Asia's satellite sector must cut costs and take more gambles on technology innovations to stay relevant in the broadband age, but is being held back by risk-averse shareholders, heavy competition and the very nature of the market itself, said industry executives.
Thomas Choi, CEO of Asia Broadcast Satellite, said that the satellite industry needs to follow the example set by the mobile industry, which has leveraged innovation to grow from a $200 million business in 1990 to a $1 trillion business today.
"We don't innovate enough - that's why the satellite industry is only growing at 6% a year," he said. "There are not enough gambles being taken, especially in the last 15 years."
Choi said that the mobile industry has been able to grow the way it has because it reduced prices and increased quality. "We need to follow that example. We have to lower costs dramatically, by at least two orders of magnitude, where instead of a million-dollar transponder price you have a $10,000 transponder price."
Bill Wade, president and CEO of AsiaSat, agreed that costs need to come down, but added that it wasn't reasonable to compare satellite to the mobile sector. "We'll never be in the same league as terrestrial operators. We're putting things 36,000 km above the Earth in a hostile environment. They're high-cost, but they're also very sophisticated. If we want to create low-cost options, you also have to remember that what we're requesting from satellite manufacturers is usually pretty rigid in terms of high power, coverage, interference management, and so on. That's not cheap."
That said, costs could potentially come down in other areas, such as launch services. For example, both ABS and AsiaSat have used upstart launch provider SpaceX, which is known chiefly for its comparatively low (and transparent) prices. SpaceX is also working on a reusable booster that could reduce launch prices from as much as $70 million today to as low as $5 million, said SpaceX president and COO Gwynne Shotwell.