China's Untapped Satellite Broadcasting and Dish Market ? Satellite ...

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Illegal satellite dishes

Economic liberalizations and improvement in income levels in developing countries in Asia are making the region a key part of the growth strategy of global satellite communications vendors. China and India are poised grow into a huge satcom market despite current political and market obstacles. China has more a billion of inhabitants, and the local economy is the third largest in the world, growing at the fastest rate for the past 30 years. The gray market for cable television is growing in many Chinese cities, which is a good sign of growing middle class population who seek international shows. The black market for cable TV and satellite dishes allows cheap access to BBC, CNN , MTV and the likes.

Analysts estimate the number of illegal satellite dishes in China at around 50-60 million. The black market owed its growth to a regulation that only allows expatriates and hotel operators in the country to use satellite dishes. This regulation has been in place since the early 90s. As of 2008, more than 10 million dishes has the ability to receive signals overseas in DVB-S (Digital Video Broadcasting-Satellite) standards got into China. And more than 40 million gray-market dishes were believed to be shipped in metropolitan areas for installation last year.

China DBSAT, known as the second largest operator in Asia, is tasked to act as the gatekeeper to the Chinese market. Founded in 2006, the company operates Zhongxing-9, a joint venture of China Satellite Communications Corp. and Sino Satellite Communications Co., Ltd.?With five in-orbit satellites it provides satellite bandwidth and integrated satellite communications services for government agencies, broadcasting networks, telecommunications providers, and other commercial enterprises. Except AsiaSat and APT Satellite Holdings, non-Chinese satellite communications providers are forbidden from delivering wireless service directly to Chinese end-users.

US has heavily criticized China for its protectionist policy. China has issued tougher measures to regulate the use of satellite dishes, but the black market for satellite dishes is unlikely to dwindle soon.?China?s State Administration of Radio, Film and Television (SARFT) has no mandate to enforce compliance across local governments.

According to SARFT, more than than 400 million household population are in underserved regions, and the estimated 200 million households with TV but no cable service are getting signals via analog terrestrial transmission or illegal satellite dish or set-top box. Terry Lu, chairman of DVN Group, estimated that country?s digital TV user-base at 250 million. But this huge market is not yet fully tapped due to regulatory restrictions.

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