Intelsat Believes Global Presence Could Yield Rich Dividends in Asia
[Satellite Today Web Exclusive – 6-11-08] Intelsat is keen to expand its business in Asia and believes its global presence could give it a competitive advantage over some of the regional satellite players in Asia.
David Ball, Intelsat’s Asia-Pacific regional vice president discusses the operator’s strategy in the region and how it intends to use its global assets to help its position.
Via Satellite: How do you view Intelsat’s strategy in Asia given the level of demand in the region?
Ball: Intelsat is committed to the Asian region for the long term. Both Intelsat and PanAmSat had a very strong legacy in the region. We are very active in both the video and network services side. We have multiple sales offices in the region. We are working locally with customers and provide local support.
We see demand for satellite capacity firming in the region. We do see strong demand for Pacific Ocean C-band. There is strong demand across the Indian Ocean for connectivity plays between Northeast Asia and Africa and for the telecoms sector. Southeast Asia is a very strong video distribution market for us. We have actually quite a lot of capacity there to bring to market. Things are looking up.
Via Satellite: Have the dynamics for fixed satellite services changed in the region?
Ball: We have had the new entrants. We have seen them operating in different areas to us, so we have not been impacted by their entrance into the market. I do see some softening of regulatory stances in the region. China, for us, has been one of the earliest markets we are in Asia. We are very honored to carry China Central Television and China Radio International and take those radio signals globally. We work with ChinaSat and SinoSat, the combined company, to provide service to Chinese entities which is beyond the reach of the Chinese domestic fleet. We are engaged with those operators. We will be heavily engaged with the Beijing 2008 Olympics, to bring that content out into the world. India has been a phenomenally successful market for us. The heavy growth from video services from India, we are lucky to have an excellent neighborhood of content on our Intelsat 10 satellite. It is not only distribution to the cable headends in India but also enables those channels to be received in the Middle East, which is a strong market for South Asia content and also up into Europe for the Indian populations in Europe and the U.S. Our global reach really helps us here. It helps local and international distribution. We also work with ISRO and engage positively with them.
Via Satellite: Do you see consolidation in the region or will operators look to team up in order to boost coverage and offer better solutions to customers?
Ball: I think consolidation in Asia is difficult to achieve because of regulatory and national interests. We believe the major operators such as ourselves can provide a more compelling value to customers in terms of regional, global distribution, different connectivity options, different capacity options and more depth. I think we differentiate ourselves in that sense in the market.
I could see some operators teaming up. I think it is going to be a case on who blinks first in terms of people not wanting to yield on sovereign rights.
Via Satellite: What are Intelsat’s capital expenditure plans for Asia?
Ball: Overall, Intelsat will invest $460 million to $500 million in our fleet this year. In terms of our capital investments to serve Asia, we do have a number of satellite replacements coming up in the cycle. We have a satellite at 66 degrees East. We expect to have a construction contract for that satellite this year. The other satellite is the 180 degrees East satellite. We expect to be moving to contract for a replacement to that satellite this year. That is also a 7 series satellite. Our goal is to understand our customers requirements over the long term and bring capacity to market at the right time to serve those needs.
Via Satellite: How do you view the opportunities for Ka-Band in the region
Ball: I think at the moment we are positioned well in terms of Ku- and C-band globally. We are looking at seeing some trends in Ka-band in North America and Europe. In Asia, I think it will be a while. I think there are some markets here where they are still coming to grips with Ku-band in some of the higher rain zone areas. In Japan and Australia, where you have well-developed Ku-band markets, you may see Ka-band come in where the business case stacks up. I think it is still a little early and that Asia will lag behind Europe and North America on the Ka-band side. It is a little early to understand the dynamics of Ka-band and how that would fit in the market.
Via Satellite: What role will Intelsat play in Asia in the coming years?
Ball: I definitely believe Intelsat will have an enduring presence in Asia. The replacement satellites will bring new capacity and capabilities to the market. We can provide more services to customers. The Intelsat 15 satellite is also coming at 85 degrees East next year. We do see a lot more Ku-band demand. There are some regulatory issues, but there is strong demand. It is a very important region for us. We do a tremendous amount of work in terms of video distribution within the region. I don’t think there will be huge changes in the near term but if there are changes Intelsat will be there with new solutions for our Asian customers.