Shin Sat to ride iPSTAR to global area

Shin Sat to ride iPSTAR to global area

BANGKOK (Reuters): Thailand's only satellite operator Shin Satellite Plc will use its new broadband satellite iPSTAR-1 as a key to unlock global markets, its chairman told Reuters in an interview on Friday.

Dumrong Kasemset said the firm's US$350 million iPSTAR project would strengthen its leadership in the Asia-Pacific amid expectations of growing demand for Internet bandwidth in the region.

"We will be the first broadband operator in Asia. We have to prove the market in Asia-Pacific first and then go ahead to the global market, probably in Europe and then America," he said.

Shin Sat, one of Asia's leading satellite operators, operates three conventional satellites called Thaicom I, II and III.

The iPSTAR-1 satellite, to be commercially launched in 2003, will be very cost-efficient with high capacity for global applications, Dumrong said.

"It will offer a cost that is one tenth of conventional satellites," he said.

Shin Sat so far had received a good response from advance sales of iPSTAR-1 capacity and signed contracts with nine national service operators in Asia, he said.

Some 50 percent of the cost of the new project will be financed with export financing from selling advance capacity.

"Our strong cashflow from revenues will help finance some of the new project and to repay all our $100 million foreign debt in the next two years," he said.

Shin Sat posted a 144 percent jump year-on-year in its net profit to 359 million baht in the first half of 2000, boosted by a 41 percent increase in revenues from transponder rental and the Internet.

Dumrong said revenues from iPSTAR would be a major source of income in 2003, with targeted customers in China, India, Pakistan, Australia, Japan and South Korea.

Shin Sat has said it expected $400 million in revenues from the project in 2003, which would mean the project broke even in the year it was launched.

Dumrong said expected dramatic growth in global Internet subscribers made the iPSTAR-1 prospect promising.

Dumrong said Thailand's Internet market had experienced strong growth of an average 150 percent a year in recent years. The firm's Internet unit recorded a 500 percent jump in its subscriber base within a year.

With regional exposure, Dumrong said, sharp growth in revenues from foreign customer bases especially in India and Indochina helped offset sluggish demand for transponders in domestic market.