PARIS — Regulatory barriers make gaining access to India’s satellite telecommunications market akin to drinking a keg of beer through a straw, but that is not stopping fleet operatorfrom investing heavily there and setting its sights on capturing 40 percent of the Indian satellite television market in the next couple of years, SES officials said.
Luxembourg-based SES, following several large transponder-lease contracts signed or renewed in 2010 — notably a 12-transponder deal with Bharti Airtel — now has 41 transponders leased to Indian customers.
More capacity is coming as part of a major capital spending program that will see SES’s total in-orbit transponder supply increase by 23 percent — 293 transponders on 12 satellites to be launched between 2011 and 2014.
In a presentation to investors May 24, SES Chief Executive Romain Bausch said 85 percent of that capacity is going to be emerging markets, mostly for television broadcasts.
With China still resisting the arrival of non-Chinese satellite service providers and posing other problems for outside companies, India is by far the biggest of the emerging markets.
Deepak Mathur, SES vice president of sales for India, the Middle East and Africa, said India’s six pay-TV and one free-to-air direct-to-home satellite television providers already have a combined 32 million subscribers, about equal to the entire U.S. market. These subscribers pay only a fraction of what U.S. subscribers pay in U.S. dollar terms — only $3 to $6 per month — but their numbers are growing at a rate of nearly 1 million per month, Mathur said.
In a presentation to the investor event, Mathur said more than 300 television channels are awaiting regulatory approval, a demand crunch that partly explains why India has been forced to allow SES and other non-Indian satellite providers into the market.
Current market estimates are that the Indian satellite television subscriber base will steadily climb to 60 million.
The cellular backhaul market, in which satellite capacity is used to connect rural wireless towers to the main telecommunications grid, is growing at a similar rate. The Telecom Regulatory Authority of India (TRAI) said in a report in May that India already counted 811 million wireless subscribers.
The bottleneck in India’s satellite telecommunications growth story has been regulatory requirements that oblige non-Indian satellite operators to sell their capacity through the Indian Space Research Organisation (ISRO) and its commercial arm, Antrix Corp.
ISRO is also the owner and operator of India’s Insat telecommunications satellite fleet, which has first priority for Indian customers. Satellite and rocket failures in the past few years, coupled with the huge growth in demand, have forced ISRO to lean more heavily on non-Indian satellite bandwidth.
While ISRO signs contracts only for three years with two-year options, SES appears convinced that India will remain a growing market for non-Indian providers for the long term because either the regulations will be relaxed or ISRO will never launch enough bandwidth of its own to meet demand.
In a recent example, Bharti Airtel is gradually moving 5 million of its subscribers from ISRO’s Insat 4CR satellite at 74 degrees east to SES capacity at 108.2 degrees east. SES’s NSS-11 and SES-7 satellites are stationed at that position.
Mathur said the subscriber migration is occurring at a rate of between 7,000 and 10,000 per day.
In addition to Insat satellites, Malaysia’s Measat operator has its Measat 3 spacecraft, located at 91.5 degrees east longitude, serving 7 million subscribers to India’s Big TV and Sun Direct television broadcast companies following a power supply problem on the Insat 4B satellite. SingTel of Singapore is providing six 54-megahertz transponders of bandwidth at 88 degrees east to India’s Videocon broadcaster, which counts 3 million subscribers, according to SES.
To bolster its own offer, SES earlier this year ordered the SES-8 satellite, with the capacity equivalent of 33 36-megahertz transponders, from Orbital Sciences Corp. of Dulles, Va. SES-8 will join SES’s NSS-12 satellite at 95 degrees east and will about double the company’s bandwidth capacity at that slot, Mathur said.
Additional capacity is also being considered for the 108.2-degrees slot, Mathur said. The SES-7 satellite — called ProtoStar-2 before SES purchased it for $185 million in cash at auction in late 2009 — is sold out on the 12 transponders on its India beam.
With direct broadcast television providers scrambling for more bandwidth, and competing for satellite space with corporate networks, “demand is staggering,” Mathur said.