SES Targeting Strong Performance in Asia

 

Via Satellite: Do you see consolidation among operators in the region?

Bednarek: For a long time now, everyone has been predicting consolidation in Asia. It is a highly fragmented market. If you look at the pie charts with the number of operators in the world, you have the majority of the operators located in Asia. It is not just about economic dynamics at work. There are many instances of legacy government ownership — both direct and indirect. There are many national/domestic systems. There are also application-specific satellites that were built for one particular use or geography. The strict economic rules for investment in these systems do not always apply. I don’t think we will see any time soon a sudden consolidation like that we have seen in the U.S.
    In terms of economic viability, it depends on how you define it. Some systems are sustained by government, some of them are capitalized originally and then left to their own devices. Viability is in the eye of the beholder. If you look at straight economic return on investment, and ask if everyone is viable, no, I don’t think so. Return on investment is not the only metric in use.

Via Satellite: Have the dynamics for fixed satellite services changed in the region?

Bednarek: I think the profile of the market in general has changed, but again there are pretty wide regional variations. In general, there are more sources of demand than before. Satellite demand is pretty well-correlated to economic development. As you have the broadening of economic development across the region, you have the broadening of demand. It is in the enterprise sector, the telecoms sector, the cellular backhaul sector, DTH, video distribution, etc. There has been some loosening of the restrictions, and when that demand shows up there are more options for you to try and satisfy that demand. You don’t always have to use the national system any more. It is now more likely that you can use other national systems or the international operators. I do think there is some positive progress in that, but there are still a lot of regulatory legacies. China’s demand is growing, but it is pretty clear that the domestic Chinese operators are positioning themselves to carry as much of that as possible, particularly on the video side. The basic trend is positive.

Via Satellite: How do you view the opportunities for Ka-Band in the region?

Bednarek: I think the future is bright. To me, Ka-band is another piece of spectrum. It has its positives and it has its negatives — propagation being the negative [and] the ability to make smaller tighter beams a positive because you can have higher frequency reuse. There are some applications that are naturally suited for it. Two-way broadband is one such application. I think you will see the growth of Ka-band, principally as operators run out of Ku-band capacity, and in particular, the standard Ku-band capacity. So you can consume what you have first, and then you drive towards Ka-band. You are really seeing that come to fruition in Europe, where there is not much Ku-band around. I do believe you will see that in Asia as well.

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