Satellite dish firms face tough times

Carrie Lee

ONE-TIME aggressive satellite dish companies have cut back on their activities with some even closing down in the face of market difficulties.

''They used to be very active, marketing with a high profile. Now they're quiet and have cut promotion,'' said an industry source.

He added that there were now just about 10 satellite dish companies compared with a peak of around 80.

Among those which have slashed marketing are Hongkong Telecom CSL and Sun Satellite Television Services, a wholly owned subsidiary of Sun Hung Kai Properties.

''We have indeed toned down activities. We used to do a lot of promotion and presentation. But our strategy this year doesn't feature such aggressive plans,'' said Hongkong Telecom CSL sales manager Albert Chan.

Instead of actively selling its service across the board, the company now targets only ''prestige customers'' - properties with owner incorporations and a good management company.

Mr Chan said resources used in broad-based marketing would only mean losses from cut-throat competition.

Another obstacle was the coming of cable television, whose reception would require a system different to that for STAR TV.

Mr Chan said some people did not want dishes installed now as they were waiting to see if they could later install a system to receive both cable television and STAR TV.

Hongkong Telecom CSL charges a one-off installation fee - which can be paid in instalments - but not leasing fees.

Mr Chan said this was to reduce risks as unscrupulous users could escape paying leasing fees.

''Their liabilities can be beyond control. There is not a centralised control system. What if the tenant moves without paying?'' said Mr Chan.

Sun Satellite deputy general manager Johnny Leung Chung-kong said inflation had forced the company to withdraw previously fixed fees.

He said the company had lowered its profile in marketing as the market had shrunk.

''Our marketing does not have such a high profile now as most housing estates already have dishes installed,'' said Mr Leung.

Last month, Fortress Satellite Services and Pacific Satellite International were licensed to install satellite dishes in Housing Authority estates and government quarters.

''The only market left is private individual buildings - our present targets,'' said Mr Leung.

However, Fortress, a subsidiary of Hutchison Whampoa, is still active in the market.

As it is a sister company of STAR TV, it can provide very competitive terms such as free dish installation.

Losses, if any, could be covered by the income generated from STAR TV.

This started a price war, making it even more difficult for competitors as they were expecting returns from investment only after several years.

One analyst said even Fortress would find it difficult to recoup its investment because of its competitive packages.

''It is spending a fortune on dish maintenance. The dishes are easily damaged by storms,'' said a source.

However, Mr Leung still sees bright prospects for the industry.

''As telecommunications are getting ever more advanced, satellite television dish installation has high potential,'' said Mr Leung.