Satellites

'Satellite-based communications still has an advantage and can reach to areas where fibre leaves gaps' : N Sampath - PanAmSat India managing director

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/smartcrop_800x800/public/images/satellites-images/2016/01/04/N%20Sampath.jpg?itok=hTufUqG4

A wave of consolidation is sweeping the satellite sector. The latest in a series of mergers and acquisitions is the announcement that Intelsat Ltd. would buy PanAmSat Holding Corporation in an all-cash deal for $3.2 billion, to create the largest satellite company with a combined fleet of 53 satellites and an annual revenue of more than $1.9 billion.



So will the satellite operators head for more mergers and acquisitions? In an interview with
Indiantelevision.com‘s Sibabrata Das, PanAmSat India managing director N Sampath discusses the opportunities that come along with consolidation and the challenges that the satellite industry faces as fibre-based communications become competitive.

Sampath spent 29 years at the Indian Space and Research Organisation (ISRO). He created and operated Antrix Corporation as its chief executive till 2001 before joining PanAmSat India. He was responsible in establishing PanAmSat platform as a leading "neighbourhood" satellite for India, with major TV channels like Sony and NDTV as its customers.



Sampath believes satellite operators will not face a slump in demand on the video side. New technologies and competition will, however, make it necessary for the satellite operators to cater to new segments of market which they need to nurture, he says.



Excerpts of the interview.

Why is the commercial satellite industry rife with merger activity over the last few years?

Consolidation helps in reducing unhealthy competition. But the first and main objective is to get into new areas and complement needs. Intelsat, for instance, acquired some operational satellites from Loral to gain early entry into North America. It got access to the video and data markets in that territory. Similarly, PanAmSat acquired Europe*Star to increase presence in Europe and the Middle East. If some satellite company shows interest in merging with New Skies Satellites (NSS), it will be because it has a presence in Australia, Asia and South America. Same is the case with Eutelsat which has a strong presence in Europe. Satellite operators will have to find a match and fill in the gaps where they don‘t operate or in areas where their services are weak.

What is the combined strength that the Intelsat and PanAmSat merger will bring?

I can‘t comment on that. But very briefly PanAMSat‘s main strength is in video business. More than one-third of the global video channels are on PanAmSat. Intelsat, on the other hand, has historically been focussed on telecom circuits. By pooling resources together, the satellite industry can emerge stronger.

But isn‘t the industry shadowed by too many players in a market that is not growing too fast?

Excessive competition meant that too much money couldn‘t be made and many of the smaller players couldn‘t survive. Anticipating demand for satellites has also not been an easy task. The industry is in a continuous state of flux. Under the circumstances, there is a consolidation taking place among the satellite service operators.

Are you referring to a build up of overcapacity?

We saw such a situation in the late ‘90s. In the Asia Pacific region, three satellites were launched with India in focus. In those days, the charge per Ku-band transponder was as high as $four million a year, making it lucrative for the satellite companies. Suddenly, there were about 30-40 transponders over India. PanAmSat launched PAS-7 which had eight Ku-band transponders directed at India. Eurostar and GE1 also built similar capacities. India was a growing economy, there was an expanding middle class population, and the appetite for television channels was enormous. All of us thought that direct-to-home (DTH) would happen automatically in India. It was a perfectly acceptable logic. But the hype didn‘t work. The procedures for direct-to-home (DTH) licensing in India were not clear. So capacity was created but there was no demand.

How did it hit the satellite operators?

The satellite operators switched beams to other areas, wherever possible. PAS-7 got fully utilised by directing the beams to Africa. Eurostar switched from Asia to Europe for data and IP services. GE1 used up that capacity for VSATs. New Skies Satellites (NSS) was lucky in that ISRO (Indian Space Research Organisation) allowed Indian DTH players Doordarshan and Dish TV for temporary use of NSS-6 satellite. Now the capacity on that satellite is full.

 
‘Satellite operators will have to cater to a different segment of market and nurture them‘

What could have made ISRO decide on NSS?

No other satellite was available with that kind of capacity. And Indian procedures require Indian owned satellites for DTH operations, implying that ISRO would make the decision on the satellite which the service providers would have to use. But building that capacity for a short term purpose can turn out to be a waste for a satellite operator. In this kind of business, you need a long term comfort. The fact is that after the investments commercial satellite operators made in the late ‘90s in the Asia Pacific region, they have made no specific plan for creating Ku-band capacity with India in focus. In the last four years, there has been no fresh investment towards this and no new satellite launches. After the government opened up DTH, there would have been an interest from international players. But the regulatory requirement has space for only Indian satellites.

Do you feel that DTH operators in India will face a satellite crunch?

With so many DTH licenses, the real issue has to be availability of capacity. While in a normal condition the DTH operator would plan its space segment requirement as it grows, in India the capacity crunch seems to be the main problem.

Are satellite operators facing threat from transoceanic and transcontinental fibre networks?

Point-to-point fibre communications has become cheaper because of consolidation and over investments in the sector. These service providers can offer at low cost. The India-US communications network, which was offering opportunity for satellite, is today largely being taken over by fibre. But satellite-based communications still has an advantage and can reach to areas where fibre leaves gaps. Even in the US where terrestrial communications is so spread out, there is demand for satellite. Almost 50 per cent of the VSAT market is in the US.

Would you agree that there is a slump in demand for satellite services?

In the telecom space, the nature of demand may have changed. It may not be economical for large volume of traffic from city to city on a point-to-point service. But there is still a number of small volume requirements for satellite space. It is important to realise that the telecom market has shifted to some extent and there are a number of small volume users. Satellite operators will have to cater to a different segment of market and nurture them.

And on the broadcasting side?

On the video side, it may seem that there is a slump in demand. But actually there is no real reduction in demand. The bandwidth requirement may have come down as channels increasingly move from analogue to digital. MPEG-4 technology, when it becomes popular, will also be able to further compress in more channels. But high-definition TV, which is growing in the US, will require more bandwidth. We expect that to happen in the Asian region as well. This will generate new demand. Video service through satellite will not be significantly affected.

What about data transfer?

Even for data transfer through fibre, there is need to have a back up arrangement through satellite.

Do you think satellites specially designed for broadband communications applications like Thaicom‘s IPStar will be successful?

IP demand has not picked up as was originally expected. We don‘t know how IPStar will fare. We will have to wait and see.

What are the new initiatives PanAmSat is taking to tap new technologies?

One of the new initiatives PanAmSat is working on is the delivery of the video signals through telecom network. The telecom network is available in all homes, compared to DTH and cable. Delivery of video content, video-on-demand and other value-added services is of major interest to the US telecom companies. We are discussing this opportunity with many of the international channels. We are working with the major telcos in the US and the channels to make this become a reality.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/21/rocket.jpg?itok=svJ2aIUI
ISRO to double annual satellite launch

NEW DELHI: The Indian Space Research Organisation (ISRO) plans to increase its satellite capacity by upping launches from next year to keep pace with demands from users and is also releasing request for proposals (RFP) for 30 satellites, top Indian government officials said.

Satellites Satellite Launches
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/09/04/teleport.jpg?itok=-BS19KKl
Intelsat signs distribution contract with Indian teleport operator

MUMBAI: Intelsat S.A., an operator of the globalised network and leader in integrated satellite communications, and LAMHAS, a teleport operator in India, have announced a multi-year agreement for satellite services supporting media distribution in India via the Intelsat 20 satellite.

Satellites Teleports
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/08/31/Satellite1_0.jpg?itok=rcdME4E7
Private sector enters satellite building with 'IRNSS replacement' launch today

MUMBAI: India's success in space exploration has been growing tremendously. One of the seven satellites in the constellation, as three rubidium atomic clocks on board had stopped functioning, the IRNSS- 1H satellite, weighing 1,425kg, will be launched from the second launch pad of the Satish...

Satellites Satellite Launches
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/08/16/Barrie_Woolston-Graham_Warren.jpg?itok=_QGtMB9i
AsiaSat 5 & Eurovision to deliver Taipei event in 4K & HD from 19 Aug

MUMBAI: Eurovision Media Services, in collaboration with its long-term satellite partner, Asia Satellite Telecommunications Company Limited (AsiaSat), will use AsiaSat 5 to deliver the Taipei 2017 Universiade across the Asia Pacific.

Satellites Satellite Operators
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/08/03/url.jpg?itok=lFHP9hx2
15 operational sats for communication, 26 under development

NEW DELHI: Fifteen of the 42 currently operational satellites are being utilised to meet the requirements of the communication industry, the minister of state in the department of space Jitendra Singh has said. Singh told the Parliament that the operational satellites in orbit comprise 18 earth...

Satellites Satellite Operators
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/08/01/andrew.jpg?itok=e86OLpvB
AsiaSat 9 set for 28 September launch

AsiaSat 9, AsiaSat’s most powerful satellite, is set for launch on 28 September Moscow time 09:50pm (29 September Baikonur time 00:50am, Hong Kong time 2:50am) on a Proton M/Breeze M rocket from Baikonur Cosmodrome, Kazakhstan, after being in storage at Space Systems Loral’s facility with its Pre-...

Satellites Satellite Operators
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/07/28/url.jpg?itok=E6E83tG1
Communication facilities increased with 7 satellites in last 3 years

NEW DELHI: Satellite Communication capability was augmented with seven more satellites in the last three years with GSAT-6, GSAT-9, GSAT-15, GSAT-16, GSAT-17, GSAT-18, and GSAT-19. Another major achievement since June 2014 has been the realisation of South Asia Satellite to enable South Asian...

Satellites Satellite Operators
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/07/21/PSLV%20satellites.jpg?itok=sXnvEpvj
Transponder leasing yields Rs 7.5 bn for communication satellites

NEW DELHI: Communication satellites earned revenue of Rs 7.4668 billion through leasing of INSAT/ GSAT transponders in 2016-17.

Satellites Satellite Operators
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/07/20/Jitendra%20Singh.jpg?itok=YnOXPneY
GSAT 17 to be inducted into INSAT/GSAT system after tests

NEW DELHI: The GSAT-17 launched last month is undergoing in-orbit tests after which it will be inducted into the INSAT/GSAT system for providing various communication services to the country in C, Extended-C and S-band. The communication satellite, with a lift-off mass of 3477 Kg - carrying...

Satellites Satellite Launches

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories