42 APSCC Quarterly Newsletter

SATELLITE TRENDS

Asia's Lion of Satellite BroadbandRichard Theodor Kusiolek, Senior Director, JP Technologies Pte, Ltd.

Malaysia has miraculously transformed itself from a

mainly rural society to an export-driven economy

launched by satellite/space technology, knowledge-

based and capital intensive industries. The corner-

stone of this economic miracle has become MEASAT,

a privately-held satellite broadband services

corporation located in Kuala Lumpur, Malaysia.

Broadband Satellite ServicesThe global average for transponder fill rates grew

from 58% in 2004 to 70% by 2007. In South Asia,

transponder fill rates for Ku-band capacity that

could be used for DTH services continued to increase

and according to Northern Sky Research will reach a

high of 82% in 2009. But supply will grow at a faster

rate than demand from 2010 through 2012 and the

average rate will drop to 70% in 2012.

The worldwide markets for Broadband Satellite

Services are rapidly growing. Asia-Pacific in particular

is showing a leadership position. MEASAT is demon-

strating that it is becoming an innovative and vision-

ary broadband satellite services organization. Over 180

companies are either key and niche players worldwide

such as AsiaSat, Crawford Communications, Eutelsat

Communications, Globecomm Systems, Inc., Hughes

Network Systems, Intelsat, KT, Loral Space &

Communications, Telesat, Optus, Satlynx, SES SA, SES

ASTRA S.A., SES WORLD SKIES, Skyway.Net GmbH, SKY

Perfect JSAT, Spacenet., Tachyon Networks, Thaicom

Public Company Limited, IPSTAR Co, Ltd, ViaSat, and

WildBlue Communications.

During my half day meeting with the MEASAT staff, I

toured the modern Teleport and Broadcast centerMEASAT Teleport and BroadcastCentre in Cyberjaya, Malaysia

Phot

o Cr

edits

: MEA

SAT

JANUARY 2010 43

facility located outside of the downtown area of

Kuala Lumpur called Cyberjaya. The engineers that I

met were not only well trained but eager to demon-

strate why their organization had the environment

for them to excel. I met Dr. Ali R. Ebadi, Measat’s

Senior VP of Satellite Development. His level of

technical knowledge was impressive. Terry Bleakley,

who joined MEASAT in 2007, originated from New

Zealand and now serves as the Vice President of

Commercial Operations. Terry had an extensive

knowledge within the broadband alliances that

MEASAT was crafting to expand the economic

growth of MEASAT.

MEASAT provides the backbone communication for

the regions infrastructure for DTH pay platforms and

telecommunication operators. MEASAT operates a

fleet of dual C- and Ku-band three orbital slots and

can provide satellite capacity to over 145 countries

across Asia-Pacific, Middle-East, Africa, Europe, and

Australia. The C- and Ku-band Satellite Fleet consist

of MEASAT -3a (91.5 degrees East) MEASAT -3 (91.5

degrees East), MEASAT-2 (148 degrees East), and

AFRICASAT-1 (46.0 East degrees). Broadcast services

consist of DTH Television, SNG, Broadcast Distribu-

tion, Video Playout/Uplink, and HD. Telecommuni-

cation Services that are provided are VSAT services,

Remote Telephony, Co-location, Disaster Recovery,

and IP over Satellite Transit (iPOST). The Co-location

facility is high secured and maintained with

advanced connectivity capabilities.

I was then to meet and interview the “Lion of Asia’s

Broadband Satellite Services” who has been behind

the growth of MEASAT; namely, Paul Brown-Kenyon,

the Chief Operating Officer. Paul entered the confer-

ence room and we had a very cordial discussion. Paul

joined MEASAT in 2003 and rose to his current

position in 2004. Prior to joining MEASAT, Paul was

with McKinney & Company for six years in their

Singapore, Hong Kong, and Stamford Connecticut,

US. Paul graduated from Yale School of Manage-

ment with an MBA, an MA (Oxon) in Engineering

Economics and Management from Hertford College,

University of Oxford, UK. The following are my

questions to some key points:

Paul, do you see a rebound in the commercial

satellite business? If not now, when will it come?

We continue to see robust demand across our key

markets in Asia and Africa driven by continued

de-regulation and underlying economic growth. For

MEASAT, this is being driven by growth in the PayTV

sector. As an example of this growth, in 2005, ASTRO

— our Malaysian DTH customer — was leasing four

transponders from MEASAT for its platform. Today it

is leasing 18 transponders across two satellites.

This growth is being matched in our video distri-

bution business where we have expanded the reach

of our network to 140 countries and developed

MEASAT-3 / MEASAT-3a into a key Asian video

distribution platform, especially for HD content.

What per cent of market share do you have now and

what are your projections in the next 3 years?

MEASAT focuses on three key market segments: The

Malaysian ICT sector where we aspire to be the

satellite operator of choice; the Asian video segment,

where we seek to be one of the top three operators

in the region; and, the African region where today

we are looking to be a provider of general satellite

services. While it is difficult to provide market share

projections, I think we are in a good position today

and expect that position to strengthen over time.

All of your satellites were manufactured and

launched abroad, when do you expect that

Malaysia’s Space Agency will have the capability to

build satellites and rockets, as well as launching

them here in Malaysia?

The Malaysian Space Agency has high aspirations.

They have stated on a number of occasions of their

intention to design, manufacture and launch a

geostationary communication satellite. Working with

Astronautic Technology Sdn Bhd (ATSB), the country

44 APSCC Quarterly Newsletter

has already demonstrated the capability to design

and manufacture microsatellites for sensing and

remote monitoring applications. We expect this

capability to increase over time.

When are you planning to launch your next satellite

for the expanding African market?

We have two slots that provide excellent coverage of

the African region and are in active discussions with

partners over their development. We expect to be

able to announce concrete plans prior to the end of

2009.

MEASAT is a private company but works closely with

the Malaysian Government. How do you balance

these two different organizational structures?

MEASAT is a publically listed company listed on the

Main Board of Bursa Malaysia. We operate as a

commercial entity, supporting both private sector

and public sectors in Malaysian and across the

region. As with any customer segmentation, differ-

ent types of customers have different requirements.

Our organization is set up to meet these differing

requirements.

Does over capacity currently exist? Have you reached

your goal this year in high margins and high utiliza-

tion rates? How do you compare your transponder

prices with your competitors?

We do not believe that there is over-capacity in the

region at this time for the prime satellites in the

prime orbital slots. Measat-3 was launched at the

end of 2006 and is now operating at close to 90%

utilization rate. Measat-3a which was launched in

June 2009 into the same orbital slot has already

achieved 60% utilization rate, despite only having

been operational for a few months. In terms of our

capacity, we believe that we are priced competitively

for the quality services that we provide.

Do long term transponder contracts make sense

from a flexibility perspective?

It is important to have a balanced portfolio of

contracts. As an example, while our average contract

terms are five years, we support customers with

commitments from as little as a few minutes (for

Occasional Usage Services) to those who have

provide us with a 15 year commitment to lease the

capacity. By operating with such a balance we are

able to maximize our return on investment, taking

advantage of opportunities as they arise.

What do you see are the opportunities and threats

ahead for MEASAT?

Today, we see significant potential in meeting the

demand for satellite capacity to meet the growth in

video services across the region. For MEASAT, this

means meeting the demand for high quality Direct-

To-Home (DTH) satellite capacity in India and across

South East Asia. We also see significant potential in

the African region in the near to medium term.

In terms of threats, given the long investment cycle

in the industry and the lack of transferability of

satellite assets (which are difficult to relocate around

the region), we see the cyclical nature of the demand

/ supply balance as an ongoing concern. The evolu-

tion of the television business model plus with the

death of broadcast type services and the rise in

on-demand content; will also present a number of

challenges to the industry.

When do you see a leveling off of demand and

supply for transponder capacity in South Asia, and

the Asia Pacific Region?

We are very bullish and do not see any leveling off of

demand. SD (Standard Definition) and HD (High

Definition), and DTH (Direct-To-Home) and HD

demand cycles are comparable to Europe’s demand

cycles. (ASTRO) All Asian Networks is a cross media

group and MEASAT Broadcast Network Systems has

an exclusive license till 2017 for satellite (DTH)

transmission in Malaysia. ASTRO is driving Broad-

band Data. Our Indian and Australian Markets are

demanding Broadband Data. Universal Service

Provision (USP) and telecom are driving C-band.

Measat-Network Management Centre(NMC) in MEASAT's facility

Phot

o Cr

edits

: MEA

SAT

JANUARY 2010 45

Who are the new operators coming into the market?

Are these loss leaders?

Asia is a very competitive market with over 20

Satellite operators. Within this market, you have a

diverse range of companies. The newer entrants,

without a track record or a strong niche, tend to

have to compete for customers on pricing which can

be disruptive.

What has been the shrewdest business move you

have made recently?

That is a great question. I see two. The first is the

focus on High Definition (HD) video distribution

services in the Asian region. We decided two to three

years ago that this was to be a core segment of the

industry over time and invested heavily in under-

standing the segment and developing a viable

business model. This focus is now paying off. The

second was the development of our African business

with the relocation, and renaming, of one of our

older satellites (MEASAT-1) to 46E. As we are

operating in inclined orbit under the AFRICASAT

brand names, we have used it to create an important

bridgehead into the African market.

Has ITAR had any effect upon your acquisition of US

satellites such a Boeing, Lockheed Martin, Orbital

Sciences, and Space Systems/Loral?

ITAR regulations, and their impact on the ability of

our team to oversee the design and manufacture of

our spacecraft, is clearly is one of a number of

factors that we consider when looking for new

spacecraft (along with price / capability / reliability).

For our last two spacecraft, we selected US

manufacturers (Boeing and Orbital) as they had the

best product at the best price. If we were faced with

a procurement decision where, offering identical

products, we faced ITAR restrictions with one

manufacturer and none with the other, I am pretty

clear what our choice would be.

Would you consider SpaceX as a launch vehicle or a

home grown version?

At this point in time, one of the biggest concerns in

the industry is the availability of a cost effective

launch vehicle. When Space-X proves itself as a

reliable launch vehicle, I think it will be considered by

a large number of operators for future launches.

We’ve talked to SpaceX at the APSCC 2009 Kuala

Lumpur Conference. I believe that they will have GEO

lift capabilities in the 2011 - 2013 periods.<

Richard Theodor Kusiolek was an early visionary of space related technologies in Northern California’s Silicon Valley

architecting Digital Battlefields and the High Tech Multimedia City. Professor Kusiolek is a Faculty Instructor with the University

of Phoenix and also technical writer for Via Satellite Magazine and APSCC. Professor Kusiolek is Senior Director and Director of

JP Technologies Pte, Ltd. He also served as the Senior Management Consultant for India’s Metamor Corporation, China’s Huawei

Technologies, China’s National Aerospace/Aviation Base, Beijing’s Satellite Conferences, and as the General Manager and

Director for China’s WeSoftware Corporation.

MEASAT Antennas at MEASAT's facility

Phot

o Cr

edits

: MEA

SAT