[Satellite News 06-26-09] SES is looking to increase capacity to serve a lucrative Asian market, with highly populated countries like Indonesia and India proving to be potentially strong growth opportunities for satellite operators looking to bring a new wave of digital services to households, SES CEO Romain Bausch told Satellite News.
    Bausch outlined his company’s plans for the region, including its vision for the development of the 108.2 degrees East orbital slot to meet the region’s growing demand for direct-to-home (DTH) services, cellular backhaul and corporate networking.

Satellite News: How are you expanding your capacity in Asia to meet your customer demands?

Bausch: In addition to the four satellites in orbit, we have planned for this year two spacecraft to be launched that will serve Asia. The first one, NSS-9, has already been launched. This is replacing NSS-5 in the Pacific Ocean region. NSS-5 will move to 57 degrees East, where we will launch NSS-12 in the third quarter of this year. At the 57 degrees East position, we currently have NSS-703. We will have NSS-5 to support that and then we will have a smooth transition to NSS-12. NSS-12 will add 30 transponders at the 57 degrees East orbital position. NSS-9 is not adding capacity, as it is a C-band only satellite. It has replaced NSS-5, which was a C- and Ku-band satellite. Combined, NSS-9 and NSS-12 will add in total some 20 transponders to the Asian market. The number of transponders is growing from 168 to 190 in Asia.

Satellite News: How much capacity do you hope to have sold on NSS-12 at launch?

Bausch: NSS-12 will basically be pre-sold at launch. We are still negotiating with some customers, but there is such a huge demand that we have to make up our minds sooner rather than later what markets we want to serve. We have to decide if we want to operate more capacity in the Indian beam or whether we will operate the central Asia beam over Kazakhstan. There is such strong demand coming from customers out of each of these beams. India is definitely very high on our agenda. First, we have two DTH platforms in India on our satellites — one on the NSS-6 and the other on NSS-11. NSS-12 can also serve India. If you take India, it is definitely DTH, which will be the main growth driver. By 2012, we expect that there will be more than 20 million DTH viewers in India. That is definitely one priority. Markets such as Indonesia and the Philippines also show strong demand for DTH. We are confident that 12 months after launch, all of NSS-12 capacity will be commercially used.

Satellite News: In terms of market segments, what services, other than DTH, do you think show strong potential?

Bausch: In India, for example, we have established an important VSAT neighborhood with the NSS-11 satellite. It is commercialized by Antrix, the satellite arm of ISRO (the Indian Space Research Organization). We have currently more than 60,000 VSATs pointed to the NSS-11 satellite in India. There is strong demand from ISRO for more capacity. This is leading us to a clear roadmap where we want to operate a second satellite at 108.2 degrees East to be co-located with NSS-11 in order to be able to offer more capacity at this orbital position. The demand is coming from DTH and VSATs in India as well as from Southeast Asia, where there is also strong demand for cellular backhaul.

Satellite News: Are there plans to develop a second satellite at the 108.2 degrees position?

Bausch: We are actively considering investing in a second satellite for this position. If we start the procurement of the satellite soon, it will be available in 2011-2012. When we are looking at future opportunities, we are also always looking at potential acquisitions to achieve the same objective. There is an acquisition opportunity we are also looking at, but at the end of the day, we will go for the most efficient use of our capital expenditure for this investment, and we want to take a decision sooner rather than later.

Satellite News: Does SES really need to ramp up the capacity available in Asia?

Bausch: We are looking at other opportunities for the Asian market, not just at 108.2 degrees East. We have plans at other orbital positions that have been coordinated for SES. We can also work with other operators. If you look at our current capital expenditure program, we are adding more than 200 additional transponders on the nine satellites under procurement. We are speaking about incremental capacity here. The vast majority of these transponders are going into the emerging markets, with the rest going into Western Europe and North America. This shows that there is a rebalancing going on by adding more capacity to the emerging markets and not adding as much capacity to established markets. In our group, we really putting a high focus on New Skies. If you look at the growth forecasts between 2008 and 2016, there is 3.5 percent growth in demand each year globally, where as for Asia it is around five percent each year. You see the same high growth rates in the Middle East, Africa and Latin America also.
    It is very clear that in our business, the growth potential is in emerging markets. The risk is that too many other operators come to the same conclusion and they are putting too much capacity into orbit. We have to be careful that we are not putting too much capacity in these markets. I would say the most sensitive one is not Asia. The Middle East and Africa are more sensitive as so many believe this is the next bonanza. With the NigComSat satellites for example, they are only providing coverage in Nigeria and neighboring countries. The number of transponders is one thing, but you have to look behind the story as to what that capacity provides.

Satellite News: Has the regulatory situation improved in some of Asia’s key markets to prevent putting too much capacity in play?

Bausch: What is important above all — and this is not specific to Asia — is that recent statements by the ITU (International Telecommunications Union) indicate they are taking a firm position when it comes to canceling filings that are claiming to introduce new satellites, but then does not happen. The geostationary arc is quite crowded with so-called’paper satellites. It is getting more and more difficult to coordinate capacity because of these filings. It is of high importance that the ITU is really enforcing a more strict control of what is declared to have been put into use. It is often done by national regulators, which makes things more difficult as they bring a political dimension to these filings, but these paper filings do not benefit the industry.