iPSTAR likely to break even next year

Bangkok Post (16 November 2007)

Shin Satellite Plc said yesterday that it expected its broadband satellite iPSTAR to break even next year, pushing up revenues and net profit growth.

Revenue growth drivers next year would come from China and India, where demand for high-speed Internet was huge, said chief financial officer Tanadit Charoenchan.

''We will reach several milestones next year. Apart from growth from China and India, other markets in Malaysia, Indonesia and the Philippines will contribute more revenues,'' he said without giving a specific forecast.

Shin Satellite, which operates the $400-million iPSTAR, the world's largest broadband satellite, aims to have sold 220,000 to 250,000 user terminals by the end of next year, up from the 110,000 by the end of 2007.

''It's our best-case forecast. When user terminal sales hit 220,000, we will reach break even point for iPSTAR,'' he said.

iPSTAR's terminal equipment consists of an indoor modem for connection to the Internet, voice service and a small dish antenna with a signal receiver and transmitter. It had sold 93,153 units by the end of September.

The company is expected to report a net profit of 3.27 billion baht this year on revenues of 6.8 billion, according to eight analysts polled by Reuters Estimates.

In the first nine months of this year, it made a net profit of 3.2 billion baht due to a 5.13-billion-baht gain from sales of investments in the third quarter. For 2008, the analysts expected a 43% fall in net profit and a 16% rise in revenues.

Shin Satellite would provide high-speed Internet and telecoms services via iPSTAR in 14 Asia-Pacific countries next year, when the satellite's utilisation rate should double to 12-16% from 6-8% now, Mr Tanadit said.

It planned to launch iPSTAR services in Malaysia and South Korea in December, Philippines in January, Indonesia in February and Japan in the middle of next year, marketing chief Patompob Suwansiri said. ''We are very excited about markets in Indonesia, Philippines and Malaysia. We should start to realise revenues from the three markets fully next year,'' Mr Patompob said.

The company's plan to launch iPSTAR services in India had been delayed until early next year from the fourth quarter, pending a licence on imports of terminals, he said. India and China account for about 42% of iPSTAR's capacity.

iPSTAR, which has a capacity of 45 gigabytes per second (Gbps), 20 times higher than conventional satellites, contributed almost 30% of Shin Satellite's revenues and the proportion was expected to reach 50% next year, Mr Tanadit said.

Shares of Shin Satellite (SATTEL) closed yesterday on the Stock Exchange of Thailand at 10 baht, unchanged, in trade worth 47.86 million baht.