iPSTAR Adds Clients in Korea and Japan: Deals Will Earn Shin Unit B2bn Per Year
By Komsan Tortermvasana, Bangkok Post, Thailand
Jun. 8–Shin Satellite is expanding its satellite broadband services to Korea and Japan after recently signing a deal with a leading VSAT operator in Korea and finalising another this month with Japan’s leading fixed and mobile phone operator.
The SET-listed satellite affiliate of Shin Corporation said that the two agreements should help the company earn two billion baht in revenue annually once full-scale services are provided.
Shin Satellite signed a deal with Korea’s OCL to invest in an iPSTAR gateway in Korea using spot-beam technology, said a Shin Corporation executive speaking on condition of anonymity. Spot-beam technology is suitable for covering a relatively small portion of the earth’s surface, such as South Korea.
Shin Satellite would invest in the gateway by itself because it has all the needed equipment already and the investment was relatively small, only about US$10 million, he said.
OCL has an operating licence and will help Shin Satellite with technical support as well as negotiating any policy matters with the Seoul government, the executive added.
On co-operation with Japan, the executive said Shin Satellite would enter an agreement with one of the top three fixed-line and mobile phone operators. But the size would be bigger due to the larger area and capacity.
Shin Satellite provided satellite bandwidth of 600-700 Mbps in the South Korean market, he said. But in Japan where demand is high, one gateway would provide three spot beams with bandwidth of 3,000 Mbps.
Shin Satellite had been negotiating with at least seven operators in Korea and finally chose OCL.
In the third quarter, Shin Satellite plans deals in Malaysia, Indonesia, the Philippines and Taiwan. Satellite broadband services in Korea and Japan will cover telecom and broadcasting, the executive said.
For telecoms, Shin Satellite hoped to eat away at VSAT service since it covers more than 10,000 spots nationwide. The satellite broadband could serve as a backup for VSAT because the cost of iPSTAR solutions is low and can supplement the VSAT system in case of a natural disaster, he said.
Japan already has a backup system called Local Administration Satellite Communication, or Lascom, to be used in case of a natural disaster, he said.
As for broadcast, the executive said that iPSTAR satellite broadband could also provide cable distribution on Internet protocol and satellite news gathering. Although the quality of pictures would not be on par with that of television broadcasting from mobile trucks, it could support the service at a cheap price.
Revenue from broadband service in Korea and Japan would be about 100 million baht a year. After full-scale services begin, the Korean market would generate 500 million baht a year, while Japan would contribute more than 1.5 billion baht a year.
Revenue from both markets would contribute positively to Shin Satellite from next year, he said. All markets have room to accommodate Shin Satellite’s broadband service.
Although Korea is the world’s top user of broadband services, 0.5 percent, or 50,000 households, still do not have broadband connections.
Shin Satellite reported 6.8 billion baht in revenue last year and 20 million baht in total debts. This was before it sold a 49 percent stake in its Lao and Cambodian operations to a unit of Temasek Holdings for $200 million.
Shin Satellite shares yesterday edged up 10 satang on the SET to 11.80 baht in trade worth 302 million baht.
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