satellite components from being placed on spacecraft to be launched in China.

Jackson said ordering an anti-jamming capability for the Space Systems/Loral-built Asiasat-5 did not add a substantial cost to the spacecraft.

The departure of Chinese broadcasters, however, has been costly to Asiasat. The company told shareholders that Chinese television broadcasters accounted for 8.8 percent of Asiasat’s revenue in 2006. Asiasat reported $119.6 million in revenue in 2006.

The availability of two new jam-resistant Chinese satellites “poses a very real




threat to Asiasat’s business,” Asiasat said in an Aug. 23 presentation to shareholders in anticipation of the lost business.