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Published on August 15, 2007

Shin Satellite expects better financial results in this half of the year, thanks to gains from selling a stake in a subsidiary and an improved performance.

Although TOT has suspended the purchase of 17,000 signal-receiving dishes for ShinSat's broadband satellite iPSTAR, the company's executives believe the impact will be negligible.

In June, ShinSat sold 49 per cent of its wholly owned subsidiary Shenington Investments to Asia Mobile Holdings for US$200 million (Bt6.8 billion). Its original investment was $3.9 million.

Of the proceeds, $141 million will be used to retire loans for the iPSTAR and Thaicom 5 satellites.

The proceeds have already been booked, iPSTAR head of marketing Patompob Suwansiri said yesterday.

Shenington runs Cambodia Shinawatra and Lao Telecommunications. AMH, a joint venture of Qatar Telecom and ST Telemedia, focuses on telecoms investment in Asia-Pacific.

"Therefore, our performance will be better in the next quarters, due partially to the positive cash flow," said Tanadit Charoenchan, chief financial officer.

The Information and Communications Technology Ministry has asked TOT's board to examine if it was fair for TOT to have to buy the 17,000 dishes only from ShinSat.

Patompob said iPSTAR's main revenue came from bandwidth sales, not from dish sales. Besides TOT, other telecom operators can also buy iPSTAR dishes directly from ShinSat - and buy bandwidth from TOT to retail the iPSTAR service.

Those who want to offer iPSTAR service have to buy iPSTAR dishes, since the dishes, the iPSTAR satellite and the gateways were designed to work together to provide maximum service capacity, he said.

TOT is the exclusive wholesaler for iPSTAR service in Thailand. It pays ShinSat Bt475 million each year for the seven years of the deal, which started two years ago.

TOT has already purchased more than 20,000 iPSTAR dishes for resale to subscribers.

Besides Thailand, IPSTAR has service representatives in Burma, China, Australia, New Zealand, Vietnam and Cambodia and is working on five more regional countries in the second half - first India and South Korea, followed by Japan, Malaysia and Indonesia.

ShinSat expects to complete installing iPSTAR gateways in India this quarter and start operations there next quarter.

In Australia, the company sells 3,000 iPSTAR dishes per month on average.

In the vast market of China, the company has three gateways installed and is now building up the service distribution channel.

ShinSat expects to have sold a cumulative 100,000 iPSTAR terminals this year.

It posted sales and service revenue of Bt1.794 billion in the second quarter, up 22.6 per cent year on year and 10.9 per cent quarter on quarter.

It recorded a second-quarter net loss of Bt83 million, versus a first-quarter profit of Bt135 million and a second-quarter loss of Bt34 million last year. Foreign-exchange gains were down to Bt213 million in the second quarter from Bt461 million the previous three months.

iPSTAR contributed Bt486 million in revenue, an increase of 41 per cent from the first quarter. As of the second quarter, ShinSat had sold a total of 86,303 iPSTAR dishes, of which 11,116 dishes were sold in the quarter alone.

Sirivish Toomgum

The Nation