ShinSat, China close to iPSTAR deal
Shin Satellite Plc believes it is close to clinching a deal to provide iPSTAR broadband satellite services in China.
ShinSat's investor relations director, Richard Jones, said the company is waiting for the Chinese government to grant a landing rights licence to its iPSTAR broadband satellite. The licence will allow the iPSTAR satellite to offer both uplink and downlink services in China. ShinSat will jointly provide the service with the state-owned telecom firm China Satcom, which wants to use iPSTAR technology to provide satellite broadband services. Recently, ShinSat said iPSTAR will reach break-even point when it bags deals from China and India. However, it expected to finalise the deals by the end of last year. The company expects users in China and India to account for 26 per cent and 17 per cent, respectively, of iPSTAR's total transponder use. The broadband satellite, the footprint of which covers 14 Asia-Pacific countries, aims to attract 100,000 customers this year and 200,000 next year. ShinSat spent US$400 million (Bt15 billion) on the iPSTAR project, seeing it as the flagship of the Shin group. As well as iPSTAR, ShinSat operates three conventional satellites - Thaicom 1, 2 and 3. It is expected to launch another conventional satellite, Thaicom 5, later this year. The company has yet to clinch deals with telecom operators in China and India to act as bandwidth wholesale providers for the iPSTAR broadband service. According to Seamico Securities Plc, sales of iPSTAR user terminals will be a key revenue contributor for ShinSat this year. The broker estimates ShinSat will triple its sales volume of terminals from 17,992 units in 2005 to 79,874 units this year - lower than the company's forecast of 100,000 units. ShinSat sold 11,014 terminal units in the first quarter this year. Based on Seamico's terminal sales forecast and with terminals priced at $1,000 per unit, Seamico estimates ShinSat will gain revenue of Bt3.18 billion from terminal sales this year. Driven by terminal sales, it expects ShinSat's revenue in 2006 will be Bt9.78 billion, a surge of 75 per cent, year on year. ShinSat's share price yesterday closed at Bt12.30, up from Bt11.80. The company is 41.34 per cent owned by Shin Corp Plc.
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