Weird goings-on are stirring the Asian stratosphere. Anyone looking for the next regional flashpoint would do well to turn their eyes upward. The tussle for Asia's satellite market is getting nasty.
Witness the travails of APT Satellite which faces Indonesian demands to relinquish a prime satellite slot it leases from Tonga. Now Indonesia is accused of jamming APT's frequency, threatening fuzzy screens across the region for broadcasters like CNN and ESPN.
Squabbling aside, Asian skies are getting crowded. The number of active transponders (transmitting devices on satellites) should increase from 57 to 121 within two years. Over-capacity augurs falling lease rates and a brutal operating environment.
Despite all the bad news, Hong Kong's listed operators have been stellar investments of late. This year Asia Satellite Telecommunications has outperformed the index by 8 per cent, and APT by 5 per cent. The resurgence has been dramatic considering AsiaSat had been shunned since listing, falling well below its $20 issue price.
Analysts now are forecasting earnings growth in excess of 100 per cent, underpinning the positive sentiment. The company should earn about 86 cents per share rising from 43 cents last year, says Deutsche Morgan Grenfell.
The strong growth comes from the dramatic expansion of capacity achieved on its second satellite. Next year a third 'bird' will be launched which the company sees completing its patchwork of coverage across the region.
Share-price resurgence comes hot on the heels of a US$1 billion satellite deal in the United States where MCI and News Corp bought a 50 per cent stake in a US direct-to-home satellite television programming service .
