Asia Broadcast Satellite (ABS) is one of the new breed of dynamic players on the Asian satellite landscape. Interestingly though, the operator generates less than 10 percent of its overall revenues within the Asia-Pacific region.
The most recent deal for ABS may underline that ratio, as the operator signed a long-term, multiple transponder deal with GT Satellite Systems (GTSS) of Russia, as ABS views Eastern Europe as a big potential growth market. Under the agreement, ABS will provide GTSS with expansion capacity on the new ABS-2 satellite, which scheduled to be launched in 2012. As part of the multi-year contract, GTSS also will expand its capacity on ABS-1 by leasing Ku-band transponders on the ABS-2 Russia/CIS beam for further expansion of TV distribution services.
ABS CEO Tom Choi discussed revenue streams outside of Asia as well as capital expenditure plans in light of the company’s ABS-2 and Koreasat moves.
VIA SATELLITE: What percent of revenues do you derive from Eastern Europe and what percentage of your revenues do you currently derive from Asia?
Choi: In terms of Eastern Europe, we currently derive less than 15 percent, but we see that figure growing more to around 30 percent in the future. In terms of Asia, we derive less than 7 percent of our overall revenues. This percentage will probably increase when the ABS-2 satellite launches.
VIA SATELLITE: Is the company repositioning itself away from Asia?
Choi: We are in the Indian Ocean. Our capacity pretty much serves the landmass of the Eastern Hemisphere. So being a commercial entity, we will go where the customers are, and in particular where they can afford a quality service. I think the emerging markets outside of Asia have more capacity constraints and demand will grow. Naturally strong customer demand and capacity constraints will lead to higher prices per transponder.
In Asia, although the pricing pressure today is lot less than in the past, we still have a lot more competition, which naturally drives the capacity prices lower. Regardless we still greatly value Asia for all of its significant markets and still hope to be a major player in the region with ABS-1 and ABS-2. ABS-2 will have dedicated C- and Ku-band beams tailored for Asian countries.
VIA SATELLITE: When can we expect to hear about ABS-3 and ABS-4?
Choi: We have made some filings in Asia and we have discovered a couple of filings over the Atlantic Ocean Region, where we are interested in expanding our business. Coupled with the increase of our backlog and the completion of the Export Credit Agency financing for ABS-2, we may announce another project, ABS-3, which will be a C-/Ku-band satellite in the Atlantic Ocean Region next year. We have already identified an anchor customer already for this program. We may also do another project over the Pacific Ocean Region, but we are not sure yet as we would need to achieve coordination for some of our filings. Needless to say, our focus right now is to complete the Export Credit Agency financing process right now with [export-import bank and Coface as well as building up our backlog for ABS-2. Once that is completed, we will firm up our plans for additional expansion.
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