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Jakarta Post

PSN to spend $220m on expansion

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Sat, December 21, 2013   /  01:45 pm

Satellite communication service provider PT Pasifik Satelit Nusantara (PSN) will spend up to US$220 million to expand its business next year, including the planned purchase of a new satellite.

'€œWe will allocate about $200 million to buy a new satellite from the American Boeing Satellite System International, Inc.,'€ said PSN president director Adi Rahman Adiwoso on Friday.

The company would also spend about $15 million on expanding pay-TV services and another $5 million on expanding Internet broadband services, he said.

About 30 percent of the funds needed for the purchase of the new satellite would come from the company'€™s own funds, while the remaining 70 percent would be financed by loans from the Export-Import Bank of the United States (Ex-Im Bank), he added.

'€œThe satellite, dubbed PSN VI, will be the first satellite that we fully own,'€ he said, adding that PSN has five satellites, including Palapa C1 and Palapa C2 satellites jointly owned with the government,'€ he told reporters after signing a contract agreement with Boeing Satellite System International, Inc. on the planned purchase of the new satellite.

The new satellite, which will be launched into orbit in the middle of 2016, is expected to start operations in 2017, Boeing Satellite System International business development vice president Robert Peckham said at the same event.

Adi said the PSN VI satellite, which has 38 C-band and 18 Ku-band transponders, would serve only the domestic market with gateways in Medan, North Sumatra and Kupang, East Nusa Tenggara.

The C-band transponders are used for the data distribution of videos, cellular phones and other data communication.

Meanwhile, Ku-band transponders are used for providing satellite services for the pay-TV industry.

Adi said the domestic demand for satellite transponders surpassed supply.

Indonesia needed between 220 and 230 transponders, while local satellite providers could only provide 130 transponders, he said, adding that the remaining 100 were provided by foreign companies.

He said that the company booked total sales of $40 million from its satellite services, or 16 percent of the total satellite market in Indonesia, which reached $250 million annually.

PSN targeted to reap $100 million per year from its satellite services after the operation of the PSN VI satellite in 2017, Adi said.

'€œThe use of the satellite will be very important in the future as many more people need Internet access and data communication services,'€ he said.

PSN director of planning and development Dani Indra Widjanarko said the company would jump into the Internet broadband market by providing Internet broadband services for both companies and individual consumers.

'€œWe will allocate around $5 million for the business and we target to have 200,000 Internet broadband subscribers,'€ he said.

Citing Markplus Insight, Dani said the number of Internet subscribers in the country would leapfrog to 139 million in 2015 from 74.6 million this year.

Dani added the company would also expand its business portfolio by providing pay-TV services with a total investment of between $5 million and $15 million.

'€œThe country offers a huge pay-TV market, but the penetration is low because many television channels still offer free aired-programs,'€ he said.

According to Media Partners Asia, the number of pay-TV subscribers in the country will surge to 8.7 million in 2020 from 3.4 million. (koi)

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