Any Which Way: A Strategic Initiative Analysis (short: ASIA)

Friday 13 June 2014
Any Which Way: A Strategic Initiative Analysis (short: ASIA)

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by Simon Bull, Senior Consultant at COMSYS. 

With more land mass than the moon and 60 per cent of the world’s population, Asia is a region of many contrasts – from the desperately poor or isolated countries like Mongolia and the Pacific Islands to the dense, wealthy nations of Japan and Taiwan. Markets that at first glance would seem to offer very similar opportunities and comparable demand for VSAT service are vastly different.  Contrast the vibrant, innovative and rapidly moving VSAT business in India with the constantly disappointing performance in China and a similar comparison between the island nations of Indonesia and the Philippines. 

COMSYS analysis shows that the future direction of the VSAT market in Asia will follow the global trends established with rising bandwidth requirements and, more importantly, the necessity to be reliably connected in any and all environments.  We probably see more innovation from operators in Asia than from any other region with the introduction of services which push the boundaries of mobility, response, price, data rates and bandwidth efficiency.  Some Asian operators support amongst the lowest-priced VSAT services in the world for huge rural connectivity and banking networks whilst others have built significant business on small high value, high margin corporate networking in the resource, energy, maritime and cellular backhaul segments.  Governments are concerned to close the digital divide, increase security and manage disasters; banks are exploiting their digital presence through advanced services hosted in ATMs; commercial and military fleets need to bolster connectivity to retain quality crew and increase operational efficiency; mining companies have to ensure the highest uptime to prevent loss of production and all these applications are fuelling growth in Asia and demand the most advanced VSAT services.

COMSYS sees considerable growth prospects across the region in all of these vertical segments and we expect opportunities to remain rooted in established markets.  However, despite the innovation we have seen from operators in the region – it shouldn’t be forgotten that IPStar was the first major high throughput multi-spotbeam satellite in the world – we also anticipate that Asia will be the hardest nut to crack as new satellite technologies explode into the market and the trend of disruptive change that is now well underway takes hold.  Our analysis in the latest COMSYS VSAT Report concluded that flexibility was a key defining factor for operators looking to make strategic investment decisions and this is especially true in Asia.  Extending across the spectrum from business models to operational expertise and from satellite capacity commitments to VSAT platform infrastructure, VSAT service providers need to ensure they anticipate and nurture the ability to react swiftly and decisively within their businesses as new paradigms take hold.

If you are a VSAT operator, you can almost certainly see the value in the flexibility mantra as well as diversified focus, which is another strategy COMSYS has long touted, but bear in mind this also means that you need to lift your head above the parapet from time to time and truly understand the changing environment on a wider scale than just your local markets.  Due to its fragmented nature and diverse geopolitics, every market in Asia places unique demands on a VSAT service provider, but the larger trend of globalisation means that new services in completely unrelated countries can have a major impact very quickly.  Who knows, possibly Google, Facebook or someone else will really enter the scene and make huge investments to expand and enhance the satellite market as has been widely speculated recently.  In our opinion, it is inevitable that high throughput LEO systems will almost certainly fundamentally change the structure of the satellite market in the future, but whether this will happen within 10 years or 50 is yet unclear.  What is certain is that networking expertise, the ability to operate and support services in remote and inhospitable places, smart network management and vertical industry expertise will always have value.  Operators need to stay focused, but invest in understanding the technological and business changes that are sweeping the market and prepare themselves.

Best regards,

Simon

Simon Bull
Senior Consultant at COMSYS


Simon Bull will be the moderator of the 'New Markets, New Technologies and New Operators' panel at the CASBAA's Satellite Industry Forum in Singapore (16 June, 1.30pm - 2.10pm), joint by industry experts from Inmarsat, Kymeta, Newtec, Panasonic Avionics and Thuraya.

COMSYS is the leading analyst in the satellite industry specialising in the VSAT market. For more information on the 13th Edition of The VSAT Report, please contact COMSYS at +44-1727-832288 or www.comsys.co.uk.

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