CommunicAsia 2011 Highlight Opportunities in the Asia-Pacific Satellite Market

by Virgil Labrador, Editor-in-Chief

Singapore, June 30, 2011--There was a noticeably strong presence from the satellite sector in the recently concluded CommunicAsia2011, held concurrently with BroadcastAsia 2011, with CEOs from all the major satellite operators speaking at the conferences and a record 110 satellite companies exhibiting at both shows. 

The consensus among the speakers which included the CEOs of the biggest satellite operators such as Intelsat and SES was that the future for satellite service providers in the Asia-Pacific is in the broadband space.  One of the highlights of the CommunicAsia Satellite Summit and other pre-conference events was the recent announcement of the largest satellite operator Intelsat that it will invest US$ 1.3 billion in four satellites serving the Asia-Pacific region.  The second largest operator SES likewise announced plans to launch three satellites to cover Asia-Pacific in the next 3-5 years.   “All the right ingredients are there for the take off of various broadband and Direct-to-Home (DTH) applications in the Asia-Pacific market,” said SES’ CEO Romain Bausch.

“We are witnessing rapid infrastructure changes in the Asia Pacific market as consumer desire throughout the region shapes today’s television into an ‘anytime, anywhere’ experience. New devices and consumer behavior is driving up video traffic and putting increased bandwidth pressures on networks,” said Staffan Pehrson, Vice President and Head of Solution Area TV, Ericsson.

“Digital penetration in the APAC region is set to rise dramatically over the next five years, which presents a number of challenges to operators; not only in the acquisition and processing of high quality content but also in the management and efficient delivery of large volumes of video, media and audio across multiple platforms to multiple devices,” said Pehrson.

High Throughput Satellites (HTS) using Ka-Band technology which is considered ideal for broadband applications is largely considered as the future of satellite technology according to Doron Elinav, Marketing Director of Gilat Satellite Networks.  Elinav says there is opportunity for satellite service providers in the extension of 3G networks, backup for cellular backhaul and overflow of data.

Satellites do face competition from fibre and other terrestrial networks, but this should not be viewed as a threat but an opportunity according to speakers at a panel on “Satellite Broadband” chaired by Patrick French of NSR.   Ramesh Ramaswamy, Vice-President of Hughes said that HTS is not a “one size fits all solution” and may be ideal for certain applications such as rural broadband access, but will not fit every requirement.

Tom van der Heyden, CEO of Sky Fiber, said in his presentation on “Mobile Backhaul and Broadband Internet Services” that wireless carriers are facing a “tidal wave” of social networking and internet-driven mobile services that cannot be met by purely terrestrial networks.  Carriers have to use satellites to meet growing demands on their networks said van der Heyden but face latency issues in the geostationary arc.  Sky Fiber  announced at the show a “multi-year, multimillion dollar” reseller agreement with O3B Networks which is launching a constellation of Ka-Band satellites in Medium Earth Orbit (MEO) will address the issue of latency and provide fibre-like speeds.

According to telecoms analyst Oliver Johnson the deployment of next generation networks in Asia is allowing service providers to supply new innovative offerings such as multiplay packages, IPTV, fixed-mobile convergence and sophisticated enterprise solutions. Factors shaping this dynamic market include Gross National Income (GNI), the growth of urban populations, national regulatory environments and the spending plans and policies of governments in the region.

The region is also home to a mix of mature, emerging and youthful broadband markets. “In Asia at the country level it is clear that the internal as well as international digital divides will remain a fact of life to the end of the decade and beyond,” said Johnson.

Research findings released at the show by Point Topic affirm that Asia remains the fastest growing region for broadband with 16.21 per cent – almost double that of the Americas. Asia’s fixed broadband subscribers now make up 42 per cent of the global total, up from 40 per cent last year, with Europe and the Americas behind with 30 per cent and 25 per cent respectively. Emerging markets are making strides, with the Middle East and Latin America advancing quickly, according to findings of the Point Topic research.

With an increase of over 15.2 million subscribers in the first three months of this year, fixed broadband grew by 2.9 per cent globally. This was the biggest quarterly increase in the last two years and representing an annual growth rate of 11.93 per cent, according to figures released by the Broadband Forum. IPTV also shows exceptional growth rates with an increase of over 34 per cent in the 12 months to the end of March 2011, based on the data prepared for the Broadband Forum by Point Topic.

“Broadband is showing healthy double digit growth and has in fact increased its growth rate this year. This indicates how vital it has become to businesses, residential consumers and countries,” noted Robin Mersh, CEO of the Broadband Forum.

The strong Asian growth is due in large part to the continuing success in broadband in China with 42 per cent of the net additions to the total global broadband subscriber numbers coming from China and its territories (the Special Administrative Regions of Hong Kong and Macau) in the first three months of 2011.

While broadband demand in Asia is strong and will be for years to come, there are challenges that need to be overcome.  Broadband penetration is still below 20 percent for most of the Asian region (compared to over 60 percent in North America and some parts of Europe).  Johnson thinks Asia could not get to 50 percent penetration by the end of the decade without major government involvement.  “Some markets are at risk of being left behind and will need some central intervention to avoid that outcome,” said Johnson. “In addition it’s essential that competition in the service market is free and fair,” he added.

View Video and Audio  Interviews with Key Executives at CommunicAsia 2011 in Singapore

At CommunicAsia 2011 in Singapore,  Satellite Markets and Research Editor-in-Chief Virgil Labrador spoke with key industry executives such as Terry Bleakley, Regional Vice-President, Asia-Pacific of Intelsat; Julian Wheeler, Vice-President, Global Media and Entertainment of Tata Communications; Oliver Johnson, CEO, Point Topic; and Simon Twiston-Davies, CEO of CASBAA. To view or download  the podcasts click here.

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Virgil Labrador is the Editor-in-Chief of Los Angeles, California-based Satellite Markets and Research which publishes a web portal on the satellite industry, the monthly magazine, Satellite Executive Briefing and occasional industry reports called MarketBriefs.   Virgil is one of the few trade journalist who has worked in the industry as a senior executive for a teleport in Singapore , the Asia Broadcast Center, then-owned by the US broadcasting company CBS.  He has co-authored two books on history of satellite communications and satellite technology.  He holds a Master’s in Communications Management from the University of Southern California (USC). He can be reached at virgil@satellitemarkets.com