‘Winter is Coming’ for Asian Satellite Operators as Capacity Outpaces Demand

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SINGAPORE — Asian satellite fleet operators spent much of the first half of the CASBAA Satellite Industry Forum June 1 worrying about a growing overcapacity in their region and, despite this, the seeming impossibility of industry consolidation.

During the Cable and Satellite Broadcasting Association of Asia forum’s second half, the deputy telecommunications minister from Myanmar said his government would launch its first telecommunications satellite within five years.

“Myanmar is one of the few countries in the world not to own a satellite,” U Thaung Tin said. “There is a national desire for a satellite, which we would like to see in orbit as soon as possible.”

Huang Baozhong
“Demand is not keeping up with expectations — not from HDTV and not from conventional telecom,” said Huang Baozhong, executive vice president of Hong Kong-based APT Satellite. Credit: APSCC

So it goes in the Asia-Pacific region, where there are so many satellites from so many owners, many of them viewed as national flag carriers, that a government minister may be forgiven for thinking his nation is lagging the rest of the world without its own.

“The [satellite] operators’ winter is coming,” said Huang Baozhong, executive vice president of Hong Kong-based APT Satellite. “Demand is not keeping up with expectations — not from HDTV and not from conventional telecom. How to spend the winter is the question.”

Mitsutoshi Akao, executive officer for the space and satellite business group at Japan’s Sky Perfect JSat fleet operator, said that while Japan is moving faster than most nations to adopt ultra-high-definition television, a blessing for fleet operators because it uses more satellite bandwidth, the Japanese market is nonetheless reaching saturation.

Akao said JSat, which he said had been slow to adapt to the evolution of the market, was now targeting opportunities in Myanmar, the Philippines and Indonesia to compensate for what may be a plateau in Japanese demand.

William Wade, chief executive of AsiaSat of Hong Kong, said new market entrants already have had an effect on pricing and orbital-slot crowding and a related increase in signal interference issues.

Mitsutoshi Akao
Mitsutoshi Akao, executive officer for the space and satellite business group at Japan’s Sky Perfect JSat fleet operator, said that while Japan is moving faster than most nations to adopt ultra-high-definition television, the Japanese market is nonetheless reaching saturation. Credit: APSCC

“We are seeing unsustainable market conditions,” Wade said.

It was not just the Asian operators, whose business stresses may just be the beginning of a more-global oversupply, especially as high-throughput satellites (HTS) prepare to add massive new capacity in multiple regions.

Stephen Spengler, chief executive of Intelsat of Luxembourg and Washington, whose 50-satellite fleet operates worldwide, said the “supply/demand imbalance is a looming threat for the entire industry when we look at the supply coming into the market in wide-beam and HTS satellites.”

Pointing to market surveys showing that most of these multigigabit-per-second-throughput satellites will be far less than half full in 2019, Spengler said “there is a real gap” between the bandwidth being launched and the relatively slow-growing aggregate demand.

Spengler said the industry will have to enter broader markets such as the Internet of Things, including vehicles and goods, to maintain growth.

Another way to stimulate growth, he said, is for the satellite sector to adopt open standards to permit ground hardware providers to enter volume production and reduce costs.