IPStar Subscription Revenue Up Sharply as Terminal Sales Fall

by

PARIS — Thai satellite fleet operator Thaicom reported a sharp increase in revenue from subscriptions to its IPStar/Thaicom 4 consumer broadband satellite service for the first six months of 2010 even as sales of IPStar terminals continued to drop. Revenue from Thaicom’s conventional satellite business was flat.

Thaicom said it expected that recent setbacks in debuting an IPStar consumer broadband service in India were caused in part by the partial failure of India’s Insat 4B telecommunications satellite in July and newly adopted security regulations adopted in India that affect non-Indian service providers like Thaicom. Both issues, which are not related, are expected to be resolved, the company said.

Reporting its financial results Aug. 11, Thaicom said broadband stimulus programs in South and East Asia, in addition to existing programs in Australia and New Zealand, should support continued growth for IPStar.

The current Australian government incentive to install satellite broadband, called the Australian Broadband Guarantee, is likely to be phased out as a broader broadband deployment occurs as part of a public-private partnership using NBN Co.

NBN officials have said they plan to order two Ka-band satellites to cover Australia, a decision that would appear to threaten Thaicom’s Ku-band IPStar service, which has about 100,000 subscribers in Australia, IPStar’s biggest single market.

But in a presentation to investors, Thaicom said it has “a foothold” in the coming Australian broadband deployment. The company did not spell out its involvement in the NBN-led program.

Thaicom said Japan, which is a more recent IPStar customer and is using the satellite bandwidth to broaden 3G cellular networks’ reach, also is a likely growth market for the company in the near term.

Thaicom said that IPStar service revenue was 1.2 billion Thai baht ($38 million) for the first six months of 2010, up 19.5 percent over the same period a year ago. But terminal sales revenue dropped 9.8 percent, to 408 million baht, in the same period.

Revenue from Thaicom’s conventional satellite business, meaning principally the Thaicom 5 satellite now that Thaicom 2 is nearing the end of its life, was 1.15 billion baht for the six months ending June 30, flat from a year earlier.

EBITDA, or earnings before interest, taxes, depreciation and amortization, was 782 million baht for the satellite business — IPStar and conventional-use customers combined — for the six-month period, up 4.2 percent from a year ago.

The company said Thaicom 5, located at 78.5 degrees east, was 87 percent booked for its Ku-band payload and 91 percent booked at C-band as of June 30. The transfer of Thaicom 2 customers to Thaicom 5 was completed in June.

Backlog on the Thaicom 5 satellite stood at $120.5 million as of June 30.

Thaicom has not disclosed its immediate plans for Thaicom 2, which was launched in 1994 with a nominal 15-year service life. The company had moved a previous satellite, Thaicom 3, to Thaicom’s vacant 50.5 degrees east orbital slot in 2006, but was forced to abandon the position soon after when Thaicom 3 was retired several months after the move.

Operating from 119.5 degrees east, IPStar/Thaicom 4 was launched in August 2005 and, at 6,500 kilograms, was at the time the biggest commercial satellite ever placed into orbit. Its 100-plus spot beams can generate a total of some 45 gigabits per second of throughput.

Five years after its launch, the satellite remains one of a kind. Recent high-throughput broadband satellites being built in the United States and Europe are using Ka-band frequencies to provide greater bandwidth to users in those regions despite concerns that Ka-band suffers more than Ku-band from signal attenuation during heavy rain.