The Asia-Pacific regions a strong market for satellite companies continue, particularly in the broadcast sector, where DTH subscriber growth is strong.
     “The market for DTH pay-TV in the Asia-Pacific is growing at a significant pace again, buoyed by large scale DTH deployment in India and robust growth in Malaysia, Indonesia and the Philippines,” says Vivek Couto, executive director, Media Partners Asia (MPA). “Markets such as Japan and Korea are large for DTH but seeing flat growth, though platforms are also looking to build some sort of future by combining or partnering with IPTV.”
     Couto expects DTH to dominate in many markets in Asia. “In strong media consumer markets, where broadband plays a limited role or cable and fixed telecom infrastructure is limited so far or where the satellite player controls and invests in content, DTH satellite remains dominant and will remain so over the medium term. Markets such as Malaysia and Indonesia fall into this category. In other markets, notably India, the Philippines and Vietnam, DTH growth is being primarily driven by well capitalized operators competing with cable incumbents, both striving to aggressively acquire subscribers. A large scale DTH platform is also being rolled out in China, targeting rural areas, though this will be more of a free or utility play.”
     In terms of the actual subscriber growth, Couto says, “In 2009, the total market for DTH in Asia reached approximately 31 million subscribers, with India contributing more than 50 percent to the total. MPA projections indicate that total DTH subs will grow to 74 million by 2014. India will continue to remain a vital market; China, Malaysia, Indonesia, Vietnam and the Philippines will also be more important in the mix, along with Australasia. We do not see significant upside to platforms in Japan and Korea in terms of basic subscriber growth. The focus in these markets will be transitioning to HDTV and launching future value drivers such as 3-D TV.”
     The market for pay-TV is only likely to go from strength to strength. “Going forward, forecasts from MPA suggest that more than 460 million households will be receiving pay-TV in the region by 2015, about 56 percent penetration,” says Couto. “The future growth of the basic pay-TV product still has lots of legs in India, Malaysia, Indonesia, Vietnam, and if certain dynamics sort of themselves out, markets such as the Philippines and Thailand. These are markets in which viewing is actually increasing every day, sometimes more on the terrestrial dial, but pay-TV is also benefiting and in places where over-the-top, mobility or online is potentially a threat, operators are innovating to co-opt the future and over this year, we’ll see the launch of the integrated broadband/pay-TV media services, starting in Australia and Malaysia.”
     Significant revenues are now being generated from satellite broadcasting. “MPA analysis indicates that the top 20 DTH satellite pay-TV operators generated approximately $5 billion in sales during 2009 with EBITDA profits of approximately $0.9 billion., a modest 18 percent margin. Profits are somewhat depleted and margins compressed due to the steep curve of subscriber acquisition costs in the Indian market in particular, where six DTH operators lost a combined $464 million at the EBITDA level. Encouragingly, stronger business models and some level of consolidation in India will mean that four of the six DTH platforms in that market will start making money at the EBITDA level by 2014. Meanwhile, we see DTH profits growing to significant volumes in Australasia, Malaysia and Indonesia, while Japan and Korea will also see some growth, though margins will remain relatively modest.”
     While there is a lot of talk of when 3-D TV will make an impact in the region, it still relatively early days for HD, with many DTH platforms yet to launch HD services. In terms of the impact, HD is having in the region, Couto says, “Our forecasts indicate that APAC digital pay-TV subscription revenues grew 25 percent in 2009 to reach $13.6 billion, with HDTV contributing $1.8 bilion with HD subs at 7 million. MPA forecasts indicate that HDTV pay-TV adoption will grow to 37 million homes by 2014 with Australasia, China, India, Japan, Korea, Taiwan, Malaysia and the Philippines proving the major geographies.”