ABS CEO Discusses Expansion Strategy - Page 1 of 2

[Satellite Today Web Exclusive – 6-9-08] Asia Broadcast Satellite (ABS) is one of the new breed of satellite operators trying to make an impact in Asia. The company, founded less than two years ago, was established to meet the growing demands of broadcast and telecoms operators in the Indian Ocean region. CEO of ABS, Tom Choi, talks about the operator’s growth plans and how the new satellites it is planning will enable it to become more of a force across the region.

Via Satellite: What demands do you see for satellite capacity in Asia?

Choi: The demand for satellite capacity in Asia is currently being driven by growth in cellular trunking, VSAT and local cable TV distribution channels. Currently a lot of C-band capacity in the Asia-Pacific is being used for IP-transit, point-to-point backbone services, but this segment of the market is diminishing in both profitability as well as volume. From the 75 degree East position, we see a lot more of the world than only Asia and Asia remains our smallest market. However, we are bullish in the growth of [cable TV] distribution and cellular backhaul as well as the emergence of low-cost Ku-band VSAT terminals for affordable rural connectivity services.

Via Satellite: Do you expect transponder prices in the region to remain depressed?

Choi: The Asia-Pacific region will continue to suffer from pricing pressure due to the continual investments in satellite capacity by new national and commercial operators. The emergence of the newly merged Chinese satellite operator (composed of the merger between SinoSat and ChinaSat) along with their new satellites has resulted in a loss of capacity to both AsiaSat and APT Telecommunications. Both Indonesian satellite operators will be launching new and larger satellites in the next three years. They will be both adding significant amount of Ku-band capacity over Southeast Asia. Protostar will be launching two satellites in 2008 and 2009, and VinaSat just successfully launched their new satellite VinaSat-1. ABS commercialized the sales and marketing of our satellite ABS-1 in [the 2006 fourth quarter], and we will be launching a 60-plus transponder satellite in 2010 as well. Ku-band over China and C-band over Asia will continue to be under pricing pressure for many years to come.

Via Satellite: How important is it to be at the cutting edge when bringing new satellites to the region?

Choi: Not including the markets of India, Russia, China and Japan, the investments in AsiaSat-5, VinaSat-1, Intelsat-15, MeaSat-3A, ST-2, Protostar 1 and 2, Telstar-10R, Palapa-D and Telkom-3 as well as ABS-2, will represent over $2.2 billion of new satellite hardware being launched into geostationary stationary orbit over the Asia-Pacific region in the next three years. Fortunately for ABS, we will not have to compete with all of these satellites, as ABS-2 will be serving markets in capacity-constrained markets of the Middle East, Eastern Europe and Africa as well as Asia Pacific. Almost all of the newly planned satellites including ABS-2 will use traditional transponder bent-pipe technologies. I don’t believe that we will see any new investments in cutting-edge technology such as IPStar in the near future. Cutting-edge technology investments sometimes tend to cut both sides.