Who’s afraid of ViaSat-3? Some Asian operators say it won’t work there
KUALA LUMPUR, Malaysia — Asian satellite fleet operators are divided over whether U.S.-based ViaSat Inc.’s terabit-per-second ViaSat-3 satellite or anything like it is viable in Asia, and whether Western fleet owners’ rush into mobility markets is a smart move.
There are those who think Carlsbad, California-based ViaSat, which is now building two ViaSat-3 spacecraft to provide unbroken coverage over the Americas, the Atlantic air and sea routes, Europe and Africa, will set its sights next on Asia, as it has promised.
ABS Chief Executive Tom Choi said his company “dodged a bullet” in not being able to secure U.S. Export-Import Bank loans the Boeing-built ABS-8 satellite, which was to have a high-throughput-satellite (HTS) payload.
“Mark Dankberg and ViaSat have set the bar really high” with ViaSat-3, Choi said here Oct. 4 during the APSCC 2016 conference, referring to ViaSat’s chief executive. As a result of ViaSat’s announcement, Choi said, ABS is redesigning ABS-8, with Boeing, and still hopes to secure Ex-Im Bank backing.
ViaSat has clearly rattled Asian satellite operators. Peter Jeon, chief operating office of South Korea’s KT Corp., said one indication of the power of the ViaSat-3 idea is ViaSat’s stock performance, which bears no resemblance to the performance of the larger fleet operators such as SES, Eutelsat and Inmarsat.
ViaSat’s price/earnings ratio was 170 as of Oct. 12. SES’s P/E was 18, Eutelsat’s, 11 and Inmarsat’s, 14.5.
‘Bringing a knife to a gunfight’
“Investors value the growth of ViaSat” compared to the growth prospects of the more-established fleet owners, Jeon said. Investing in wide-beam satellites to compete with a ViaSat-3-type satellite for data transmission markets, he said, “is like bringing a knife to a gunfight.”
But others expressed skepticism that a monster satellite like ViaSat-3 could find traction in Asia, no matter how favorable its cost-per-megabit economics. Were they all whistling past the graveyard? It’s too soon to say, but they marshaled several arguments as to why a satellite that large would not work in a region with so many national regulators and national priorities.
“HTS has been coming for some time now, and it’s still in the future,” said Mitsubishi Akao, executive officer at Sky Perfect Sat of Japan.
Deepak Mathur, senior vice president at fleet operator SES, questioned whether a ViaSat-3 satellite would find a sufficient market in Asia to justify its investment.
“A terabit-per-second satellite is a great thing. But how much of it is actually sellable?” Mathur said. “What matters is usable capacity. Asia is more fragmented than North America, and there are different markets and regulatory frameworks. ViaSat is operating in a consumer market, we are not. Add up all these components and the business case is a little challenging. The jury is still out about what will come when, and where.”
Geo-orbit satellites and 5G
In a comment that surprised several in the audience, Akao said the Japanese government has expressed concerns that signal latency in a 5G-mobile era could be a serious handicap for geostationary-orbit satellites. He said geostationary satellites might not be in conformance with 5G standards. “We have to solve this problem,” he said.
Nile Suwansiri, chief commercial officer of Thailand’s Thaicom satellite fleet operator — which launched the first HTS satellite, called IPStar, in 2005 — said regulatory access would be a problem for a terabit-per-second satellite.
Thaicom bears the scars of finding out how difficult, and time-consuming, it is to secure consumer broadband landing rights in Asia. The company still has not decided on a successor to IPStar, and it is still refining a business plan for the long-promised Thaicom 9 satellite.
Akao agreed, and said that in addition to landing rights, ViaSat would need to secure an orbital slot and associated frequency rights in the geostationary-orbit arc over Asia, which he said would not be easy.
“If they get a [regulatory] filing from some other operator, they could find a slot but they would need to set up a sales force and so on,” he said.
Several operators said proposed low-orbiting satellite constellations such as LeoSat for corporate connections and OneWeb for consumer and small-business connectivity both will have trouble getting landing rights in India and China.
Huang Baozhong, executive vice president of APT Satellite of Hong Kong, said regulatory issues are a huge obstacle, and even if they are settled there is the matter of the Asian consumer.
“Demand in the underdeveloped world may not be as big as they suppose,” Huang said of a future consumer broadband initiative in Asia.
Aero, maritime: Fool’s gold or major opportunity?
One of the markets seen as attractive for HTS satellites is for mobility applications, mainly aeronautical and maritime.
ABS’s Choi, despite being impressed by the ViaSat-3 model in some respects, said fleet operators are chasing mobility markets “like sheep heading off a cliff.” The real market, he said, was television and consumer broadband in the huge markets of Asia, especially India.
Huang said China is already strewn with fiber connectivity, even in the smaller cities. “It would be difficult to find a market there for a terabit-per-second satellite,” he said.
Thaicom’s Suwansiri agreed, saying commercial airlines and maritime fleets, unlike satellite-television customers, will be able to switch easily to find the least-costly satellite provider, especially in an environment of falling satellite-bandwidth prices. He advised operators seeking entry into these markets to purchase satellite capacity through short-term contracts on the spot market rather than to build their own spacecraft.
Thaicom has nonetheless taken steps to enter the in-flight connectivity market in Asia with partners Hughes Network Systems and Global Eagle Entertainment.