Sky Perfect JSAT Corp. has embarked on a unique growth strategy in recent years, strengthening its position in Japan and the Asia-Pacific region and making it one of the largest satellite operators around the globe.

In 2007, JSAT merged with Sky Perfect Communications, a leading pay-TV operator in Japan with more than 4 million subscribers, creating a fixed satellite services (FSS) powerhouse with a strong presence in the direct-to-home (DTH) arena. The combination leaves Sky Perfect JSAT in a unique position to tap into the lucrative Japanese pay-TV market.

The satellite operator also is moving into other markets, announcing in August a strategic initiative with Stratos to target the mobile satellite services (MSS) market in Japan. The creation of JSAT Mobile Communications Inc. will bring Stratos’ portfolio of MSS, including Inmarsat and Iridium services, to the Japanese market.

Today, Sky Perfect JSAT is moving far beyond its traditional FSS roots, as the original JSAT is transforming itself into a highly diversified operator with a strong position in pay-TV as well as targeting the MSS market. The man behind this growth strategy, CEO Masanori Akiyama, discusses with Via Satellite the diverse growth strategy and the major challenges for Sky Perfect JSAT as it aims to push forward in a variety of markets throughout the coming years.

VIA SATELLITE: How has the Japanese and Asia-Pacific satellite market evolved throughout your time in the industry?

AKIYAMA: In the Japanese satellite market, we have seen growth in private sector businesses such as point-to-multipoint networks, government/public-related business and broadcasting businesses like Sky PerfecTV. Growth in the Asia-Pacific satellite market has been underpinned by video transmission and satellite Internet services.

VIA SATELLITE: Do you see Sky Perfect JSAT becoming the primary satellite operator for the Asia-Pacific region?

AKIYAMA: The Sky Perfect acquisition made us the number one satellite operator in the Asia-Pacific region and the fifth largest in the world in terms of turnover and satellite ownership.

VIA SATELLITE: What is the vision for Sky Perfect JSAT’s future growth strategy?

AKIYAMA: Firstly, we are looking at the public services market. Here, we will promote the use of satellite communications in the digital divide resolution policy of Japan’s Ministry of Internal Affairs and Communications. We will also consider cooperative ventures in public satellite services based on the Basic Space Law (the basic framework for the development and use of space in Japan which allows private companies to collaborate in satellite business fields where government ministries and agencies traditionally have played a dominant role). Secondly, we are looking at the mobile business market. Our priority is to offer marine broadband services for inland and ocean-going vessels. We will also participate in mobile satellite services through our affiliated company JSAT Mobile Communications. Finally, we also want to gain more global business. We will step up transponder sales in Asia while considering potential alliances. Expanding Intelsat alliances in North America is another priority.

VIA SATELLITE: How would you assess the financial situation of the company?

AKIYAMA: We have been generating strong operating cash flows and hold ample cash and cash equivalents. Our balance of debt has remained stable under these circumstances.

VIA SATELLITE: Are you seeing any impact in terms of your abilities to generate revenues due to the global economic crisis?

AKIYAMA: Unlike advertising-based business models, our satellite broadcasting business model is based on contracted subscription fees. As for the satellite communications business, we have long-term contracts with governmental/private entities, therefore, we have yet to see any drastic decreases in sales and subscribers at this stage. However, we will need to keep a close eye on economic developments going forward.

VIA SATELLITE: Do you expect the financial crisis to have an impact on the number of operators in the region?

AKIYAMA: The Asian market has not been hit as hard as the U.S., European and Japanese markets. In fact, we are seeing an increase in transponder demand for the C-/Ku-bands in the Asian market.

VIA SATELLITE: What is your growth strategy for JSAT Mobile and your expectations for the mobile market?

AKIYAMA: In February, JSAT Mobile introduced the new Inmarsat BGAN service and FleetBroadband Service to the Japanese market. Since the Inmarsat service is effectively mandatory for ocean-going shipping, we don’t expect to see any rapid decrease in demand.

VIA SATELLITE: Satellite pay-TV penetration in Japan is still relatively low. Do you see there being a huge growth opportunity for the company in terms of pay-TV?

AKIYAMA: Penetration of satellite pay-TV is still at just 8 percent of all households in Japan, therefore, we still have a lot of room to expand our subscriber base for Sky PerfecTV and Sky PerfecTV Hikari (broadcasting service over fiber to the home) services. We began offering Sky PerfecTV HD broadcasting services in October. Plans call for expanding this service to more than 70 channels by 2009 and 100 channels in 2012 in order to meet consumer demand. Thanks to increased penetration of 3-wave digital TV sets (terrestrial/BS/CS), Sky PerfecTV is seeing rapid subscriber growth. Also, Sky PerfecTV HIKARI is attracting more subscribers by cooperating with NTT through the use of its optical fiber network.

VIA SATELLITE: Is HD a major growth opportunity for Sky Perfect JSAT?

AKIYAMA: We believe that HDTV broadcasting represents a major growth opportunity in Japan. We are offering and expanding Sky PerfecTV HD broadcasting services to seize on this opportunity.

VIA SATELLITE: How do you see the broadband access market developing in Asia?

AKIYAMA: We are promoting the use of satellite broadband systems as a means of resolving the digital divide in rural and remote areas in Japan.

VIA SATELLITE: What are your capital expenditure plans in terms of ordering new satellites and adding more capacity over Asia?

AKIYAMA: Firstly, in 2009, we plan to launch the following satellites: JCSAT-12, an in-orbit backup satellite, and Intelsat-15, a satellite that we will partially own (five Ku-band transponders) with Intelsat at 85 degrees East covering Asia, the Indian Ocean and the Middle East. Secondly, in 2011, we plan to launch JCSAT-110R, a BS/CS Hybrid satellite that will be jointly owned with BSAT and serve as an in-orbit backup satellite for N-SAT-110. Finally, on April 16, we ordered JCSAT-13 at 124 degrees East for a 2013 launch. The JCSAT-13 satellite will be the successor to JCSAT-4A, which is currently used to provide Sky PerfecTV services. JCSAT-13 will carry a Japan beam, Southeast Asia beam and two steerable beams to cover an extensive area ranging from the Middle East to Southwest Asia, Southeast Asia and Oceania.