Thursday, August 13, 2009

Higher bandwidth sales help Thaicom break even

Writer: SRISAMORN PHOOSUPHANUSORN

Published: 14/08/2009 at 12:00 AM
Newspaper section: Business

Thaicom Plc, the country's sole satellite-service provider, expects to break even this year following several consecutive quarterly losses, helped by higher bandwidth sales from its iPSTAR broadband satellite.

First-half bandwidth sales this year increased 27.5% from the second half of 2008. The growth rate is expected to double to 50% in the second half of 2009, driven by high demand from India.

"We expect iPSTAR's bandwidth usage to reach 15% this year, up from 10% currently, which allows our 45-gigabit satellite to break even," said Tanadit Charoenchan, executive vice-president for finance of Thaicom.

Thaicom yesterday reported a profit of 199 million baht in the second quarter, compared with a loss of 282 million in the same period last year and a loss of 220 million in the first quarter. Revenue in the second quarter rose 3.4% year-on-year to 1.75 billion baht, of which 510 million came from iPSTAR earnings.

For the first half the company reported a consolidated net loss of 21.54 million baht, compared with a loss of 1.14 million a year earlier. The company has 1.217 billion baht in cash with a debt-to-equity ratio of 0.54 times.

Mr Tanadit said revenue in the second half was expected to jump significantly, fuelled mainly by expected strong demand from China and India. Thaicom has two gateways in Mumbai and Delhi each with a combined seven-gigabit capacity.

He said Australia was another potential market thanks to the government's policy of promoting high-speed broadband internet usage.

Japan, Indonesia, Malaysia and the Philippines will also be key markets for iPSTAR bandwidth leasing next year.

Mr Tanadit attributed the revenue improvement to the company's new policy that focuses on providing bandwidth rental service from iPSTAR rather than increasing one-time user sales that provided a lower margin.

Thaicom also implemented a business restructuring plan that focused on more specific service segments. The company grouped its satellite commercial services into two segments: conventional broadcast services for its Thaicom 1, 2 and 5, and broadband and internet protocol services served by the iPSTAR broadband satellite.

Thaicom shares (THCOM) closed yesterday on the Stock Exchange of Thailand at 6.85 baht, up 15 satang, in trade worth 108.5 million baht.

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