APT Satelite Holdings’ Huang Baozhong is one of the few satellite industry officials in Asia to say the market has hit bottom and will stabilize. Credit: APT

TOKY0 — Asian satellite fleet operators on Oct. 10 said the expect to ride out the current market turmoil by sticking with their core video markets, which they said will not be overly affected by high-throughput satellites’ massive arrival in Asia.

Similarly, they said they are mainly uninterested in investing in low-orbiting satellite broadband constellations, which they argued will — if built — have a huge effect on satellite data distribution but little effect on video.

“Video is our core market and GEO [geostationary orbit] is the preferred option for that,” said Yau Chyong Lim, chief operating officer of fleet operator Measat of Malaysia, which owns the Astro satellite-television provider. “If the LEO constellations are successful it will be good for everyone.”

Sky Perfect JSat of Japan has made a small investment in the LeoSat project, which is designed to provide high-volume data trunking to corporate and government customers. But Mitsubishi Akao, the company’s executive officer, said the broadband LEO constellations are not a threat to the Sky Perfect television business.

A bigger threat, said Sky Perfect TV Executive Officer Jiro Komaki, is from internet video, or OTT, which has taken market share from satellite television and cable television providers in Japan.

Komaki said internet-delivered video, even in high-definition format, is now able to deliver customer services in ways it was unable to do until recently, taking away a historic advantage of satellites. Their success has come despite the fact that it’s doubtful any of these OTT operators are making a profit in Japan as of yet, he said.

Huang Baozhong, executive vice president of APT Satellite Holdings of Hong Kong, for which the Chinese mainland market is of increasing importance, said APT’s business is still growing despite recent stagnation brought about by the hyper-competitive Asian satellite market.

Huang said some fleet operators in Asia are selling bandwidth at prices below the cost of construction of the satellite, a situation that he said cannot last.

“Prices will stabilize,” Huang said. “If you look at Asia-Pacific prices in the past year you see frequently prices go down far below the construction cost. So everybody selling at that price will go out of the game.

“The reason I believe the prices will stabilize is that prices are already pretty low and operators are suffering a lot. I expect some of those loss-selling companies to be out of the game very soon.”

That may be wishful thinking. The Asia-Pacific satellite market has been crowded for years, but since most operators are closely tied to their national governments, none has gone out of business, and several new operators have been created.

APT is counting on its reputation to carry it through the current rough period.

“Frankly speaking, our prices are not cheap,” he said during September’s World Satellite Business Week. But despite this, broadcasters who were using Indonesia’s failed Telkom-1 satellite signed on with APT.

“Indonesia is a major market, with demand for universal service. They have to choose reliable suppliers, and they want long-term partners. They are not just looking at the low price. The same is true for mobility. Cruises and commercial shipping industries are not focused on price.”

Huang’s prediction that Asian bandwidth prices are now at bottom and will stabilize is not universally shared by its fellow operators, who see continued oversupply based on satellite orders made in recent years.

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Peter B. de Selding
Peter B. de Selding

Peter de Selding is a Co-Founder and editor for SpaceIntelReport.com. He started SpaceIntelReport in 2017 after 26 years as the Paris Bureau Chief for SpaceNews where he covered the commercial satellite, launch and the international space businesses. He is widely considered the preeminent reporter in the space industry and is a must read for space executives. Follow Peter @pbdes