Satellite must liberalize: operators

20 Jun 2006

Regional and global satellite operators seeking access to new markets say that it's time for regulators in Asia 's restrictive satellite markets to let go and liberalize the sector.

Despite markets such as Australia, New Zealand, the Philippines, Taiwan and Hong Kong allowing relatively easy access for non-domestic satellite operators, satellite remains one of the very few telecom sectors where market liberalization is not yet the norm - even in markets where other telecom sectors have been opened up and competitive for years, says Phil Spector, executive VP and general counsel for Intelsat.

"Look at Korea , where there's tremendous competition and huge growth and take-up of services like cellular and broadband," Spector said during a panel session on regulatory issues at the CASBAA Satellite Industry Forum in Singapore . "Surely the government can see that if they open the satellite sector in the same way they'll realize similar benefits."

Korea is named alongside other Asian markets such as China , India , Taiwan and Vietnam whose satellite regulations still pose significant barriers to entry for non-domestic satellite players, according to Connie Carnabuci, a partner of international law firm Freshfields Bruckhaus Deringer.

"In China , for example, non-domestic players can only lease capacity if they acquire a Type II license or partner with a licensed operator. The process for getting a license is non-transparent, the criteria for decisions is secret, and to date no license has ever been issued," she says.

Carnabuci says a harmonized regulatory approach similar to that of the EU can deliver a positive outcome in the region by allowing greater access to capacity. "This would benefit not only the pay-TV sector but other applications like telemedicine and distance-learning."

However, getting the region's regulators to work together on satellite liberalization is going to be uphill work, especially for markets with government-owned or controlled satellite operators, says Deepak Mathur, managing director of SES Global.

"One critical point is that the regulator must delink from the operator," he says.

Intelsat's Spector says that more needs to be done to engage in dialogue with regulators to make the case for satellite liberalization.

"We need more dialogue with the regulators so that we can educate them and show them the benefits of opening markets," he says. "It's important to build a consensus on this issue, because if one operator leads the charge, it invites retaliation rather than discussion."

Mathur of SES Global suggests that operators can apply extra economic pressure by shifting their capacity away from restricted markets as they enter replacement cycles.

"There's already an oversupply of foreign capacity over China and India, for example, so if the global operators start shifting their capacity out of the region, that could drive demand for foreign capacity once domestic operators start running short," he says.

Mathur also says it's important to get consumers involved in the debate in other ways. "If you get the customers to appeal to the government, they'll have more success. In India , for example, we worked with VSAT customers to get temporary approval to use foreign capacity, even though according to government policy it's not allowed."

Paul Brown-Kenyon, COO of Malaysian satellite operator Measat, agrees that raising awareness among regulators is a key step forward, but says the question of liberalization is too complex to be resolved through any kind of consensus.

I think the important thing is to have bilateral discussions between operators," he says. "If operators can work on this one-on-one, one market at a time, it will go a lot faster than trying to organize one big group hug."

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