AsiaSat Confident in Asian Market Despite Increased Competition

Bill Wade, president and CEO of AsiaSat. Photo: AsiaSat

[Via Satellite 06-23-2015] With a new shareholder, two fresh satellites in orbit, and a near-metamorphic rebranding, to call AsiaSat busy would be an understatement. Over the past year, the Hong Kong-based satellite operator has been adding capacity, sizing up new markets, and laying the groundwork for the rise of Ultra-HD.

Speaking to Via Satellite, AsiaSat President and CEO William Wade said the company’s rebranding went deeper than just a new logo and website.

“We have changed our philosophy, our internal culture and ultimately our way of doing things,” he said.

Additionally, AsiaSat’s new shareholder, Carlyle Asia Partners 4, recently replaced General Electric. Carlyle Asia Partners 4 joins the company at a dynamic time. Asia has become the focus of many satellite operators as a top growth market and emerging national players are looking to add satellites of their own. This shift makes Asia a much more competitive environment.

“The developing Asian markets have become the focus of many satellite operators. In addition, capacity from new national operators has increased supply in some Asian regions. Coupled with continued technology advances in modulation and compression and the increased competition from fiber, we see excessive supply in the satellite market. However, on the longer term, there are still a lot of opportunities for growth in Asia, particularly in some emerging markets where communications infrastructure still lags behind much of the developed world,” said Wade.

Last year AsiaSat launched two new satellites, AsiaSat 8 and AsiaSat 6, aboard SpaceX Falcon 9 rockets in August and September, respectively. AsiaSat 8 is collocated with AsiaSat 7 at 105.5 degrees east and carries 24 Ku-band transponders as well as a Ka-band payload. AsiaSat 6, located at 120 degrees east, supports 28 C-band transponders. Space Systems Loral (SSL) built both satellites. Wade highlighted the capacity AsiaSat 6 is providing for the Greater China market, and AsiaSat 8’s reach across South Asia, South East Asia, and the Middle East. He said the market has been particularly responsive when it comes to Direct-to-Home (DTH) and video services.

The number of DTH pay-TV subscribers in Asia Pacific grew by 9 percent in 2014, cresting 61 million, according to recent report from Media Partners Asia (MPA). Industry revenue also grew 5 percent, passing $9 billion, according to a June 2 press release from the research firm. MPA expects revenue from the total Asia-Pacific DTH industry pay-TV sector to reach $12.5 billion by 2019 at a Calculated Annual Growth Rate (CAGR) of 7 percent, further climbing to approximately $15 billion by 2023. DTH’s share of total pay-TV subscribers in Asia Pacific is ultimately expected to grow from 12 percent to 22 percent over the next 10 years, according to the firm.

A significant fraction of the world’s fastest growing economies are located in Asia. Several of these nations also rank among the most populous. These, Wade said, present opportunity for AsiaSat.

“India is the world’s largest DTH market and is continuing to grow with operators looking to increase their market share by adding more services such as HD. We believe these moves will boost the demand for satellite capacity,” he explained. “China will also show growth in communications services. We see operators aggressively expanding and upgrading their broadband and mobile networks and increasing the deployment of satellite to complement their existing telecommunications infrastructure. Indonesia is also a country where we see great potential in view of its relatively low pay TV penetration and unique geography.”

This market potential gives AsiaSat confidence that, despite some oversupply, the market will respond healthily to additional satellite capacity.

“With AsiaSat 9 on track for launch in late 2016 or early 2017, we are definitely planning for additional satellites. We have some of Asia’s very best coordinated orbital slots, and we are looking at possibly adding capacity to one of these existing slots,” he said.

A different challenge, VSAT interference, will likely take longer to alleviate.

Aging, dilapidated equipment remains widely in use throughout Asia, and people’s privacy concerns, realistic or not, challenge the acceptance of modernized equipment. Furthermore, network operators and users would often rather save cost by continuing with dated equipment for as long as possible. Wade said this situation has not improved much in the last year.

“As for Carrier ID, there is no system in place to motivate uplinkers to use the equipment and prevent their customer information being leaked to others. I don’t think the push for Carrier ID is gaining much momentum in Asia,” he said.

Regarding services, Wade anticipates greater demand coming from broadband and mobility applications in the near future. In the more distant future, he expects consumer demand for greater video quality will mature the Ultra-HD ecosystem. Wade noted that most parts of Asia are in the midst of upgrading from SD to HD, but added that Ultra-HD is already a hot topic. Sales of 4K televisions in Asia lead the world, however there is still a lack of content available. AsiaSat participated in broadcasting the 2014 FIFA World Cup in 4K, and last year established an Ultra-HD research laboratory at its Tai Po Earth station. The operator plans to launch a Free-to-Air (FTA) Ultra-HD platform based on Digital Video Broadcast-Satellite Second Generation (DVB-S2) and High Efficiency Video Coding (HEVC) solutions on one of its satellites in coming months. AsiaSat expects the channel to further the Ultra-HD momentum.

“We anticipate continuing to play a key role in Ultra-HD content delivery for upcoming major sports events such as the 2016 Rio Olympic Games and the 2018 FIFA World Cup. Although still very early, it is important to keep ourselves in the forefront of this new broadcast technology,” said Wade.