Philip Father, CEO, ProtoStar - Page 1 of 3

ProtoStar hopes to make an impact in the promising DTH markets in Asia by providing capacity aboard its ProtoStar 1 satellite.
The spacecraft, placed in orbit in July, carries 16 Ku-band and 38 C-band transponders that allows DTH operators to provide services without purchasing their own satellite.
ProtoStar CEO Philip Father discusses orbital location issues, the business opportunity for ProtoStar and the company’s capital expenditure plans for future satellites.

VIA SATELLITE: How much capacity did you have sold at launch, and when do you expect to fill up the satellite?

FATHER: We had pre-sold a significant amount of capacity at launch with anchor customers such as DishTV/Agrani, PlanetSky and SingTel. We have also sold a significant amount of capacity since the launch. In terms of reaching industry metrics of 60 percent to 70 percent utilization, we will reach that in 18 to 30 months. We have launched into a market where there is a supply-and-demand imbalance. As a result, we will get there in a fairly quick time frame.

VIA SATELLITE: There are a number of operators already present in Asia, and cheap capacity has been an issue in that market in recent years. Why do you think ProtoStar can be successful in this market?

FATHER: I think you have to take a look at our customer focus, which is the DTH market. As a result, part of our success is in not having legacy systems. Much of the capacity launched in Asia in the mid-1990s was prior to the DTH market opening up from a regulatory perspective. As a result, much of the satellite capacity that has been over Asia has been more geared to corporate networks, cable headends, VSAT, etc. It is not necessarily the high-powered Ku-band capacity required in large blocks by DTH operators. Granted, there is some high-powered Ku-band capacity in the market but not necessarily in blocks sizeable enough to allow the DTH operator to grow to 200 to 300 channels.

VIA SATELLITE: When do you expect ProtoStar to become profitable?

FATHER: We should be profitable relatively soon. That is just a consequence of hitting certain capacity utilization hurdles. We think we can do that in the next year or two.

VIA SATELLITE: There are concerns that ProtoStar’s C-band capacity could interfere with the operations of spacecraft located near your orbital slot at 98.5 degrees East, especially from AsiaSat. How do you respond to some of AsiaSat’s concerns?

FATHER: At the highest order, ProtoStar has always conducted itself to ITU (International Telecommunication Union) principles and guidelines. However, some of our competitors have been quick to point to the contrary in other ways that are simply not true. In October, the ITU distributed a circular saying that we are in a good standing and that ProtoStar is being a good citizen. I think that vindicates some of the falsehoods that have been out there, which have been purely driven by anti-competitive motivations.

In situations like this, the customer always loses. No one grows top line revenue when there is anti-competitive behavior amongst the operators. Our point of view is that if we saw a higher degree of cooperation across Asia, you would actually grow the overall market pie and then there would be more for everyone. It is the customers that we are all supposed to be serving. I contrast AsiaSat’s statements, which are really targeted to intimidate ProtoStar’s customers, versus a spirit of cooperation that we have been able to craft with PLDT and Mabuhay, where we are working closely to the benefit of our joint customers.