by James Careless

This year has been better than 1998 for the Asia-Pacific satellite community, but not by much.

On the technical side, it’s been a mixed bag: Asiasat 3S and Koreasat 3 went up successfully, but Orion 3 did not. Meanwhile, the region’s business climate hasn’t improved dramatically. In fact, according to a September 2 news release from APT Satellite Holdings Ltd., "the market environment remained difficult during the first six months of 1999 and, despite shrinking satellite transponder supply in the Asia-Pacific region, the sluggish economic situation across Asia had resulted in slow demand growth."

Faced with "slow demand growth," Asia-Pacific satellite companies are looking for something to keep them alive until times improve. For its part, APT has found extra cash, thanks to a deal with Loral Space and Communications Ltd. Under the contract, APT is leasing "substantially all of Apstar 2R’s transponders to Loral for the remaining life of the satellite," says the company. "With a total lease income of $304 million, to be received over the next four years, the Group [APT] will be able to re-allocate its efforts and capital resources in developing new satellites and other satellite-based businesses."

Most other companies don’t have a Loral standing by, waiting to help them out. For these companies, some kind of "killer ap" is needed: some kind of popular, profitable application that Asia-Pacific businesses will buy now, despite the economic downturn. Fortunately, many think they’ve found such a solution through the late 20th century’s last great gold mine: the Internet.

Take Cable and Wireless HKT (CWHKT). Formerly known as Hongkong Telecom, CWHKT has been flat, says K.W. Chan, the company’s manager of broadcast and satellite services. "The economic turmoil has affected our business," he admits. That’s why CWHKT is pursuing a two-track Internet strategy, in order to turn things around.

Cable and Wireless HKT’s first tactic is to offer Internet backbone services from the Asia-Pacific to the United States. The reason: most Internet traffic is asymmetrical, with the majority of it being downloaded from the United States. As a result, it makes no sense to ship this data by symmetrical submarine cable, because so much bandwidth would be wasted on the upload path. That’s why CWHKT hopes to persuade Asia-Pacific ISPs to hook up with its satellite service, in order to give their clients fast Internet access at a reasonable cost.

The second tactic is CWHKT’s Multimedia Satellite Services. Known as "M2SS," this service can deliver multimedia content either to home users’ PCs, or corporations’ Local Area Networks (LANs).

In order to keep costs down while matching the asymmetry of Internet traffic, M2SS’s upload path is via landline, while the high bandwidth download stream is supported by satellite. Conceptually similar to Hughes’ DirecPC, M2SS covers major Asian markets, including the People’s Republic of China, Japan, Taiwan, South Korea, Indonesia, India, Pakistan, the Philippines, Malaysia and Thailand.

So has M2SS made a difference to Cable and Wireless HKT’s bottom line? Not yet. The reason: "We only installed the service in April, and are just finished trialing it," says Chan.

One thing is certain: Cable and Wireless HKT is not the only Asia-Pacific heavy-hitter banking on the Internet. So too is NTT Satellite Communications (which is owned by Nippon Telegraph and Telephone, Japan’s largest telecom company). In fact, in January 1999 NTT Satellite launched its own high speed Internet service under the name "Mega Wave."

To receive Mega Wave, users need a SkyperfecTV! satellite antenna, a CS tuner, and a dedicated Mega Wave receiver board. The advantage is that, by using this arrangement, they can receive DTH television and Internet data over the same dish, thus reducing equipment costs.

Shuichi Samejima, the president of NTT Satellite Communications, wants to sell Mega Wave both to residential and business clients. In the first market, he sees a ready acceptance of satellite technology: "Between them, SkyperfecTV! and DirecTV Japan already have 1.7 million subscribers, and the number is growing," says Samejima. In the second, he expects business to be impressed by Mega Wave’s 30 Mbps of bandwidth. Small wonder: even when shared among many customers, that’s enough room to let multimedia files literally zoom into PCs.

Given this capacity, Shuichi Samejima hopes to sell Mega Wave both to major chains and small corner stores. In fact, he sees a real opportunity for the latter. The reason: unlike North America, Japanese people aren’t accustomed to paying by mail or phone. Instead, they prefer to head down to their local store to pay everything from telephone to tax bills. As a result, these stores can use the kind of data transmission support offered by Mega Wave; more than their North American counterparts, in fact.

As a result, NTT Satellite’s president has high hopes for Mega Wave. This despite the fact "the VSAT business has not really been successful here compared to other parts of the world," Samejima says. That’s because Japan’s terrestrial networks are good enough to persuade many businesses to stay out of the sky, and on the phone instead.

However, Samejima sees a different future for satellite Internet broadcasting. Because of the Web’s asymmetrical traffic patterns, "It’s more appropriate to send Internet content by multicasting," he says. Better yet, "Satellite is a good way to convey these contents to where they’re needed, nationwide."

Skystream Corp. also sees a big future for satellite-delivered Internet content. It’s got good reason: on October 18, 1999, the California-based broadband solutions provider announced a deal with TPG Internet, one of Australia’s largest ISPs.

According to Clint Chao, Skystream’s vice president of marketing, TPG will be using Skystream’s networking platform to beam U.S.-based Internet content directly from California’s Napa Valley to TPG offices across Australia. It will then be stored on TPG’s own servers; from there, TPG subscribers can access the U.S. data they want, without the delays and bottlenecks of doing so directly.

Since 75 percent of the Internet’s content is currently U.S.-produced, such high-speed satellite links make good sense in the Asia-Pacific, says Chao. Also helpful is the fact that "the Asian population is very Internet-savvy, and they’re beckoning for Internet content," he says. As a result, Chao is expecting Skystream to do well in the Asia-Pacific market.

Michael Smith feels the same way about Telstra’s new "Minisat Multimedia" product. In essence, Minisat is a laptop-sized, 10 pound portable satellite terminal that can deliver up to 64 kbps of data: that’s ISDN speed, anywhere in the world.

This may not sound like much to people accustomed to T1 satellite connections, or those who live in big, well-wired cities. But, in Australia, Minisat makes great sense, says Smith, general manager of Telstra Global Satellite. "Australia is one of the most remote places on earth," he explains. With most of the population clustered around its shores, and the interior very sparsely populated, there are many Australians living "literally hundreds of miles away from any form of telephone service."

One ironic note: unlike Cable and Wireless HKT and NTT Satellite, Telstra didn’t launch Minisat to offset the Asian financial meltdown. In fact, Australia "has weathered the Asian crisis superbly," says Smith. "We’ve continued to grow strongly through the crisis, and we haven’t seen much impact."

But is the Internet really such a hot business prospect? Or are Asia-Pacific satellite companies merely kidding themselves as they try to weather the region’s financial woes?

Answering this definitively is impossible: no one can predict an economy’s future, especially in the Asia-Pacific.

However, there’s no denying that the Internet is hot, and that people here-as Clint Chao says-are "Internet-savvy." That’s why it’s probably the satellite industry’s best chance for survival, whatever the risks. After all, no company can afford to sit still, even in bad times. To keep the cash flow going now, and to ensure future prosperity when things improve, businesses have to keep going and growing.

James Careless is a contributing writer to Via Satellite.