By Peter J. Brown
In the Asian Pacific region, there are new opportunities for direct-to-home (DTH) service providers and other entrepreneurs. High-definition television (HDTV) is coming to the region slowly, and cellular phone backhauling, Internet protocol (IP) broadband and enterprise sector activities are picking up. Add it all up and one can see why the Asia-Pacific region may be experiencing steady growth in the next few years.
At Thailand-based Shin Satellite Plc, Thaicom 5 will support HDTV broadcast and turnaround services, along with additional DTH channels to the Indochina market at a time when the sub-region is liberalizing, says Paiboon Panuwattanawong, managing director at IPStar, Shin's new broadband startup. "We foresee more demand for DTH broadcasting in Thailand whenever the regulatory authority is able to issue licenses," Panuwattanawong says. According to Panuwattanawong, Shin still sees a lot of opportunity in its conventional video services business as new markets start to open up. "We are well known in the region and in some markets, like Pakistan, we are the number one supplier of transponders. As the industry returns to a cycle of growth this year, we are seeing demand for video services growth," Panuwattanawong says.
Shin Satellite's parent company, Shin Corp., now is owned by Singapore-based Temasek Holdings, which is the investment arm of the Singapore government. Temasek Holdings also owns a 63 percent stake in Australia-based Singtel Optus, which has been providing IP over satellite services for the past six years. It has developed a whole range of applications including broadband Internet access and tailor-made IP solutions for corporate and government customers.
On the heels of the Singtel / Optus deal in particular, the recent moves by the government of Singapore strongly suggest that Singapore is betting with more enthusiasm on the role of satellite in the region.
"Singtel's purchase of Optus can be considered as a safe bet since most of the transponders on the Optus fleet were at high fill rates that were serving mostly the Australian market. With Shin Satellite, specifically with the iPStar asset, this bet is a little riskier since the value proposition and the brief market performance of the iPStar satellite is still undetermined in terms of success rate," says del Rosario. "Temasek Holdings' move definitely is a huge bet that iPStar will be a success regionwide since the Thai market is rather limited for the kind of ambitious program that iPStar was developed for."
Optus Satellite's two new Ku-band D Series satellites are designed to provide Fixed Satellite Services (FSS) and DTH services to Australia and New Zealand. By co-locating Optus D2, which will go up in 2007 with C1 at Australia's hotbird location at 156 degrees East, the available DTH capacity will double, according to Paul Sheridan, acting director at Optus Satellite.
"Certainly Asia will be quite busy with DTH platform services in the near future. Also, HDTV broadcasting brings extra demand for bandwidth capacity as even incumbent players will require more bandwidth," says Eui Koh, president of the Asia-Pacific Satellite Communications Council. "Entirely new markets are emerging in China, Pakistan and Vietnam. Although China already has DTH platform services, it plans to have a full blown DTH platform for the 2008 Olympics including HDTV programming broadcasting on the platform."
Koh sees a strong demand for satellite capacity in the next few years in India, Indonesia and Pakistan, where poor existing terrestrial backhaul trunking cannot support the projected exponential growth in mobile subscription services.
According to Jose del Rosario, senior analyst and regional director for the Asia Pacific region at Northern Sky Research, China and India remain the big markets to target. "In terms of applications, video for contribution and distribution remain the bread-and-butter of the industry, so strategies will remain focused on this key area," says del Rosario. "Other areas where risk-taking has begun include IPTV, broadband provisioning, government and, to some extent, mobile services, although there has been no definitive historical trend to suggest that these services are clear winners."
Seah Moon Ming, deputy CEO of ST Engineering and president of ST Electronics in Singapore, describes the competition in Asia is as challenging as anywhere in the world. The Agilis and iDirect brands comprise the ST Electronics' satellite business group, which focuses on developing next generation IP over satellite networking solutions that can support services comparable in price and quality to traditional landline networks.
Temasek Holdings also owns a 55 percent stake in ST Engineering, the parent company of ST Electronics.
"End customers expect quality on par with landline networks, service providers put a high priority on network efficiency and performance, and technology providers and manufacturers clearly understand the value of this market and are competing very aggressively for it," says Seah.