Hong Kong-based CMMB Vision has announced plans to launch satellite-based mobile multimedia services throughout China.
In order to do so, the company has signed a MoU with its US affiliate New York Broadband (NYB) to lease all the capacity on two…
Hong Kong-based CMMB Vision has announced plans to launch satellite-based mobile multimedia services throughout China.
In order to do so, the company has signed a MoU with its US affiliate New York Broadband (NYB) to lease all the capacity on two high-powered L-band satellites, which the latter is in the process of ordering.
Through its subsidiary New York Satellite Holdings, NYB has sent out an RfI for the spacecraft. The first satellite is expected to be ordered by the end of the year and the second in H2 2015.
Consultancy Space Partnership International has been hired to run the procurement process, including securing the launch and insurance coverage.
Speaking to SatelliteFinance, CMMB Vision’s chairman and CEO, Charles Wong, and CTO Hui Liu explained how the company has grown from a Chinese technology standard developed in the early part of the 2000s, and how it ultimately plans to sell its services across Asia.
Liu explained: “I supervised the development of this technology (china mobile multimedia broadcasting) back in 2002. The idea was to develop a terrestrial broadcasting platform to deliver video and data to mobile handsets. CMMB became standardised in 2006 with commercial services being launched in 2008.
“At this stage I believe there are 350 cities in China covered by CMMB, with 50 million devices receiving the signal. I think it is now probably the largest terrestrial broadcasting service out there.
“When we designed CMMB, the vision was always to have a platform which included both terrestrial and satellite components, but the satellite element didn’t materialise. But I think for a country as big as China, satellite is essential.
“At the same time, user demand has also changed. When we designed CMMB, we tried to create a user demand but these days the demand is mainly for personalised multimedia services and this is growing exponentially to a point where it cannot be fully addressed by the cellular network. So it is the perfect time for us to inject the satellite element, not to replace cellular but to be complementary to it.”
CMMB Vision was initially formed as the service provider for the technology standard which has been officially adopted by Chinese regulators for mobile hand-held television.
In May 2010, Wong, via his private equity firm Chi Capital, carried out a backdoor listing of printed circuit board manufacturer Global Flex Holdings Limited, and turned it into CMMB Vision. Chi Capital remains the majority shareholder of CMMB Vision.
Since this reverse listing, CMMB Vision has worked with NYB to introduce its mobile multimedia technology in the US. Over the past couple of years, NYB has acquired 12 low power TV stations across the nation and the two parties have used the UHF spectrum owned by these stations to deploy a CMMB-based mobile multimedia network.
Out of the ashes of Worldspace
The transition from utilising a UHF-based terrestrial network to the current plans to launch a pan-China satellite service came about due to the realisation that, in order to acquire the spectrum resources necessary to offer a comprehensive mobile multimedia service, the company would have to turn to the satellite sector.
This culminated in New York Satellite Holdings purchasing the former Worldspace satellite AsiaStar from Yazmi USA, a company owned by Worldspace founder Noah Samara.
Yazmi had acquired the L-band satellite for US$5.5m during the satellite radio provider’s bankruptcy process in 2010. The subsequent sale to New York Satellite Holdings has seen Samara take a 20% stake in NYBB. Wong said he is a passive shareholder, although he has provided advice on the procurement process for the new satellites.
He added that, despite its age, the AsiaStar satellite will give CMMB Vision both the spectrum allocation and orbital position, at 105E, necessary to offer its services. The company also plans to use the bird to take its first steps into the consumer market in China.
“The AsiaStar satellite has been in orbit for 12 years and is going to be put in an inclined orbit in the near future,” he said.
“So while it is still functioning, to run a scalable commercial business in a market like China is not viable, so we would rather wait for the new satellite.
“But in the meantime, we will use the current satellite for some low hanging fruit type of business. For example, the DARS business where the current power level on the satellite is sufficient to reach the automobile. This is actually why AsiaStar was created, to cater to the DARS business.
“So we are hoping to buy time to ease into the whole consumer services market where the satellite can directly bring media and data services to mobile handsets.”
To offer this service CMMB Vision needs a Chinese partner, and the company currently has a MoU with a Chinese media group to develop and operate the satellite-based mobile multimedia service nationwide. Wong said this company will provide all the necessary operating licences and landing rights.
In addition, the company is currently building a trial network in Beijing to prepare for the launch of its services.
Procurement process underway
CMMB Vision hopes to roll out full services in 2017, with the first next generation satellite being launched in H1 of that year.
The satellite will be far more powerful than AsiaStar. SPI said it is currently looking at a 10Kw medium class size broadcasting satellite with bent pipe one-way architecture and a high power output that can reach mobile devices directly.
The second next gen satellite will be a two-way mobile satellite to complement the first one.
Wong said the procurement will initially be funded privately with debt financing likely to take place further down the line.
“We look at this as a risk-based investment, so the initial capital will be provided by private investors, such as myself and our partners. We also have the listed company in Hong Kong which can serve as a funding vehicle. This would see CMMB Vision make pre-lease payments to help provide NYB with the required funding.
“We think by doing this we can cover the initial capital necessary for the down payment, say around 30% of the whole cost of the satellite.
“After that we can look at export credit agency financing or a syndicated loan or go back to the capital markets and raise more money.”
China and beyond
Wong said that CMMB Vision’s business model focuses on signing up service providers, such as mobile operators and ISPs who need the satellite pipe to overlay their existing business. He does not plan to charge them for this bandwidth but will look at a revenue sharing model.
If this B2B model proves successful, then the company plans to replicate the turnkey solution elsewhere in South East Asia, particularly India and Indonesia – countries which share demographic and geographic characteristics.
That is some way off but, given the size of the initial market CMMB Vision is targeting, it may not be required.
