Profile: Taking Stock of a Market on the Rise

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  Space News Business

Profile: Taking Stock of a Market on the Rise

By PETER B. de SELDING
Space News Staff Writer
posted: 19 September 2005
01:27 pm ET


Profile: Eui K. Koh, President, Asia-Pacific Satellite Communications Council (APSCC)

The APSCC holds its annual conference in Singapore this year in a much-improved market environment. While the region is still viewed as overstocked with satellite capacity, especially in Ku-band, recent reports from satellite operators suggest that prices have bottomed out.

The Chinese and Indian markets, long closed to outsiders, are now opening and forecasts show robust demand, particularly in those countries but elsewhere in Asia as well, for direct-to-home (DTH) television and satellite-delivered broadband. Shin Satellite’s Thaicom 4/iPSTAR broadband satellite, now in orbit and healthy, could validate the consumer-broadband business model in a wide swath of Asia.

Companies in the region that have ordered or are expected to order new satellites include AsiaSat, Shin Satellite, Chinasat, Measat Global, JSAT Corp. and SingTel Optus .

For APSCC President Eui K. Koh, things look a lot better than they did when he began his first two-year term in 2003. Koh was re-elected for a second term, which ends in late 2006.

Koh, a veteran of Hughes Network Systems, Intelsat and New Skies Satellites, discussed the Asia-Pacific satellite market with Space News staff writer Peter B. de Selding.

The Asia-Pacific satellite market has been through a difficult period. How would you assess current market conditions?

We are certainly out of the slump following the Internet bubble’s burst. The digital divide is very wide in Asia, and satellites have a big role in accelerating connectivity to areas with poor infrastructure.

Demand for broadband services and DTH services is very strong. Due to Asia’s cultural diversity, separate DTH services will be required for each country, with more indigenous programs. Supply and demand for C-band is pretty much in balance. But there is a glut of Ku-band capacity and this is likely to continue.

Is this true in South Asia as well — Pakistan and India, for example?

India certainly has a Ku-band requirement and is more culturally diverse than, say, China. India also has taken concrete steps to deregulate. Pakistan is looking for a DTH service as well and Ku-band would be ideal for that country.

Numerous small satellite operators serve Asia. Is this likely to change as consolidation occurs among the bigger, global players?

Many believe consolidation is long overdue in Asia, where national satellite operators are either directly supported by governments, or are government-owned corporations with market protection in their domestic markets.

Some regional operators are not doing well financially as they lack economies of scale. But the concept of national ownership still may continue for awhile. With the emergence of DTH platforms, government content regulators like to keep control of satellites.

Even so, I can see governments permitting at least some foreign ownership in satellite companies, but not a majority stake. To keep control of content, governments want to keep control of satellite operations.

Any chance of Asian governments agreeing to common licensing standards for ground equipment and satellite access?

Not in the near term. Again, the governments want to keep control of content coming into their territories, and that means keeping control of satellite operations and landing rights.

In China there seems to be an increasing number of national operators — the opposite of consolidation. Is this a stable situation?

China is of course an interesting study. Demand for satellite broadband there is large to serve rural areas beyond the terrestrial telecom infrastructure. And the government has announced that DTH services will be launched before the 2008 Summer Olympics, and that some Olympic programming will be in high-definition.

There are rumors that China Telecom, China Mobile and ChinaSat will be merged into a single company offering a full range of services. I understand there is a stalemate now for S-band allocations between the [cellular telephone] 3G system and a proposed Digital Multimedia Broadcasting via satellite — DMB-S. Demand in China for broadband applications such as online games is growing rapidly among young people.

Japan and Korea have launched DMB-S services, partly relying on ground-based repeaters to carry the signals into urban areas. Are early results promising?

DMB-S uses Ku-band uplinks and S-band downlinks with the help of the terrestrial repeaters to deliver video programming, data and voice to hand-held devices, even inside vehicles moving at high speed. But the terminal cost remains fairly high. If this service succeeds, satellite and mobile operators in China and India will be tempted to implement it there too.

High-definition television (HDTV) is rolling out in the United States and, just behind, in Europe. What is the status in Asia?

Australia, Japan and Korea are broadcasting HD programming on their DTH platforms, and viewer response has been very positive. China will make a massive stride here to accommodate HDTV demand during the Olympics in 2008.

The December 2004 Indian Ocean tsunami highlighted the role of satellites in disaster monitoring and disaster response. Are there any long-term developments in the market that will result?

A natural disaster like that changes the minds of strategists, and many more people now realize the importance of satellites in giving early warning of floods, drought, typhoons/hurricanes and the like. And planners now realize the importance of satellite communications when terrestrial telecom infrastructures are destroyed.

I am sure many Asian countries will launch geo-observation satellites for natural disaster forecasting in the coming years. I must say that U.S. manufacturers are likely to be handicapped in addressing this market because of current U.S. export regulations, which make it difficult for U.S. companies to bid on such projects.

Regulatory restrictions remain a hot topic among satellite operators serving Asia. Is APSCC addressing this issue?

In Asia, regulatory problems have persisted for a long time, and this continues today especially because of the recent trend toward legislating content. Due to convergence of the technologies, there has been infighting among regulatory agencies in several nations over who has regulatory primacy. This makes it even more difficult to develop region-wide solutions. This is an issue that APSCC will pay attention to in the coming months. We will seek a common ground for regulators, operators and service providers.