Mabuhay bullish on the international market

Mabuhay Philippines Satellite Corp. (MPSC) is training its sights on the international market as well as the provision of value-added services in order to maintain its revenue stream and meet its projection of a seven to 10 percent income growth this year.

Leveraging on the footprint of its Agila-2 satellite, Mabuhay, a subsidiary of telecommunications giant Philippine Long Distance Telephone Co. (PLDT), aims to achieve breakthroughs in the international market with special focus on China, Taiwan, Hong Kong, India and Indochina (Vietnam, Cambodia and Laos).

Beside its coverage of Asia, the Agila-2 satellite is one of only three Asian satellites with a spot beam into Hawaii, which provides a gateway linking Asia to North America.

Chinese market

Mabuhay president Gabriel Pimentel said that while the Chinese market is well-regulated and still very competitive, the company sees many possible areas of cooperation and collaboration with Chinese satellite operators.

During the recent state visit of President Arroyo to China, MPSC signed two significant memoranda of understanding (MOU) with China Satellite Corp. (Chinasat) and CITV (China International TV Service).

Chinasat is a domestic satellite operator and Agila-2 is keen on providing complementary international connectivity via the former. CITV, on the other hand, is the international commercial arm for the CCTS series of TV channels and Mabuhay wants to distribute these programs locally and regionally.

Recently, Mabuhay also signed an MOU with Sinosat, another domestic satellite operator in China.

Pimentel said a nominal growth is expected, with profits in 2002 expected to reach P150 million or P10 million higher than last year, since the current year is projected to remain flat for the local economy and that the local telecommunications and broadcasting industries are expected to be in a state of consolidation and restructuring.

Positive net income

2001 marked the second consecutive year of positive net income for the company despite the decline in bandwidth, especially during the second half of the year, and the coming into service of additional submarine fiber optic cable systems that put a downward pressure on bandwidth prices.

"Mabuhay is confident that in spite of the downturn in the international market, it can maintain its current profitability and is ready to face the challenges of 2002," Pimentel said.

The company has programmed a capital expenditure budget of P50 million this year which will be used to pay part of its debt totaling $108 million, and for equipment repair. Payment for the company’s loans has been stretched to 2007.

To boost its income, Mabuhay is aiming to create more value-added services that include teaming up with gateway operators, IP pops, teleport operators, and video exchange operators to provide end-to-end solutions for the international delivery of data, IP (Internet Protocol) and video.

The PLDT subsidiary has arrangements with four teleport operators in Hawaii, namely Cyberstar, Transvision, Skytiger and Vision. In addition, connectivity to the US mainland can be arranged through its working relationships with Sprint, Time Warner, Verizon, UUNET, and Southern Cross, Pimentel said.

Loral Cyberstar and Verestar, both of which are currently leasing transponders from Mabuhay, are two of the world’s biggest Internet-over-satellite service providers.

Taiwan office

Mabuhay maintains a full-time office in Taiwan and is looking at investing in receiving antennas to be installed in about 70 cable TV headend stations throughout Taiwan to entice all the major TV networks to shift their domestic feeds to the Agila-2 Ku band transponders.

Taiwan is leading the region in the thrust toward commercially launching digital TV programming. It is a main source of Chinese language entertainment with over 100 TV channels produced in Taiwan.

Meanwhile, with Agila 2 being the only Asian satellite to be granted by the US Federal Communications Commission (FCC) an ALSAT listing, Pimentel said this has created an opportunity for news and video turnaround services as well as for Internet bandwidth delivery.

Mabuhay is applying to expand this license to cover the extended C band frequencies as well.

In terms of uplinking in the Philippines, Mabuhay has started a test broadcast for Egyptian language programming originating in Australia. This is currently distributed to all Egyptian embassies all over the Asia-Pacific region.

Turnaround service

The company is also currently promoting turnaround service for programs and news originating anywhere in the US mainland. Similar to the CNN programs which originate in Atlanta and are turned around in Napa Valley in California to Asia using an American satellite, a video/news program in the US can be beamed to Hawaii from another US domestic satellite or via fiber.

The program is then turned around in Hawaii by Mabuhay’s teleport partners onto Agila 2, which will then beam the program to Asia. The reverse set-up is also possible for bringing Asian news and entertainment to North America.

Mabuhay and VYVX, a household name in video distribution throughout the US, have an informal agreement to co-promote a video contribution service.

"Currently, we are establishing a 45 Mbps video leased line from Los Angeles to Honolulu. Instead of a satellite link-up between North American and Hawaii, this would utilize VYVX’s extensive fiber optic network and video switching centers to bridge content between Asia and North America," Pimentel said. This service is expected to be available by the end of the first quarter this year.