Thaicom hangs on to domestic DTH market, targets India for broadband
March 30, 2017
PARIS — Satellite fleet operator Thaicom said it expects to survive Southeast Asia’s excess capacity and bandwidth-price pressure by holding fast to its core Thai direct-to-home satellite television market and expanding its broadband data-transmission reach
The first goal is being accomplished, so far, by the Thaicom 8 satellite launched in May 2016 and stationed at Thaicom’s key 78.5 degrees east orbital slot.
Thaicom 8 was only 17 percent booked at launch, which was less than the company had hoped for. But Thaicom officials told shareholders that the $200-million Thaicom 8 program — an Orbital ATK-built satellite and a SpaceX Falcon 9 launch — would reach break even with a 30 percent fill rate, and that this threshold should be reached before the satellite’s first anniversary in orbit.
In its annual report for the March 28 shareholder meeting, Thaicom said 18.4 million Thai householders had their television antennas pointed to 78.5 degrees — 73 percent of the Thai population.
Echoing statements by other fixed satellite services providers, Thaicom said that despite the pricing pressure — and in some cases, perhaps because of it — the number of TV channels loaded onto the Thaicom platform continues to increase.
Hot Bird slot at 78.5 East increases channel count
As of Dec. 31, 2016, the Thaicom fleet at 78.5 degrees — Thaicom 5 and Thaicom 6 are there in addition to Thaicom 8 — was hosting 897 channels, up 13 percent from the previous year. The channel count included 117 being broadcast in HD format.
Thaicom did not disclose how much of its DTH portfolio had already been converted to MPEG-4 compression and how much was still in MPEG-2, making it difficult to determine whether future HDTV growth would boost revenue or would be offset by the move to the higher signal-compression standard.
Thaicom reported 8.41 billion Thai baht ($234.5 million) in satellite-derived revenue in 2016, down 9 percent from 2015 as the company suffered the general slump in satellite bandwidth pricing.
That figure includes what Thaicom calls conventional satellite and the company’s broadband business through Thaicom-4/IPStar, a Ku-band high-throughput satellite launched in 2005, well before HTS was a trend.
Thaicom’s IPStar HTS experience in the past 11 years should be required reading for every company considering an HTS play, whether from geostationary orbit, such as IPStar, or in lower orbit through a constellation of satellites.
It took Thaicom many years after the satellite’s launch to secure landing rights in the vast Asian territory within its footprint.
An early success in Australia is now under threat because of the Australian government’s NBN Co., which has purchased two Ka-band HTS satellites as part of a universal service offering.
Thaicom’s Australian IPStar subsidiary has won an extension of its contract to September of this year. Whether it gets another extension depends in part on NBN’s ability to deploy its Ka-band ground network and user terminals.
With the Australian business in decline, Thaicom is focusing on India, whereIPStar’s Indian subsidiary was formed in early 2016, as well as Indonesia and the Philippines.
In 2016, India was the only geographic area that showed revenue growth for Thaicom. The company said it is also focusing on the Philippines and Indonesia for Thaicom-4/IPStar.
Thaicom’s broadband business in 2016 fared slightly better than the conventional satellite business.
Thaicom-4/IPStar service revenue dropped 4.6 percent, to 3.7 billion baht. Equipment sales dropped 15 percent, to 269 million baht. But the business in India was up 29 percent, to 706 million baht.
Conventional satellite revenue down 12% in 2016
Revenue from the conventional satellites was 4.4 billion baht, down 12.3 percent from 2015, Thaicom said.
A year ago, Thaicom seemed ready to commit to a Thaicom-9 satellite, which industry officials assumed would be ready to take over from Thaicom-4/IPStar as that satellite nears retirement.
Thaicom-9 has not been ordered and Thaicom’s most recent investor statements make no mention of it.
Satellite manufacturing companies have said fleet operators are hesitating before committing to new HTS satellites out of fear they may be outdated when California-based ViaSat Inc. launches a terabit-per-second ViaSat-3 satellite over Asia, which has not yet been contracted.
Thaicom is still waiting for a clarification from the Thai government about future licensing fees to apply to Thaicom-9. The company said the fee applied to Thaicom-8 is 22.5 percent of revenue, kip from 20.5 percent on previous satellites.
Peter B. de Selding