APT of Hong Kong appears lukewarm on global HTS project
March 29, 2017
PARIS — Satellite fleet operator APT Satellite Holdings of Hong Kong has agreed to invest 600 million Chinese renminbi ($86.3 million) for a 30 percent interest in a Chinese joint venture to launch a Ku-/Ka-band high-throughput satellite over the Asia-Pacific.
The satellite, called Apstar-6D, will be built and launched in China and is intended as the first of a global four-satellite constellation offering mobile broadband connectivity to aeronautical, maritime and land-mobile markets.
The project, announced in mid-2016, is eventually expected to cost 10 billion Chinese RMB, but APT has not committed to a role beyond its share in the Apstar-6D, to be launched in 2019.
The company has said its involvement in the project, managed through a joint venture called APT Mobile Satcom Ltd., would proceed satellite by satellite.
Other partners in the venture include Beijing Shipping, a subsidiary of China Transport Telecommunication Information Center, which manages China’s maritime sector; Guo Xin (Shenzhen), a subsidiary of China Guoxin Trading Co. Ltd., an investment vehicle; Shenzhen Hao Chuang, a diversified industrial conglomerate; and Mr. Pang Lixin, an investor who will represent the management team.
Reduced ownership stake in China’s global HTS?
APT’s March 23 filing with the Hong Kong Stock Exchange implied that the fleet operator has backed off its initial ownership stake of 43.2 percent, as was announced when the project was first made public.
China’s moves toward HTS satellites is important as a measure of China’s likely receptiveness to non-Chinese HTS spacecraft seeking access to the Chinese market. If the fully, global APT-coordinated system is built, it would give Chinese regulators an incentive to accord landing rights to foreign operators in exchange for APT getting access to markets outside Asia.
But if the project remains a one-satellite system, that might mean China is banking on self-sufficiency in HTS technology and might be less likely to grant access to foreign systems.
Among the companies with a demonstrated interest in entering the Chinese market with an HTS system are ViaSat Inc., Inmarsat, OneWeb, Telesat, Boeing and Hughes Network Systems.
In addition to these companies, satellite service providers are seeking access to the Chinese market using satellite bandwidth they have purchased from third parties, which are mainly non-Chinese satellite fleet operators.
Apstar-9’s arrival provides growth in revenue, profit
For the 12 months ending Dec. 31, 2016, APT reported revenue of 1.23 billion Hong Kong dollars, or $158.6 million at Dec. 31 exchange rates. That’s a 3 percent increase, in local currency, from 2015. Pretax profit was also up 3 percent — an increase APT said would have been 6.3 percent were it not for the one-time service income booked in 2015, which skewed the year-to-year comparison.
EBITDA, or earnings before interest, taxes, depreciation and amortization, was 82.8 percent of revenue, up from a 75.2 percent margin the year before.
The company attributed the increased revenue and profit, despite a poor satellite pricing environment in East Asia, to the launch of the Apstar-9 satellite, which entered service in December 2015 at 145 degrees east.
Apstar-9, a Chinese DFH-4 platform, carries a C- and Ku-band payload for cellular backhaul in East Asia and, in Ku-band, for the eastern Indian Ocean region and the West Pacific as part of APT’s move into maritime and aeronautical connectivity markets.
The company has two satellites under construction. Apstar 5C, under construction by Space Systems Loral of California, is part of an agreement with Telesat of Canada in which APT owns 57.47 percent of the satellite’s payload.
Apstar-6C, to be built and launched by China, will carry a mixed C-, Ku- and Ka-band payload.
Both satellites are scheduled for launch in the first half of 2018.
APT Chairman Yuan Jie told investors to expect further pressure on prices in 2017 as the capacity glut in the region shows no sign of going away. He said the company would continue to look for new markets to maintain growth.
Peter B. de Selding