Video boom to save satellite

John C. Tanner
16 Jun 2009
00:00
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Daily News

Video will see the Asian satellite sector through the global recession - provided economies start recovering by next year,said industry experts.

The FSS satellite sector has managed to weather the recession reasonably well, with most major players reporting a profitable 2008, while service demand is on the rise and orders for new satellites are up year on year, said David Ball, regional VP of Intelsat.

Revenues from FSS-based services hit $9.6 billion last year,compared with $8.9 billion a year ago, said Romain Bausch,CEO and president of SES.

New figures jointly released Monday from CASBAA and Euroconsult said that the Asian transponder market has grown 9% year on year, the highest growth rate in eight years.

Video distribution is getting much of the credit as a recession-beater, particularly with up-and-coming services like DTH and high-definition video.TV broadcasting transponder demand grew 37% between 2003 and 2008.

DTH has been a chief driver, the report said, with 28 DTH platforms now carrying almost 2,600 channels, compared to 13 platforms with 925 channels in 2002. India is the fastest growing market with 11 million DTH subs.

Bausch said high-definition video will be another capacity driver going forward, with 400 HD channels expected in Asia by 2017.

That\'s not to say video is the only growth market for satellite.Asia will add another 400,000 VSAT sites by 2014 for over 900,000 total, and it\'s also the top region for satellite-based cellular backhaul, he said.

But video\'s potential is one reason why SES Americom-New Skies is actively strengthening its video portfolio in Asia,with a new video contract announced Monday with Taiwan\'s Teleport Access Services, said SES New Skies senior global sales VP Scott Sprague.

That said, the satellite sector won\'t skirt through the recession completely unscathed, depending on the customer base,said Dan Goldberg, president and CEO of Telesat.

"We\'ve seen a little impact on our margins from specific business segments that support the US auto industry and oil & gas exploration," he said. "But in the main we\'ve held up pretty well, and 2008 was a strong year for us."

However, Goldberg added that if the downturn persisted into 2010, some satellite operators could see a bigger impact."The companies to feel it first will be the short-term contract customers, usually non-video."

Asia also has another issue: despite the growth in demand, its transponders are only about 60% full - 10% below the global average of 70%, said Stephane Chenard, associate senior consultant at Euroconsult.

Still, Bausch of SES added that global transponder demand for the industry is projected to grow at 3.5% CAGR from 2008 to 2016.

"Ku-band will see the biggest growth at 4.5%, with C-band growing 2.4%," said Bausch. "The growth for Asia will be higher in that time frame, at 5.9% for Ku-band and 3.3% for C-band."

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