Shin Satellite Faces Challenge Marketing iPStar Service in Asia

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  Space News Business

Shin Satellite Faces Challenge Marketing iPStar Service in Asia

By PETER B. de SELDING
Space News Staff Writer
posted: 03 October 2006
02:42 pm ET


PARIS — Thailand’s Shin Satellite Plc is reporting continued tough conditions as it markets its iPStar satellite-broadband service in Asian nations where DSL links are inexpensive, but government-backed broadband programs in Australia and New Zealand both show promise, Shin President Dumrong Kasemset said.

Shin’s iPStar satellite, with 45 gigabits per second of throughput capacity, was launched in August 2005 and can serve up to 5 million simultaneous broadband users with 100 beams aimed at 14 Asia-Pacific nations.

Kasemset said that despite Shin’s low-cost strategy, it cannot compete in parts of its core South and Southeast Asian markets where DSL subscriptions are as low as $7 per month for 128-kilobit service and $15 per month for higher-speed access.

“That is the reality we face,” Kasemset said. “Satellite simply cannot compete in areas where prices are at these levels.”

Shin has been selling its satellite service at cost to promote iPStar’s capabilities, with terminals sold at three times their cost of production, Kasemset said.

Kasemset said Shin is nonetheless sticking with its target of having 100,000 iPStar broadband terminals in operation by the end of the year — assuming the broadband service is available in China by then.

Chinese customers currently have access to DSL services in the most-developed parts of the country for $15 per month for 256 kilobits per second of throughput. China will be another tough market, Shin officials say.

As of late September, Shin reported that the number of iPStar terminals deployed had surpassed 50,000 throughout its Asia-Pacific coverage area.

One reason for the company’s relative optimism is Australia and New Zealand. Shin announced Sept. 27 that its Australian subsidiary, iPStar Australia Pty Ltd. of Sydney, has been booking new subscribers and deploying terminals at rate of 1,000 per month. That rate should reach 2,000 per month by the end of the year, the company said.

“We expect to reach the 10,000-subscriber mark in Australia in early 2007,” iPStar Australia General Manager Teerasak Sawekpun said in a statement. The company provides its iPStar service for a monthly charge starting at 29.95 Australian dollars ($22.49 ).

The Australian government’s Broadband Connect program, which provides financial incentives for broadband service providers operating in rural areas, is helping Shin as it has stimulated other companies’ broadband rollouts in Australia. IPStar Australia estimates that the Australian market for satellite broadband is about 1 million homes and small businesses.

The Broadband Connect effort in January replaced the Higher Bandwidth Incentive Scheme, or Hibis, broadband-access program. It is budgeted at 878 million Australian dollars and provides reimbursement of some terminal and installation costs to service providers operating in qualified areas.