Thailand’s Shin Satellite Reports Revenues; Says China to Lead Future Growth
BANGKOK, May 15, 2007 - Satnews Daily - Lone Thai satellite operator Shin Satellite Pcl (ShinSat) reported lower revenues but higher profits for the first quarter of this year.
Revenue in the 2007 first quarter was down 7.8 percent year-on-year to $48 million, and down 18.8 percent from the fourth quarter. Revenues, however, received a boost from $14 million in foreign exchange gains. ShinSat blamed the revenue loss on the strength of the baht and slower sales of iPSTAR terminals. Shin Satellite also has more than $300 million worth of debt that will mature in three and seven years. ShinSat took a full-year net loss of $1.4 million in 2006 compared to a profit of $40 million in 2005.
ShinSat said its net profit rose to $4 million compared with a loss of $1.7 million for the same period last year but down from a net profit of $23.7 million in the fourth quarter of 2006. ShinSat, however, took an operating loss of $2.9 million.
The first quarter numbers do not include depreciation expenses for the $400 million iPSTAR-1 Broadband Internet Satellite, the world’s largest broadband satellite, and write-off costs for Thaicom-1, which is to be de-orbited this year.
Vice-president for finance and accounting Thanadhit Charoenchun said ShinSat expected improved business results this year, helped by increasing demand for iPSTAR terminals and bandwidth locally and overseas.
ShinSat expects revenues to improve starting the second quarter from sales of satellite services in China, the major market for iPSTAR. iPSTAR services contributed some 26 percent of ShinSat revenues in 2006, and this share is expected to rise as iPSTAR’s utilization rate increases. iPSTAR, or Thaicom-4, has a capacity of 45 gigabytes per second, 20 times faster than conventional satellites, according to ShinSat.
The company also expects China and India to contribute strongly to revenues beginning 2008. This will allow iPSTAR to reach its breakeven utilization rate of 25 percent by late 2008 or early 2009. ShinSat considers the Asia-Pacific region one of the fastest growing in the world for broadband Internet demand, and also plans to expand its broadband satellite services in Indonesia and South Korea.
China and India, however, are top two markets for iPSTAR, with China taking 25 percent of iPSTAR's capacity. ShinSat foresees a continuation of growth in China during the second half but says growth should start peaking early 2008. It described the pent-up demand for Internet services in China as enormous. China should become IPSTAR’s largest market over the next five years with some 25 percent of sales. ShinSat claims it provides the cheapest bandwidth in China.
Shin Sat plans to launch iPSTAR services in India this fourth quarter after it finishes building two ground stations in Mumbai and New Delhi. India accounts for 17 percent of iPSTAR capacity.
Sales of iPSTAR user terminals were expected to double this year from some 70,000 in 2006. iPSTAR’s terminal equipment consists of an indoor modem for Internet connection, a voice service and a small dish antenna with a signal receiver and transmitter. ShinSat has distributed some 70,000 sets of iPSTAR user terminals to more than 10 Asian countries and expects to increase the number to 150,000 sets by the end of 2007.
The iPSTAR system consists of two segments: a space segment (iPSTAR), and a ground system (iPSTAR user terminal, gateway and network). iPSTAR can serve up to 10 million subscribers across the Asia-Pacific in 14 countries – Thailand, China, India, Australia, New Zealand, the Philippines, Taiwan, Japan, Korea, Vietnam, Myanmar, Cambodia, Malaysia and Indonesia. ShinSat has been developing the IPSTAR system since 1997 and has patented this innovative technology.
