While the Asia-Pacific region offers satellite operators multiple markets and strong business opportunities, a number of regional operators are beginning to look outside of their home markets to drive revenue growth in the future.
Measat Satellite Systems, based in Kuala Lumpur, Malaysia, is one of the new breed of Asia-Pacific operators no longer content in serving only local markets. “We are not taking our focus off Asia but are using our Asian business as a stepping stone into a wider geographical market. While Asia will remain our core market, we are developing more into an emerging market operator. We want the company to be more of a global player than an Asian player,” says Paul Brown-Kenyon, COO of Measat. Measat has the ability and desire to expand its reach, says Brown-Kenyon. “Measat has the rights to develop a number of orbital slots around the world. Over time we are looking to develop these. Our approach to date has been pragmatic. We are building our business piece by piece. Initially, our focus was on Southeast Asia with our Measat-1 and Measat-2 satellites. Once they became established, we looked at a wider Asian footprint with Measat-3 and Measat-3a. In addition to seeking to expand our Asian fleet, we are now looking outside of Asia at Africa,” he says.
Measat is one of a number of international operators targeting Africa,where it “is easier” for new operators to get a foothold, says Brown-Kenyon. “I think there is strong demand in Africa and Middle East. The market in this region is less established than Asia and it can support the entry of new operators such as ourselves,” he says. The operator is hoping to partner with others to better serve the African market. “We have engaged in a number of discussions with potential partners over the development of new satellites for the African region. We expect to be able to announce the first of these ventures in the near future. Given that the African satellite communications market at this time is at an earlier stage of development, our marketing strategy is more broad based. As the market develops, we will take a much more segment specific approach, as we have done in Asia,” he says. Brown-Kenyon expects Measat’s business to remain predominantly in Asia, with about 30 percent of the company’s revenues coming from outside the region in three to five years.
While Measat still drives most of its revenues from Asia, the same cannot be said for Asia Broadcast Satellite (ABS), which already derives the majority of its revenues from outside Asia. “Before the Mabuhay acquisition (in November), the percentage of revenues coming from Asia was less than 8 percent. With the launch of ABS-2, we expect the revenues to be around 20 percent with the remaining revenues generated outside Asia,” says ABS CEO Tom Choi. After the acquisition of the initial ABS-1 satellite, ABS saw higher demand for capacity outside of Asia, he says. “When we made the investment for ABS-1 and bought the satellite from Lockheed Martin International, we knew we had to serve Asia as well as the other markets such as Eastern Europe, the Middle East and Africa. When we started to market the capacity, we had much higher interest in the capacity from those markets. As a result of customer demand, this is where we are looking to grow. Customer diversification is key to our future growth. It turned out that the demand for capacity was much greater in non-Asian territories,” he says.
ABS also serves a number of Asian-based customers that use the capacity for business in other parts of the globe. “We do have a lot of Asian customers who buy capacity in those other markets. We have clients such as PCCW and Singapore Telecom who are based in Asia but use our capacity to serve the Middle East and African markets. Additionally, we also have African customers use our capacity to service customers in their domestic markets,” says Choi, who hints at greater revenue generation opportunities outside of the Asia-Pacific region. “Today, we see many operators in Asia with a lot of capacity, and due to the oversupply of capacity in Asia, we see low prices. In markets which are more consolidated, however, such as in Eastern Europe, the Middle East and Africa, you have a combination of a smaller number of satellite operators and a growth in demand for capacity, resulting in higher transponder yields. Unless the growth rate in Asia catches up with the supply in Asia, we are not going to see high fill rates or strong capacity prices. In other markets, supply is outstripping demand, resulting in higher prices,” he says.