WASHINGTON — Sky Perfect JSAT operates 18 satellites, more than any other Asian telecom operator. JSAT’s scale has allowed it to make industry-shaping investments in technologies ranging from antennas to drones.
But, like many of the world’s largest operators, JSAT’s revenue has been falling.
Since 2015, Tokyo-based JSAT has invested in flat-panel antenna builder Kymeta, megaconstellation startup LeoSat, drone builder Enroute, maritime connectivity provider KVH, and an Earth-observation venture that hopes to become the next Planet: AxelSpace (save for the $9 million investment in Enroute and $4.5 million in KVH, JSAT declined to reveal the size of its investments). The company also signed a launch contract with Blue Origin for a yet-to-be-procured satellite, supporting the business case for the New Glenn reusable launch vehicle.
Despite these investments, JSAT’s revenue fell roughly 25 percent last year to $1.3 billion — its lowest full-year total in the last five years. Profits fell by 35 percent to $1 million, a four-year low.
Shinji Takada, Sky Perfect JSAT’s president and chief executive, attributed last year’s drop to a decline in satellite television subscribers and the two-year launch delay of the DSN-1 payload that JSAT operates under contract for the Japanese Ministry of Defense.
Expecting sales to shrink further before growing again, Takada told SpaceNews JSAT is cutting costs, but didn’t describe specific changes.
The X-band DSN-1 payload (also known as Kirameki-1) launched as part of JSAT’s Superbird-8 satellite in April on an Ariane 5 rocket. JSAT expects DSN-1 operations will now make up for missed revenues.
A shipping incident that damaged the first Mitsubishi Electric-built satellite in 2016, caused the two-year launch delay.
In broadcast, JSAT is seeking to cultivate 4K ultra-HD channels in Japan, a region where such bandwidth-intensive broadcasts have gained early adopter traction similar to the U.S. and Western Europe.
JSAT is also preparing for broadband opportunities using satellites in multiple orbits. Takada said High Altitude Platforms (HAPS) — a technology that has drawn interest from Google, Facebook, Airbus and Thales — are also of interest.
In an interview with SpaceNews, Takada discussed future satellites, orbits and technologies as well as new sources of revenue generation.
JSAT has an investment in low Earth orbit startup LeoSat and has two geostationary high-throughput satellites (HTS), JCSAT-18 and Horizons-3e, under construction. Which orbit is better for HTS?
Needless to say, each orbit has its own unique benefits. JSAT is currently at the stage where we carefully assess and restructure the right balance of conventional geostationary, HTS-geostationary, and other lower orbits. As we all are aware, this is quite a challenging time for us facing possible oversupply situations with new orbits and technology, but are also excited to explore new business. Our vision extends to not only geostationary or low Earth orbits, but also to even lower altitudes such as for HAPS and drones.
What synergies do you see between drone and satellite?
JSAT is confident that the business drone market will keep growing. On top of that, we are developing a system to control BVLOS, beyond-visual-line-of-sight drones, by the use of satellite communications. As one of our steps to realize the system, JSAT has conducted, jointly with Japanese government agency NEDO, the New Energy and Industrial Technology Development Organization, several trials to confirm the performance of communications between BVLOS drones with a satellite as well as HAPS.
Satellite operators are ordering spacecraft with hundreds of Gbps or even over a terabit of capacity. Will Sky Perfect JSAT join this trend?
As the technology evolves and the cost goes down, I think it is only a matter of time that any satellite operator would be able to launch capacity of such magnitude and provide services at a price that is acceptable to the market. It would be essential for us to identify the right timing, keeping our eyes open to both technology evolutions and customer demands.
Do you have plans for additional satellites beyond those currently ordered?
We have started studies for replacements of a few satellites in orbit which will come to end of life in several years. In addition, we are continuously in discussion for new [orbital] slots and opportunities with our partners and customers. Again, finding the balanced mix of conventional GEO, HTS GEO and other orbits and services will be the key to our growth strategy and wide varieties of consideration must be reflected in those studies.
Some in the industry are calling for consolidation as a means to reduce oversupply of capacity. Is Sky Perfect JSAT interested in M&A activity?
M&A could be a very attractive and right growth strategy for certain purposes, and companies in this industry should not exclude it from the options. We believe, however, partnerships have been one of JSAT’s key assets and we continue to strive for designing new ways of collaboration to create better and unique services.
What is the most important evolution the satellite industry needs in the next five years: lower launch costs, cheaper spacecraft, or better user terminals?
All three … but higher throughputs and flexibility are equally important. JSAT will not hesitate adopting such evolutions, which are demonstrated by our partnerships with Kymeta and Blue Origin. As means to reduce the lifecycle cost, we are also watching the progress of satellite life extension services as well as small-but-low-cost spacecraft manufacturing technology, and are very much looking forward to those new improvements.
Is remote sensing an area of future growth for Sky Perfect JSAT? What will follow your work with Planet?
I have a belief that JSAT’s potential goes beyond broadcasting and telecommunications. We are to create, in partnership with the new companies like Planet, new business utilizing data from the space.
Our business with Planet’s images is actually expanding, especially in the government sector in Japan. In addition, Japanese start-up, Axelspace, in whom JSAT earlier invested, plans AxelGlobe, a microsatellite constellation project having the ability to image the whole civilized world with a resolution of 2.5 meters — enough to distinguish cars — every day.
On top of optical images, we are studying expansion into Synthetic Aperture Radar images. As for the ground segment business for low-Earth orbit systems, a Japanese government agency and Spire Global have already given us their confidence by installing tracking antennas at one of our facilities. JSAT also has a strategic alliance with number one global ground station provider, Kongsberg Satellite Services (KSAT), to expand its global ground station network.
For flat panel antennas to succeed, what price and performance requirements do they need to reach? Where do you see the greatest application for flat panel antennas from Kymeta and others?
Last year, JSAT demonstrated 4 Mbps HD transmission using the Kymeta antenna mounted on an SUV-type vehicle to potential users in Japan. We are happy to say that its performance has been well received by customers at present, though better throughput may be required in future. We view first responders in emergency situations, such as the government, telco and mass media, as early adopters. As the cost for such antennas is declining, applications will spread over the other sectors including the connected cars and other internet of things connections.
How many 4K ultra-HD channels is Sky Perfect JSAT broadcasting today? How many do you anticipate broadcasting in the coming years?
We have reorganized our 4K ultra-HD channels at our SKY PerfecTV! Premium Service, and now broadcast two 4K ultra-HD channels. In January 2017, the Ministry of Internal Affairs and Communications certified eight 4K channels broadcasting at 110 degrees east. While channel-planning is underway, we anticipate the launch of new 4K/8K this December would be a good driver for the growth of this industry.
Will you follow fellow Japanese satellite operator BSAT in also developing 8K broadcasts?
As you know, Sky Perfect JSAT has been facilitating the 4K ultra-HD environment, and hopes a lot more people can experience its excellent quality. Our facilitation of 4K would play a part in the dissemination of 8K.