2008: During the past year, Asia Broadcast Satellite (ABS) witnessed unprecedented business growth in several areas. Satellite use increased from 50 to 95 percent and satellite coverage on ABS-1 satellite increased to more than 100 channels. This resulted in ABS becoming one of the top satellite distribution platforms for CATV distribution in the Indian Ocean Region.

ABS invested more than $5M in teleport facilities for video and data distribution services, as well as in MCPC platforms to access the ABS-1 satellite from Germany and Hong Kong. MPEG-2/DVB-S as well as MPEG-4/DVB-S2 was employed for standard definition (SD) and high definition (HD) video distribution for customers. From the orbital position at 75 degrees E, four-fifths of the world’s population can access this service, which brings significant value to ABS customers.

ABS has also been working diligently to complete the financing work for their next new satellite, ABS-2. The new satellite will be co-located at the 75 degrees E location with ABS-1 and will feature more than 70 transponders (composed of C- and Ku-band). Dedicated beams will serve southeast Asia, India, Russia, the Middle East and Africa, with significant power to support DTH services in these markets. ABS-2 will also perform as an in-orbit spare and back up for ABS-1. The Company is reviewing the final proposals from the satellite manufacturing industry for ABS-2 and is negotiating the procurement contract. An announcement as to the contract award should be made sometime during Q4 of 2008, with in-orbit delivery by 2011. The new high-powered satellite project investment will be close to $300M, definitely the most significant development for ABS.

During the past year, ABS noted significant growth in leasing capacity to customers. Contracts for more than 20 transponders were executed with various customers. As a young satellite operator, one of the biggest challenges in ABS’ expansion was ensuring the ground facilities were in place to provide traffic to these transponders — most teleport operators’ antennas could not see ABS-1. This was also an issue for many video customers as ABS had a very small number of CATV networks downlinking from their satellite.

Building uplinks to the spacecraft was paramount to the Company’s ability to quickly ramp up their utilization rates. A major infrastructure development project was initiated, which resulted in two teleports, one in Germany, and one in Hong Kong. ABS also invested in various VSAT and MCPC platforms, including the set up and installation of ground facilities to further accelerate capacity adoption. Nearly $5M USD was invested in these projects, resulting in delivered returns of 20 percent quarter-on-quarter growth over the first eight operational quarters and a 95 percent utilization rate experienced today. As the video business on the Company’s C-band beam is growing, ABS will be embarking on a major dish-seeding program in 2009 to support major CATV operators in India and Southeast Asia to receive ABS-1 signals.

A recent development for ABS was the signing of a multi-year contract with ITV Global Entertainment to broadcast Granada TV channel across Asia on the C-band MCPC platform on the ABS-1 Satellite. The Company will provide equipment co-location, encoding, encryption, uplink, and satellite bandwidth services to ITV. Granada TV, a new general entertainment channel for Asia, will offer programs from their extensive library, including contemporary dramas, reality shows, talk and entertainment shows as well as and many programs never seen before in Asia. Granada TV debuted in November as a full channel on ABS-1 satellite.

2009: There can be little question the satellite market in Asia will continue to be a fiercely competitive landscape, especially with the emergence of new domestic operators as well as other regional operators entering the market. The CATV distribution market is being fragmented on domestic/local levels, and the days of paying premium for one or two satellite positions for a pan-Asian distribution will diminish over time.

The IP-backbone market will continue to dwindle and will simultaneously result in low revenue yields per transponder due to increasing competition from fiber. The cellular backhaul market segments will stay strong and may well grow in the intermediate future. However, this segment too will be substituted with domestic fiber and microwave links. ABS will strive to be competitive in the local video distribution markets for both CATV and DTH services while seeking profitable niches in serving our customers in the data communications services sector.

ABS already has more than 100 CATV and DTH channels on ABS-1, with most of these channels coming online over the past 24 months. The Company is planning to expand this by a factor of 150 percent in the next 24 months. In example, ABS recently announced the launch of an ITV channel on the C-band MCPC platform, with additional distribution deals with major global broadcasters to be announced soon.

ABS boasts one of the largest Ku-band VSAT networks in Asia Pacific and they will soon be launching a service for broadcasters to deliver their programming to IPTV and Mobile operators. This will support a low-cost and low risk method in order to reach these emerging and growing market segments for the broadcast community.

As the capacity on ABS-1 remains extremely tight, the Company will be leasing capacity from other satellite operators (until the launch of ABS-2) with whom they have good business relationships, in order to offer value added services in a few key Asian countries. This will rollout initially in Indonesia, the largest satellite market in Asia outside of China and India. Certainly the years 2006 to 2008 were filled with the frantic growth of capacity sales — the years of 2009 and 2010 will be all about growth of value added services.

About the author
Thomas Choi is the Chief Executive Officer of Asia Broadcast Satellite (ABS) and has lead the Company to the industry leading current 90 percent utilization rate of its transponders. With more than 18 years of experience in aerospace and satellite telecommunications, Mr. Choi is recognized as one of Asia’s leading authorities in the industry. As well as the day-to-day management of ABS, Tom is deeply involved in new business development and enhancing the company’s products and services, including the development of its new satellite initiative ABS-2 to be launched in 2011.

About the company
Asia Broadcast Satellite (ABS) was established to meet the demands of broadcast and telecommunications operators in the Indian Ocean Region. In September 2006, with major shareholder Citigroup Venture Capital International (CVCI) and the financial backing of Asia Debt Management Capital (ADM Capital), ABS was able to successfully conclude the acquisition of the Lockheed Martin Intersputnik (LMI) satellite operator from Lockheed Martin. Since the acquisition, the LMI company has been renamed Asia Broadcast Satellite Limited (ABS) and the LMI-1 satellite has been renamed ABS-1 satellite. Headquartered in Hong Kong, ABS serves a global customer base with representatives in Asia, the Middle East, Europe and North America. ABS offers a complete range of End-to-End solutions including Direct to Home (DTH) and Cable TV distribution (CATV), Cellular Backhaul, VSAT, and Internet Backbone services with diverse IP transit through its European and Asian Internet gateways. ABS currently host more than 90 channels on ABS-1, making it as one of the fastest growing and top satellite distribution platform for CATV distribution in the Indian Ocean Region.