[Satellite News 11-29-11] Asia Broadcast Satellite (ABS) hopes to have sold up to 80 percent of the capacity on its ABS-2 satellite prior to launch. The launch of the satellite, which is set to take place in 2013, could mark a key turning point for the company and the operator has aggressive pre-sales targets for capacity. Richard Pak, Chief Development Officer, ABS, told Satellite News, “We have already secured three very reputable, solid anchor partners on ABS-2 with Korea Telecom, Singapore Telecom and now GTSS. We have also received commitments from new and existing customers on ABS-1 to take expansion capacity on ABS-2. Over the next 12 months, we anticipate that we will have between 70 percent to 80 percent of the capacity on ABS-2 sold prior to launch.”

       ABS-2 is a big Ku/Ka/C-band satellite being built by Space Systems/Loral (SS/L). The company is optimistic that it can find a market for Ka-band capacity. Pak says, “The introduction of Ka-band capacity is going to spur growth because the service prices will be driven lower by the abundance of bandwidth delivered via Ka-band satellites. Ka-band in the Middle East and Africa offers a unique value proposition. With high demand, affordable equipment (smaller dishes) and the relatively low penetration of terrestrial infrastructure in these regions, we remain optimistic for the future prospect of Ka-band.”

       The company’s ABS-3 satellite will be operational next month, and provide 54 C- and Ku-band transponders specifically looking to address what ABS sees as unmet demand in Africa. “New submarine cables are being laid along the East Coast of Africa; however the fiber connectivity from coast to inland continues to be a challenge. There are infrastructure bottlenecks and many African countries continue to be plagued with sabotage activities that further hamper connectivity to the rural areas,” says Pak. “As a result, there is a demand for satellite based connectivity for fiber extension as well as for building Internet backbone closer to rural areas or smaller communities. We see a strong demand for capacity on ABS-3 and expect it will be predominantly leased out.”

       However, while Africa is a major target for the company, it could still be a tough market for the operator to crack, particularly as a lot of new capacity has come online. “We do see some price softening in some of the African markets where we are starting to see an abundance of satellite capacity coming online as well as the expansion of fiber connectivity, however, we believe that the increase in available capacity will spawn additional services and applications which will demand more bandwidth. Access to affordable and reliable capacity is key for the overall development of the African countries, benefitting consumers and businesses,” says Pak.

       Pak believes ABS will be able to offer solutions to customers that are as attractive as the corresponding fiber solutions. He says, “Although there has been progress in rolling out fiber, we realize that it will still take considerable time to reach most of the land-locked countries and rural areas, so satellite will be the only logical alternative for the near future. We also have plans to launch some innovative satellite-based services which will make satellite capacity as affordable as fiber.”

       The company could also be in the market for further acquisitions. The operator has aggressively expanded its fleet in recent years. It acquired the Koreasat-2 and Koreasat-3 satellites from Korea Telecom. ABS also acquired the Mabuhay Satellite Corporation based in the Philippines in 2009 and could still make further acquisitions. “Yes, we are actively looking to increase the fleet size. We are constantly looking for opportunities for the company to expand, whether we are acquiring companies or assets to complement our satellite infrastructure,” Pak says.

       The company is one a new breed of operators looking to be effective across a number of different markets. In terms of where the growth opportunities are for the company, Pak says, “We see growth opportunities in the Russia/CIS region, Middle East/North Africa, as well as the Asia-Pacific markets. We see the high growth prospects driven by the growing number of international channels entering the market; regional demand for HD broadcasting, the development of pay TV platforms and the continued growth of telecommunications services for mobile and Internet connectivity as the key drivers for growth.”

       With a global economic downturn going on, Pak admits it has been a difficult operating environment for the company. He says, “In general, we do not see a major impact of global economic downturn on our existing business. There is definitely an impact on rate of growth of business in some markets. However, this could be a combination of factors including economic slowdown in some markets, lowering of terrestrial bandwidth costs, newer technologies capable of delivering bandwidth from base stations to underserved areas cost effectively and newer applications that demand low latency.”