Asia’s satellite industry is facing a long dark winter, industry leaders were told during Casbaa’s one-day Satellite Industry Forum in Singapore on Monday (1 June).

“The winter of satellite is coming,” APT Satellite executive vice president, Huang Baozhong, told delegates, using an analogy from HBO Original series Game of Thrones.

Huang said the situation was partly driven by oversupply of capacity and because demand had not picked up as expected. He also said satellite operators were failing on the price side in both Africa and Asia, giving way to terrestrial competition.

“I do not deny that future demand is there, but it will take time long time. How to expand in the medium term is a challenge,” he said.

AsiaSat president and chief executive, Bill Wade, said the next 12 months would continue to be competitive, with demand increasing from pockets in the region “but flat elsewhere”.

“We should emphasise our strengths”, including point-to-multipoint video distribution, Wade said, adding that it was “discouraging” to see some operators slashing prices for video when clients would be willing to pay more.

Wade said competition had increased dramatically, and that the market was reaching an unsustainable position. This put the industry at risk.

“We need to be able to provide capacity longer term at more competitive prices in order to compete with terrestrial, but we have to be able to fund those projects,” Wade said.

Pricing is clearly an issue that continues to divide the industry.

ABS co-founder and chief executive, Tom Choi, said the satellite industry had to find ways to lower costs. “Every other industry has lowered their costs per bit… If you decrease your price you will find more customers,” he said. “We are not pricing unsustainably... You would be shocked at how low we can drop our prices and still maintain profitability,” he added.

“All our satellites are new builds, and all have been built so that the price per megabit can be as low as possible. Pricing will have to drop in order for our company to grow. If we don’t decrease our prices we aren’t going to be able to grow the market,” Choi added.

New hybrid HTS (high throughput satellite), ABS-8, which launches in late 2017, will introduce dramatically lower pricing.

Choi said major telcos had already signed up. “At these pricing levels, we are more competitive than microwave” and will allow customers to go into areas where they haven’t been able to access before, he said.

Choi also said the industry’s biggest challenge was giving investors a realistic view. “We have to do a better job as a community to communicate with investors, to give advice on what is actually realistic and what is not,” he said, adding that “fanciful projects that promised a lot and failed” and “spectacular failures” resulting in massive losses were detrimental to the entire industry.