ABS CEO Sets Out Long-Term Capital Expenditure Vision
By Mark Holmes | March 12, 2009
Asia Broadcast Satellite (ABS) hopes to launch its ABS-2 satellite in 2011, and CEO Tom Choi expects that within the next 12 months, the operator will have made an announcement about a new satellite – ABS 3.
“We hope in the next five years, we will have four satellites in orbit, so we are even looking beyond ABS-3 and thinking about ABS-4 as well,” Choi told CABSAT E-Daily. “… We will initially sell 15 percent to 20 percent of the capacity (on ABS-2) to our existing customers this year. This capacity will be available at a discount to today’s prices. We want to reward our existing customers that have been with us. Next year, we will release another 15 percent to 20 percent of the capacity, probably at the same rate we are offering today. Just prior to launch, we will offer another 20 percent of the capacity at the then prevailing market rates which we anticipate will be even higher than today. We want to keep some of the capacity back for sale after the ABS-2 launch. As we can easily make debt repayment levels with the minimum fill rates on ABS-2, we are not under pressure to sell all the capacity prior to the launch of ABS-2.”
There was much talk at CABSAT of a lack of capacity in the Middle East, however, with many new satellites set to launch, the situation is set to dramatically change over the next few years. “There is going to be a lot of capacity coming into the region, but at the same time a lot of satellites are reaching their end of life also in the region as well. Although there is new capacity coming in, I believe we will be in a capacity constrained environment,” he said.
Choi is optimistic that ABS can take advantage of the current economic situation to gain access to orbital slots. “We are constantly looking at the possibilities for new orbital locations,” he said. “We think the current financial environment is going to slow down a number of satellite operators a lot in terms of their expansion plans. There are many operators with heavy debt loads that may not be able to get loans for new replacement satellites as well. That will enable us to maybe gain access to abandoned orbital slots or customers whom they cannot serve.”
The company was a noticeable Asian presence at the trade show, as other well-known Asian operators such as Measat, ProtoStar, and AsiaSat did not have a visible presence at the show. “Over 75 percent of our overall revenues are generated from the Middle East and Africa region. We have an Indian Ocean region satellite, so it covers a number of growth areas. The Middle East and Africa are strong growth areas. Our satellite is stationed much further West than some of our competitors in Asia, which gives us a better ability to serve the region.”
“We hope in the next five years, we will have four satellites in orbit, so we are even looking beyond ABS-3 and thinking about ABS-4 as well,” Choi told CABSAT E-Daily. “… We will initially sell 15 percent to 20 percent of the capacity (on ABS-2) to our existing customers this year. This capacity will be available at a discount to today’s prices. We want to reward our existing customers that have been with us. Next year, we will release another 15 percent to 20 percent of the capacity, probably at the same rate we are offering today. Just prior to launch, we will offer another 20 percent of the capacity at the then prevailing market rates which we anticipate will be even higher than today. We want to keep some of the capacity back for sale after the ABS-2 launch. As we can easily make debt repayment levels with the minimum fill rates on ABS-2, we are not under pressure to sell all the capacity prior to the launch of ABS-2.”
There was much talk at CABSAT of a lack of capacity in the Middle East, however, with many new satellites set to launch, the situation is set to dramatically change over the next few years. “There is going to be a lot of capacity coming into the region, but at the same time a lot of satellites are reaching their end of life also in the region as well. Although there is new capacity coming in, I believe we will be in a capacity constrained environment,” he said.
Choi is optimistic that ABS can take advantage of the current economic situation to gain access to orbital slots. “We are constantly looking at the possibilities for new orbital locations,” he said. “We think the current financial environment is going to slow down a number of satellite operators a lot in terms of their expansion plans. There are many operators with heavy debt loads that may not be able to get loans for new replacement satellites as well. That will enable us to maybe gain access to abandoned orbital slots or customers whom they cannot serve.”
The company was a noticeable Asian presence at the trade show, as other well-known Asian operators such as Measat, ProtoStar, and AsiaSat did not have a visible presence at the show. “Over 75 percent of our overall revenues are generated from the Middle East and Africa region. We have an Indian Ocean region satellite, so it covers a number of growth areas. The Middle East and Africa are strong growth areas. Our satellite is stationed much further West than some of our competitors in Asia, which gives us a better ability to serve the region.”