Five rays of light for the satellite sector: between price pressures and flat demand, Asia's satellite industry has seen better days. The pessimists say it will stay that way for at least the next year or two, but optimists say the slump is opening new avenues for the industry to pursue. Telecom Asia reviews five of the most talked-about new satellite service opportunities

Telecom Asia, June, 2004 by John C. Tanner

SATELLITE BROADBAND BRIGHTNESS LEVEL: ** 1/2

WHAT IS IT: Just like it says--broadband internet access through a small dish to residential customers. Some systems offer downlink-only connections, with the uplink done through a terrestrial connection (usually dial-up), but newer systems are capable of two-way connections through the dish.

THE PITCH: Terrestrial broadband is fine for markets where copper loops pass the majority of households, but for developing markets or even underdeveloped rural areas in more advanced markets, satellite technology can fill the gap quickly and more cost-efficiently than rolling out fixed lines. It also brings point-to-multipoint connection capabilities into play that terrestrial providers don't have. Satellite operators have the option of either offering services direct to end-users or offering it wholesale to resellers or partners. To date, however, most broadband satellite services are wholesale plays.

THE CATCH: Terminal costs remain a major headache, resulting in services priced high enough that either they can't compete with DSL and cable moderns, or are beyond the meager incomes of people in developing areas where DSL and cable don't exist. As with corporate VSAT, satellite's I P performance issues are a problem, particularly latency--no big deal for email and basic Web surfing, but major trouble for popular broadband apps like streaming media and gaming.

THE BRIGHT SIDE: There are indications that broadband satellite can be a positive addition to the portfolio. For example, AsiaSat's broadband subsidiary SpeedCast reported a 133% growth in turnover in Q1 this year, and narrowed its loss by 18%.

However, all eyes are on Shin Satellite's iPSTAR service, the business case of which is designed around low-cost terminals for developing markets, iPSTAR is seen by many as the test case for satellite broad-band's potential--if it succeeds and gains market acceptance, others will follow, potentially driving terminal costs down further. Standards like DVB-RCS and DOC-SIS are also expected to help drive costs down by allowing service providers to buy from multiple vendors. The technology is also advancing. The DVB-S2 coding and modulation standard--the next generation of DVB-S--promises up to 40% better satellite transponder utilization, as well as the ability to support multiple transport streams in a single modulated carrier and multiple input format (MPEG-2, MPEG-4 and HDTV, as well as generic IP and ATM streams), according to Northern Sky Research.

SATELLITE DMB BRIGHTNESS LEVEL: **

WHAT IS IT: Like DAB (digital audio broadcasting), but with video and Internet access.

THE PITCH: Satellite DMB (digital multimedia broadcasting) is the brainchild of TU Media, a company founded by Korean cellco SK Telecom and whose investors include Mobile Broadcasting Co, Samsung Electronics, LG Electronics, SBS, CJ Media and Hana Bank, among others. TU Media plans to offer 11 video channels and 28 audio and data channels, all via satellite, to subscribers using receivers installed in vehicles or specially designed mobile phones, PDAs and portable terminals. Land-based towers that broadcast at the same frequency as the satellite using EDM (code division multiplexing) and interleave technology will be used to fill in any gaps in the satellite's line-of-sight coverage.