Broadbandindia Magazine

The growth of HD Satellite operators – and everyone else with an eye on growth – still put high-definition high on their lists of wonderful things that are going to make a huge difference to their businesses – eventually. The U.S. is leading the HD way, with about 50 new HD launches in the last 12 months. Europe and Asia are following. “Viewer demand for quality images, and particularly sports, will be a driver,” says David Ball, Intelsat’s Asia Pacific vice president. Intelsat now carries more than 115 HD channels. “Once viewers have a wider choice of HD content, their preference will be for HD over standard definition (SD)… pressures will emerge on SD channels to upgrade,” Ball says.”HD is happening, as we expected,” says Measat’s COO Paul Brown-Kenyon, who has long flown the flag for HD delivery in Asia.

AsiaSat has also put HD on its “List of Things with Potential in the Medium Term”, along with IPTV, video-to-mobile, directto- home services, and mobile/internet connectivity in rural areas. AsiaSat CEO Peter Jackson isn’t so sure HD will drive an increase of satellite usage in the long term. Except, perhaps, that there will be more channels and broadcasters would be foolish to skimp on bandwidth for HD as they sometimes do for SD today. “There will be a short-term increase while broadcasters uplink in SD and HD, but with MPEG-4, the capacity used by HD will be about the same as the SD uses now, so it will all even out over time,” Jackson says, adding: “The long-term growth in satellite usage by television will rely more on channel number expansion than on the introduction of HD.”

Increasing Asian taker

Either way, the forecasts for HD channels in Asia look good. Last year, Measat commissioned a Euroconsult report that found major pay-TV operators in Asia-Pacific, Middle East and Africa expected to carry a combined 340 HD television channels by 2013. The Survey on High Definition Television in Asia found that over the next three to five years, HD bouquets would expand from between three and five channels per platform to an average of 15 channels.

Takers of new HD capacity in Asia in the past 12 months include History HD and AXN HD, both of which launched in deals with Globecast and Measat. Nat Geo  HD is also part of Measat’s HD neighbourhood, having switched from fibre delivery to Hong Kong and Singapore in the middle of last year. New pan-Asian sports player, Asia Sports Network (ASN), came on board in January, and German channel Classica HD is scheduled to be up and running by the beginning of August. This, along with HD pioneer Voom HD, brings the total number of HD channels on Measat’s platform to six. There’s at least one more contract waiting for a signature, which puts Measat pretty near the 10 channels it’s expecting on the HD bouquet by year end.

It’s the start of a neighbourhood Measat is building in the belief that critical mass and genre variety are key drivers of HD take up. Measat’s sales and marketing vice president, Terry Bleakley, says the company is as bullish as it ever was about HD prospects… provided platforms run with the HD ball. “We believe the success of HD is having an attractive enough bouquet of channels for the consumer,” Bleakley says. This means a healthy mix of movies, sports and other genres, along with more local HD content.

Industry yet to arrive

The industry isn’t there yet. But it’s happening. In Malaysia, sole satellite platform Astro is expected to head into the HD space with some of the US$190-million worth of capacity it has just bought on the Measat-3a satellite, which launches on 22 June.

In the Middle East, YahLive expects great things from HDTV. The new US$150-million venture between SES Astra and Abu Dhabi’s Al Yah Satellite  Communications launches its first satellite at end 2010, with a second in 2011. Yahsat chief executive, Jassem al-Zaabi, says he expects 100-plus HD channels in the region by 2017. “Over time HD will become the standard,” Brown-Kenyon says. Time being the operative word. Some insiders say that some of the gloss will be taken off the greatest growth story for Asia’s satellite business by one simple fact: there isn’t enough of the right kind of capacity up there right now to make the most of the appetite for HD.The soonest an all-HD mega-capacity satellite could launch (and that’s if someone steps up today, which is unlikely) is 2012 or 2013. And where there’s a gap… someone will step in to fill it. If satellite doesn’t (and it won’t if the current caution reigns), fibre will.

Not everyone agrees. Satellite operators say there’s enough capacity at the moment…and particularly with MPEG-4 technology, which will squeeze more into the same space. All they need is more programmers to fill it.

Asia’s DTH Satellite

The potential remains mind-bogglingly enormous, and not just because AsiaSat has a whole new DTH opportunity in Taiwan with its just-minted Echo Star joint venture.

In addition to Taiwan, where digital penetration is negligible, Indonesia, India and Vietnam are the region’s most sizzling DTH hot spots. Even Malaysia’s Astro, which carries 100- plus channels and says it spent RM1 billion/US$288 million on content last year, would have to add about 400 channels before it reaches the level of channels carried by DTH operators in the U.S. and the U.K. In addition, there are all the sub-regional, ethnic opportunities that are only just beginning to be explored. “The opportunities for DTH only increase as the region’s economies improve and while cable systems and broadband delivery systems will continue to expand, a DTH service can compete in every location in a country instantly and offer tiered packages to suit every income level,” AsiaSat’s Jackson says.

Indonesia’s great direct-broadcast hope, Indovision, has pinned expansion plans to the launch of new satellite ProtoStar-2, which went up successfully mid-May.  The new satellite (also known as Indostar-2) gives Indovision 13 Sband transponders, which will allow it to offer 120+ channels, not to mention save the platform currently being delivered on dying satellite Cakrawarta-1. Indovision currently has about 500,000 subscribers. Indonesia’s total pay-TV penetration is about 2% of a potential 50 million households.

If commercial services start as planned, the Indostar-2/ Protostar-2 satellite at 107.7ºE will also offer HDTV multimedia and broadband services throughout the ASEAN region.

Analysts say that while cable networks will remain dominant because of their size in the largest markets, including China, India, Japan, Korea and Taiwan, the regional share of DTH satellite will expand because of explosive growth in India as well as gains in Australasia, China, India and Vietnam.

Satellite Regulations

The Wimax spectrum has not been solved, although progress has been made in India and Malaysia where governments have agreed to protect satellite operators’ C-band spectrum. However, operators have, over the past two years or so, learned to live with the looming danger of a new technology muscling in on their C-band spectrum and are no longer looking at each other in amazement at how they failed to take notice of the danger – and more importantly to act on it – much much earlier on. “It’s important that we keep focus,” Paul Brown-Kenyon says.

Markets in Asia have been deploying Wimax and there will be issues that need to be dealt with. “Continued diligence is needed on spectrum issues,” Intelsat’s Ball says, adding that satellite operators need to keep up a dialogue with regulators “to ensure that the role and importance of satellites are understood… and that the importance of preserving our spectrum is foremost in their minds as decisions are made about national frequency allocations”.

There’s another angle to the Wimax story: the mobile industry waking up to the possibility of losing voice traffic to mobile VOIP. They’re also taking steps – including fast tracking new standards – to shore up their advantages. “Satellite operators still have to worry but at least we are dealing with a rational operator and not manufacturers just looking to sell equipment,” Jackson says.

New launches, replacements

Being able to afford replacements is a big one for satellite operators, not all of whom have the clients willing – or able – to pay what’s required. The major launches  are Measat-3a on June 22. AsiaSat 5 launches around 11 August, replacing AsiaSat-2 at 100.5ºE. AsiaSat-5C is being planned. Intelsat has 11 satellites under construction. Two will launch this year. Replacements for two Asia-Pacific satellites IS-701 (180ºE) and IS-702 (66ºE) launch in 2011, followed in 2012 by replacements for key international video distribution satellites – IS-8 (166ºE), IS-9 (58ºW) and IS-10 (68.5ºE). Intelsat is also building a new satellite at 72ºE, which will carry C- and Ku-band transponders and host a dedicated UHF payload for the Australian Defence Force.

Tom Choi has been talking about his new ABS-2 satellite for many months. Word is that he has Thales and Loral at the negotiating table while he puts the last funding pieces in place.

The end of ProtoStar, at least as we have come to know it, or, indeed, the beginning of a new ProtoStar that existing players can learn to live with if not to love. There’s no official update on the financial state of the ProtoStar- 1 satellite, which went up in the middle of last year amid a confusion of governing authorities, accusations of nonco- ordination and non-cooperation, and a storm of invective about a boy’s club that was closing ranks against newcomers.

ProtoStar CEO, Philip Father, said that the company was engaged in ongoing discussions with its lenders to restructure ProtoStar-1’s financing. He also said revenue-generation was being hampered by various factors, including “‘paper filings’ being used to stymie the legitimate presence of a competitor in the market.”

Satellite vs. Fibre

It’s fibre frenzy out there as governments all over the region – and particularly in Singapore and Australia – put national broadband networks at the top of their development priority lists. These will take fibre to 100% of homes. “Countries are throwing stimulus money at fibre – not satellites,” one analyst said.

At the same time, laying fibre to every home is not cheap. While AsiaSat’s Jackson agrees that it will happen (and that it won’t wipe out satellite demand), “I also believe that someone must pay for it,” he says. How this happens is open for debate… Devices like SlingBox will follow fibre roll outs. Content providers are likely (if they haven’t already started) to leap onto the fibre train to reduce costs, particularly for occasional services. This could mean a whole lot of satellite capacity may go empty. Happily, it’s probably not an issue for this year, but it is something that may keep satellite bosses awake at night next year and the year after.