By Mark Holmes

The Asian communications and broadcast market is in good health despite economic problems in other regions of the world.
Patrick French, senior analyst at NSR said the region has been less impacted than others. “Based on discussions with numerous satellite operators in the region and around the world, Asia so far has seen minimal impact from the global economic crisis and it has been no more or less severe in Asia than elsewhere,” he said.
    “The markets are coming back slightly in Asia,” said Vivek Couto, executive director, Media Partners, a Hong Kong based research firm. “How that feeds through to the capital raising and how that will fund the development of digital pay-TV platforms in big markets such as China and India, as well as emerging markets such as Indonesia, Vietnam is going to be key. There are a lot of deals on the back burner at present,”
    The move to digital broadcasting is moving at a rapid pace throughout the region, and large markets such as China, India and Indonesia are tantalizing prospects for service providers. But these are not easy markets to tap into.
     “Frankly, two of the three markets (China, India) are much closer to monopolies/controlled markets than free markets and even Indonesia is dominated by its national players. While the potential for demand is significant, especially in India and Indonesia, it can be very difficult for non-domestic operators to tap into it. Still, India and Indonesia will see continued growth,” said French.
    Couto said, “Indonesia has a very low base to grow from. There is less than 3 percent penetration there and that could go up to around 10 percent penetration over the next five years. This will primarily be down to DTH satellite and potentially, IPTV. The key barrier for them is piracy as well as a pretty strong [free-to-air] market.”
    Couto also highlights Malaysia as a potentially attractive market for satellite pay-TV going. “Astro is growing well in Malaysia. They are penetrating the mass market and the rural areas. There maybe some IPTV competition, but we see Astro continuing to grow. Australia and New Zealand remain strong for DTH as well with Foxtel, Austar and Sky TV, especially in terms of next-generation service growth though basic service growth will slow this year. Vietnam is also a significant opportunity for a growing DTH platform there and IPTV. Look out also for the launch of government backed DTH platforms in China this year.”
    However, DTH platforms in the region will face more competition from IPTV operators going forward. “Chunghwa has 800,000 boxes installed in [Malaysia], but only around 10 percent to 15 percent of these access pay-TV services. It is not that huge in Taiwan. I think China is interesting especially as China Telecom had made decent strides with the Shanghai Media Group in places like Shanghai though regulations and revenue share continue to limit true potential. Telekom Malaysia taking on Astro could be interesting.
    “… The notion of telcos moving up the value chain in Asia is still difficult. Now TV in Hong Kong is close to reaching breakeven. For others, it may not lead into profit. For NTT, they are expecting 1.2 million subscribers by March 2010, and that will be breakeven. So it is very exciting what is happening in Japan. NTT has relaunched and got regulatory approval to broadcast HD services over fiber to somewhat match JCom’s offer. They haven’t had the success of Now TV, but now people are getting excited about them.”
    China is another market to really keep an eye on. Michael Liu, a research analyst at IMS Research, said that because of the nature of the market, the overall global situation is unlikely to have any impact. “The Chinese digital television market has not been negatively influenced by the financial crisis at all. It’s because the analog to digital conversion process is compulsory and is set to be finished by the end of 2015. China’s digital satellite TV is forecast to develop very fast in the next several years due to relative strong government policy support. Currently in China, satellite TV is mainly used to cover rural and remote areas. Up to now, only a small part of these areas have been able to access to the digital satellite TV. The potential is huge.”