In the course of my work as a consultant and executive recruiter based in Asia, I have spoken to over 150 satellite and digital broadcast sales, business development and senior management professionals in the last six months on the prospects of the Asian market. The consensus among key satellite executives is that the business of satellite communications in Asia continues to grow and is better off than other regional markets by "a significant margin."
The worldwide economic downturn notwithstanding, all indicators point to a robust and dynamic Asian market that will not only weather the storm but prevail. As on executive put it: "Asia is not waiting on anyone or anything!"
Most are also quick to describe that second quarter looks much better than first and that many companies have decided to both - shift focus from other regions to Asia and to allocate budget in a targeted, rifle shot manner, as opposed to a shotgun approach. Sales commissions and incentives have generally increased and at the same time meeting one’s sales quota is no longer a sure thing. In a recent conversation with a VP of Sales for a European equipment manufacturer, his focus was clear – "We are going to hire the best and incentivize them well, to expand our business base in the only market that makes sense for us to be investing in – Asia."
There is much evidence supporting the bullishness of investors in the Asian market. On June 2, EchoStar announced it had partnered with AsiaSat to provide DTH services to Taiwan and the region and just two weeks earlier the ProtoStar - Indostar spacecraft was successfully launched. Earlier this year PLDT and Smart Communications launched a DTH service in the Philippines. Equipment manufacturer C-Com reports recent sales in Vietnam, China, New Zealand, India, Malaysia and Iraq and this kind of regional spread is more common than you might think. The Rockwell Collins’s purchase of Swe-Dish (part of Data Path) was finalized earlier this week, a company selling their suitcase terminals in large numbers across the region. Thuraya is expanding their regional presence and offerings beyond their satellite based mobile telephony offering, and in the words of a senior product manager for one of the larger carriers, "There are plenty of satellite opportunity begging for our attention."
Recognizing the region’s value five new members have been added to the Cable and Satellite Broadcasting Association of Asia (CASBAA) roll call; two from India, and one each from Taiwan, Hong Kong and the US – with the US entrant being a satellite service provider operating across Asia.
Over the last six months many of the European companies have taken their business plans off hold and are expanding their Asian presence, while their North American counter parts continue to take a more cautious approach. Focus countries remain China and India - with Indonesia, the Philippines and Vietnam continuing to well worth paying attention to. In addition, Middle East and Eastern European companies are pushing forward with plans to establish their Asian presence, while at the same time Asian companies are opening offices this year across the Middle East including Afghanistan, UAE, Pakistan and Uzbekistan.
European television broadcast equipment and system manufacturers who have established new or expanded existing presence this year thus far include; set top box, middleware, media asset management, conditional access, compression, and video play-out system companies. Tandberg TV, for example, reported a 43% increase in APAC revenues in 2008 focused on video compression and on-demand services.
DTH
The Asia-Pacific region is seeing growth which, for the most part, is driven by television including DTH, feeder links and content distribution. Service providers are preparing to stream video to cellular carriers and wireless infrastructure operators as telcos look to differentiate their offering with mobile television service – And DTH revenue models are adapting to consumer make-up with advertizing, a trade-off against subscription based ARPU, becoming an ever larger part of the DTH revenue stream.
Asian-Pacific pay television and broadband continues to grow with most industry pundits expecting 2009 growth between 10% and 13%. The five year projection is to see a doubling in regional revenues from some US$50 billion to over US$100 billion. New DTH operations this year in Asia include Indonesia and the Philippines. Mediascape has launched a satellite pay-TV platform, Cignal Digital TV, in the Philippines and Protostar successfully launched IndoStar II which will replace the IndoStar-I satellite now in its 12 year of service as Asia’s first DBS and the world’s first S-band commercial DTH service. The spacecraft also carries a Ku-Band payload (Protostar II) which provides Philippines, Taiwan and Indonesian coverage.
India’s new subscriber growth has slowed to 1.3 million subscribers being added in the 1st quarter of 2009 with a decline in ARPU of up to 50% among the new subs. Indian DTH has added 7.5 million subscribers since January 2008, and by most accounts this represents only 10 – 15% of the market’s ten-year potential.
Mobile TV
Driven by consumer demand and technology developments, South Korea is comfortably several years into satellite based television broadcasting direct to the handsets using the Digital MultiMedia Broadcasting – Satellite (DMB-S) standard. China where the Mobile TV market is expected to take off based on homegrown standards (i.e. T-DMB & CMMB) (China Multimedia Mobile Broadcasting).
Speedcast holds Mobile TV as one of their three focus points in a region that is looking toward 50% mobile TV subscription within the next 5 years.
Moving Data
Demands for access to data and the internet by industries including maritime, off-shore oil facilities, media broadcasters and NGOs operating in rural areas are driving regional service providers to rethink their service offering.
Thuraya recently launched an A5 sheet of paper sized terminal capable of 444 kpbs. Thuraya also has plans to expand its service offering and establish local presence across Asia served from its regional headquarters in Singapore.
Thaicom’s IP-Star announced services "open standard network" which is now concentrating on bandwidth sales rather than end-to-end service provision.
Maritime services continue to grow in Asia with Speedcast, ShipEquip, CapRock, and others all increasing their regional activities.
In sum, the Asia-Pacific region is buzzing with activity and there is no shortage of opportunities.
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Tom van der Heyden is a Hong Kong based satellite communications industry pioneer and Recruiting Consultant with MRI China. He can be reached at phone +852 3656-5694 or e-mail : thomas.vanderheyden@mrihk.com
