Australia is in the middle of an ambitious rollout of telecoms services under its National Broadband Network (NBN) public-private partnership, which is using satellites as one of three technologies to reach all premises in the country. SatelliteFinance…
Australia is in the middle of an ambitious rollout of telecoms services under its National Broadband Network (NBN) public-private partnership, which is using satellites as one of three technologies to reach all premises in the country. SatelliteFinance talks to Paul Sheridan, VP of Satellites at local operator Optus, to find out more about the evolving market.
Jason Rainbow: How does Optus’ satellite segment fit within the company’s wider telecoms operations and how important is it to the company strategically?
Paul Sheridan: Optus is Australia’s only locally based satellite owner and operator. We operate a profitable, strong margin business and have a number of long term contracts in place that generate healthy cash flows and contribute to Optus’ overall financial performance.
The Optus Satellite service provides a key differentiator for SingTel Optus and is critical to Optus’ delivery of broadcast and telecommunications services, particularly in regional and remote parts of Australia.
Optus supports more than 45,000 VSAT customers, two million DTH satellite dishes are pointed at Optus satellites and more than 6,000 customers are using our Optus MobileSat service in remote areas of Australia, New Zealand and surrounding islands. These services are supported from our major earth stations at Belrose, Hume and Lockridge.
JR: What kind of impact did the delay of several months to launch Optus 10 have on your business and revenue forecasts?
PS: Optus 10 was our tenth successful satellite launch and we couldn’t be happier with how it performed through launch and in-orbit testing. Optus 10 was always part of a multi-faceted strategy and was designed with the capability to back up any one of our existing satellites. The satellite’s payload was specifically planned to provide a high level of flexibility, enabling it to operate in either the KU Fixed Satellite Services (FSS) band or the Broadcast Satellite Services (BSS) band.
Although the launch delay was frustrating it didn’t affect our business because Optus 10 was never intended to be a replacement for an existing satellite in the Optus fleet. The most important thing for us was to ensure we took every possible precaution to ensure a safe and successful launch.
Optus 10 provides us with increased fleet resilience and capacity, and gives us an additional layer of risk mitigation, as well as greater bandwidth to support the delivery of video, data and voice services for our customers. Optus 10 is now providing backhaul and connection services for regional and remote sites across the Optus mobile network.
JR: Optus has agreed to operate NBN’s upcoming US$2bn pair of satellites for at least 15 years, helping to deliver the internet to rural areas. How will these two satellites co-exist alongside your company’s existing constellation?
PS: Optus is proud to have been appointed to operate NBN Co’s new Ka-band satellites. As part of this agreement, we will be providing the tracking, telemetry and control services for NBN Co’s two purpose-built satellites. These satellites, which are planned to launch later this year, are designed to provide broadband coverage to between 3-4% of homes and businesses.
By contrast, the Optus Satellite network currently delivers TV, mobile telephony as well as broadband services across regional Australia and New Zealand. We’re seeing good growth in a number of our key services such as the broadcast market.
We therefore see NBN’s satellite technology as complementary to our existing fleet when viewed from a customer perspective. There is also value in keeping these services on-shore and ensuring the Australian satellite skill base expands with this new opportunity.
JR: How do you see satellite’s role and importance for Australian telecoms changing in the future?
PS: Satellite services have and always will play an important role in a country the size and scope of Australia. Optus Satellite has a long and proud history of providing vital communications infrastructure to communities and businesses and making a real difference in remote areas of Australia. This year, we’re celebrating 30 years since we launched Australia’s first commercial satellite.
We’re seeing healthy demand for mobile and data services from a range of enterprises operating in isolated parts of the country including gas and mineral exploration ventures, agricultural leases and emergency services.
JR: Optus was among the international satellite operators that attended a satellite conference in November in Myanmar, which is looking to order its first satellite. Your parent Singtel offered to conduct a feasibility study for a dedicated satellite as part of a bid for a mobile licence in the country. Is Optus interested in expanding outside its markets in Australia, New Zealand and Antartica?
PS: Optus regularly looks at opportunities to expand into new markets.
JR: Singtel decided not to pursue a sale of Optus in August 2013, however, is the group still considering the possibility of floating its Australian satellite business?
PS: At this point SingTel is not undertaking any plans in relation to an IPO of the Optus satellite business. SingTel and Optus are both committed to growing and investing in the satellite business.
