SES Targeting Strong Performance in Asia

 

Via Satellite: What are SES’s capital expenditure plans as they relate to Asia?

Bednarek: In the fourth quarter this year, we have the launch of NSS-9, which will go to the 183 degrees West orbital location over the Pacific Ocean. That will free up NSS-5, which is potentially deployable to multiple places, including 108 degrees East, where it can provide expansion capacity to NSS-11, which is already serving customers at that location. We are looking at some other orbital locations in the region. In mid-2009, we will be launching NSS-12, which will be located at 57 degrees East. That satellite will have significant incremental capacity pointed at India and the Southeast Asia region.

Via Satellite: How do you assess the prospects for DTH across the region

Bednarek: I think India reflects a model you will see develop in a number of places. This will be for a number of reasons. Firstly, we have a tendency, particularly from an American perspective, to see DTH as a monopoly or duopoly in a huge homogenous market. That is not the case in many other places. There are subregions within India which are huge and on their own have a sufficient population to be addressed by a DTH platform. Across Asia that is the same case. There are definitely subregions within China and even in smaller countries. There is no question that there are many different audiences that can be reached.
    Over the last five to 10 years, a significant change has been the cost of becoming a DTH operator. This has dropped dramatically. You can lease capacity from a number of satellite operators. The uplink and conditional access equipment is readily available. The two principal ingredients for success are: access to programming and some sort of retail distribution channel. It is not an accident that it is the mobile guys in India that are so active in this area, because they have the existing retail sales pipelines where they can add new products such as a DTH receiver. I think the ingredients are present in all of these markets. I think packaging into smaller regionally orientated systems is relatively simple. As I often say, for a few tens of millions of dollars, you have can have a 50 channel bouquet and you don’t need that many subscribers to make money from that.

Via Satellite: How do you see the satellite landscape developing in Asia?

Bednarek: I don’t see any huge realignment of players in the sky. You may see a satellite here or there go into another guy’s fleet. I don’t see a driver on the horizon for a fundamental reordering of the alignment there. You are not going to get private equity firms leveraging their way as they did in the U.S. What worked in the U.S. would not work in Asia. Demand will grow on a country-by-country basis.
    VSAT as well as DTH is growing in India, although there are some regulatory constraints. In China and other markets like Pakistan, the Philippines and Vietnam, the VSAT business is growing, as is the demand for capacity to support the huge growth in mobile telephony, data and related services. There will be uneven demand growth across the region, and how each operator aligns itself for specific markets within the region could affect how you’re positioned to serve other pockets of demand, either technically, politically or otherwise.

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