Asia-Pacific satellite operators see partnerships via shared satellites as the main way forward to expand their businesses and gain operational efficiencies as national politics prevents badly needed consolidation in the region.
Several regional satellite operator CEOs cited cooperation and the rise of so-called “condo-sats” – satellites shared by operators in a given orbital slot – as a key development in the Asian satellite market in the past year, and one that will go mainstream in the near future.
“Consolidation has been an issue in Asia for some time, and as an industry we haven’t really done a good job of that, but we have been seeing an increase in cooperation,” said AsiaSat president and CEO Bill Wade, citing recent satellite sharing deals between Asia Broadcast Satellite and Satmex, Measat and IPstar, and AsiaSat’s own deal with Thaicom announced at the end of last year.
Cheng Guangren, executive director and president of APT Satellite, agreed that cooperation between satellite operators has been the most significant development for the sector in the past year. “Condo-sats may become the mainstream in the future for this region,” he said.
Measat CEO Paul Brown-Kenyon said that as demand for satellite services increases, operators will look for different ways of meeting that demand. “Some will build new satellites and some will go with the condosat model, and it will become a more complex business where you’re partners in one market and competitors in another.”
Satellite operators haven’t ruled out the possibility of consolidation completely, and there are recent examples of successful consolidation, such as ABS’ acquisition of Philippines-based Mabuhay in 2009, and JSAT acquiring SKY Perfect and rival Space Communications in 2007 and 2008, respectively, to create SKY Perfect JSAT.
But satellite industry consolidation is a hard dollar in Asia primarily because of national politics, said Wade.