Shinji Takada President, SKY Perfect JSAT

Japanese satellite operator, SKY Perfect JSAT faced a true test in March 2011 when the nation was hit with a catastrophic earthquake. Shinji Takada, president, SKY Perfect JSAT, talks about the challenges the operator faced when dealing with this disaster, as well as the operator’s 2012 growth plans and strategy to develop its presence in markets outside of Asia.

VIA SATELLITE: What role did satellite play in the aftermath of the earthquake that hit Japan earlier this year? What part did SKY Perfect JSAT have in providing communications?

Takada: The earthquake of East Japan has had a profound impact to our recognition of space and the satellite business. In the area of disaster, our satellite network has proven its resilience and robustness against catastrophe. With more than 7,000 transmission sites pointing to our satellite throughout Japan, almost all of them continued to operate flawlessly. A calamity of such magnitude caused about 10 of these Tx / Rx VSAT terminals to fail. Most were physically swept away or damaged by the tsunami together with its building. The rest of them survived and continued to operate.

With the strength of the satellite network, SKY Perfect JSAT played a significant role in the response of the surging demand for business continuity plans or disaster-prevention measures. During the response and recovery phase, more than 500 MHz of additional bandwidth was provided through the Japanese Ku-band beam.

We supported disaster recovery efforts following the earthquake by prioritizing the allocation of satellite transponders to the Ministry of Defense, National Police Agency and other government and public-sector institutions that conduct disaster relief activities. We also provided satellite connection services for TV media and news agencies. In addition, [Inmarsat’s] IsatPhone handheld satellite handsets provided by our subsidiary company played an important role in emergency communications.

The company played a large role in communication during and after the disaster. People were accessing the Internet through our satellite connections in local headquarters and evacuation centers. Mobile and fixed common carriers used satellite communications for replacement of their damaged networks and public utilities such as railroad companies and electric power companies became our customers. Railway operators employ satellite connections to minimize the impact of land-based disasters by transmitting early warnings and other information from earthquake detectors to moving trains.

VIA SATELLITE: What is SKY Perfect JSAT’s plan to invest in new satellites?

Takada: We have a plan to launch JCSAT-13, which is a successor of JCSAT-4A, in the first quarter of 2012. This satellite is equipped with beams to cover the Asia and Oceania region.

We expect the transponder demands in the Asia and Oceania region to grow in the future, but assume that some of the areas will continue to have a lack of terrestrial networks due to their large landmasses and scattered islands. Consequently, satellite will continue to play a strong role in the fields of Internet services, communications involving gas and oil exploration, mobile backhaul and government use. We also view that broadcasting, including DTH, in South East Asia, particularly in Indonesia, will rapidly grow due to the rising population, large landmasses and increasing GDP per capita. JCSAT-13 is equipped with Ku-band transponders focused on Indonesia and other South East Asian countries, which is aimed to satisfy the demands in those countries.

VIA SATELLITE: What major growth drivers do you see for your business in the next two years?

Takada: In the multichannel pay-TV business, we expect SKY PerfecTV e2 will acquire a large number of subscribers since our new Broadcast Satellite (BS) broadcasting services covers 13 million households with traditional BS antennas in addition to the existing 9 million households market with BS/Communication Satellite antennas. Moreover, a shift of subscription from SD channels to HD channels will increase the ARPU of our SKY PerfecTV service.

In the space and satellite business, we expect to increase revenues from global communications including from the Asia and Oceania region, as well as the domestic communications business reflecting increasing demand for disaster-prevention of local governments and business continuity plans of many companies. We also expect new public-private collaborate projects based on the hosted payloads framework that are beginning under the Japanese government’s Basic Plan for Space Policy.

VIA SATELLITE: Have you identified any strong opportunities in the MSS market?

Takada: There are great MSS opportunities, particularly with maritime applications for our organization. Japan is a country surrounded by oceans and there are more than 1,700 Japanese cargo vessels crossing between Japan and abroad daily. Most of the cargo vessels are unequipped with broadband service, thus we consider this a huge untapped market for the MSS broadband services. We have been providing maritime Internet access service for vessels in the name of the “Ocean BB” since April 2010 to respond to the demand. Until now, we have provided the service to liquefied natural gas carriers, container vessels, bulk vessels, car carriers, etc. We expect that our MSS opportunity with maritime applications will continue to grow.

VIA SATELLITE: How do you view the growth prospects for pay-TV in Japan?

Takada: We expect that the new BS broadcasting service and channels will increase the potential market of pay-TV from 9 million to 22 million households. We also plan to complete the transfer of SKY PerfecTV HD service from MPEG2 to h.264 or MPEG4/AVC based compression technology by the end of 2014. We will have more than 120 HD channels by October 2012.

VIA SATELLITE: What impact will Over-The-Top (OTT) television have in Japan?

Takada: SKY Perfect is providing content via the Internet and through VOD. However we do not think this will be a major style of viewing, but a supplemental viewing style of our subscribers who want to watch our content out of their home. In other words, OTT is not a threat but an opportunity to enrich the viewing experience of subscribers.

VIA SATELLITE: What are the company’s international expansion goals for the new year?

Takada: We will increase the percentage of international revenues in the space and satellite business by increasing global telecommunications services and participating in international projects using satellite. Currently, we are considering reinforcing the necessary resources in our organization to emphasize our international business. This reinforcement involves the internationalization of our employment, putting our sales forces closer to our customers in Asia, preparing an efficient monitoring system for our Asian customers, etc. We consider JCSAT-13 to be a key trigger to achieve our international aspiration to increase our presence for our Asian customers.

We also see that the global satellite landscape is changing as emerging countries like Brazil, Russia, India and China are having more presence in the international satellite arena. For the past few years, apart from the three mega-players, Intelsat, SES and Eutelsat, the operators from Brazil, Russia, India and China are thriving based on the growing market in their countries. We foresee that those players will continue to have a huge impact on the landscape of the satellite market. It is important to position ourselves so that we can gain growth in these emerging markets. In this regard, we are required to look at opportunities globally rather than regionally. This could be sometimes difficult for us since the history or background of each operator is different. However, by expanding our network and cooperating with partners, we will be enhancing our capability beyond our region.