David Hartshorn
Secretary General, Global VSAT Forum

Asia Pacific Satellite, June 2004

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"The latest round of Asian satellite market reports has been completed, and the results are unanimous: Regulatory reform has begun to have an immediate and positive impact on VSAT business in the region. But the work has only begun and Asia's upside potential has yet to be fully realised."

If your inbox is anything like mine, then you already know that the publication of satellite communications reports has become an industry unto itself. But that's not to say that it's always an end unto itself. On the contrary.

In addition to keeping consultants and lawyers gainfully employed (and keeping Internet servers clogged), these reports can occasionally provide a clear indication of the way forward in regions that are famously difficult to navigate. Take, for example, Asia. And take three reports, each written recently with a particular focus on satellite communications in the region.

The first is a legal brief prepared for the members of the Global VSAT Forum (GVF) by Squire, Sanders &smp; Dempsey, the GVF's official legal counsel. The brief addresses market-entry conditions for foreign satellite interests in China, particularly as they relate to China's recent accession to the World Trade Organization (WTO).

The conclusion? While China Satellite, the local operator, continues to enjoy a privileged position as market gatekeeper, China's WTO accession has created new market opportunities for satellite service providers seeking to provide VSAT-based solutions in the country.

Yes, geographic restrictions also apply and, yes, voice-over-IP via satellite remains closely protected, but useful classifications have been applied to VSAT-related operations and foreign- equity participation levels have been established for "value-added" VSAT services, among others.

The first liberalization in the Chinese telecommunications market is not scheduled to take effect until December 11, 2003, but Squire, Sanders &smp; Dempsey recommends that potential foreign investors should not delay in exploring opportunities to create partnerships with Chinese companies in order to develop Sino-foreign joint ventures. (A full copy of the brief is posted in the Member Services section at http://www.gvf.org/)

In South Asia, meanwhile, regulatory reform is also giving rise to new satellite communications opportunities. Pradeshta, a Dhaka-based GVF member and VSAT service provider, has issued a market-intelligence report to the GVF that examines the regulatory conditions that apply in the country, the extent to which competition is permitted, and the current demand for VSAT-based services in Bangladesh.

Among the Bangladesh report's findings:

1. There is excellent potential for VSAT operators and for expanded VSAT-service opportunities in Bangladesh, where the newly-established Bangladesh Telecommunication Regulatory Commission started functioning from 31 January.
2. Approximately 130 VSAT system/gateways are already estimated to be in operation, thanks largely to partial liberalization.
3. There is an estimated gross international bandwidth of less than 15 Mb/s (duplex) in use by the traditional ISP related providers, a low figure due partly to the lack of terrestrial connectivity between subscribers and ISPs - and due to high charges.

The Pradeshta conclusion? While Bangladesh's satellite regulations require extensive work, deregulation has resulted in an immediate improvement in operating conditions and set the stage for short-term progress in the country.

And finally, a third report: The GVF was invited recently to serve in a special working group of the Seoul-based Asia Pacific Satellite Communications Council (APSCC). The working group's objective was to analyse policy and regulatory issues in Asia, consider worldwide trends, and prepare recommendations on how Asian governments can develop best-practice satellite communications policies and regulations.

The research has already revealed that in recent years an increasing number of countries have successfully adopted a liberalised approach in keeping with the worldwide trend towards opening up of the satellite sector to competition.

But. In some Asian countries, policy and regulatory mechanisms have either not yet been fully established or have not kept pace with rapid technology advances and the emergence of new applications such as Internet via satellite, e-commerce, DTH, multimedia services, and Ku/Ka-band operation.

The report found that use of satellite communications in Asia is badly hindered in some cases, largely because:

• Separate licensing requirements are often required for satellite service providers, space segment operators, end users and radio spectrum;
• There is too often a multiplicity of concerned authorities and application forms involved;
• Licensing fees are still too high, and approvals often involve considerable delays.

The APSCC conclusion? Considering that satellites will be used to meet vital social and economic objectives in remote, rural and backward areas and cater to essential services like business communications, disaster management, tele-medicine, distance learning, the Internet, e-commerce, TV, audio, news and data dissemination, Asian policy makers should adopt a regulatory framework which would more effectively facilitate the use of satellite communications solutions.

Three reports, one outcome. Reform of the satellite sector has already shown positive results in Asia, but the improvements have only begun to be implemented. The extent to which Asian policy makers continue to implement effective frameworks will depend to a large extent on the private sector's willingness to offer practical guidelines on effective satellite regulation - and the private sector has shown that it is willing.

The GVF developed VSAT-specific regulatory guidelines three years ago, and they now comprise an integral part of the APSCC's broader satellite recommendations. Further, the GVF has led the establishment of a consensus amongst satellite operators active in the Asian region to jointly advocate "Open Skies" policies for domestic and international IP-based VSAT services.

A high-level meeting has been scheduled by the GVF for this month during CommunicAsia in Singapore, where the Asia satellite-operator community will develop an action plan to step up the promotion of Open Skies for VSAT services throughout the region.

Keep an eye on your in-box.

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Global VSAT Forum: The GVF is the UK-based independent, non-partisan and non-profit organisation representing every major world region and every sector of the VSAT industry. It has more than 130 members and serves as the unified voice of the industry in regulatory, policy and trade matters. The Forum co-ordinates regulatory and policy solutions at the national, regional and global level, and supports educational and promotional programmes in every nation of the world.

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