The Hindu Business Line : For a pie in the sky

After growing from Rs 40 crore to Rs 300 crore in just four years, ISRO arm Antrix is set to take off in the space technology market. Expansion of the market reach by taking the INSAT service beyond India is just one of its many plans.

THIS year, two major commercially exciting missions are on and their potency is palpable as K. R. Sridhara Murthi gently rolls out what they could mean for his company.

His is not a line of products and services that take space in print or time on the TV. We are talking about a company whose business, as its name, comes from antariksh, meaning `space.'

What you have here is probably the only one-stop shop of its kind where you would look in if your line of business has anything to do with TV channels, direct-to-home broadcasting, bank ATMs, connectivity for stock exchange trading, online lotteries, remote and rural connectivity, or infrastructure planning, earth imageries, or even if you fancied a satellite and wanted to have it launched. The only one you'd find in the country.

In 1992, when a `corporate front' was set up to market surplus capabilities from a toddler of an Indian space programme, big fish such as Boeing and Lockheed Martin in the US and the now consolidated European players were already calling the shots in the global market. They still do, but cannot really discount relatively smaller, newer players like Antrix Corporation.

In the huge sky bazaar, it would be probably unfair to compare a 12-year-old, Rs 300-crore public sector entity with well-ensconced Western commercial behemoths each doing business worth several billions of dollars a year.

Antrix's clients today include some two dozen private broadcasting channels and at least five major VSAT service providers. Doordarshan, AIR and BSNL in the public domain also ride on the INSAT satellite cluster.

There is definitely a lot of money in space, more than $100-billion global business, says Sridhara Murthi, Executive Director of Antrix, the marketing and export arm of the Department of Space and ISRO. That includes satellites ($15 billion); launchers ($8-9-billion) and ground equipment and services. The margin may be 5-25 per cent depending on where you are.

The pitfalls, too, are many: an overfull, hostile and predatory market; high insurance costs; rules often set by politics rather than economics; over-protectionism, export barriers and the missile control regime.

Antrix and ISRO Chairman, G. Madhavan Nair

Antrix and ISRO Chairman G. Madhavan Nair says there are now moves within the company, too, to reduce the cost on the user of space products and services by at least ten per cent.

Antrix's big time came in 1994-95 when the Indian remote sensing satellites IRS-1C and 1D opened the doors to the global market for top class earth imageries. There was no looking back and remote sensing — another name for specialised photographs of Earth taken from cameras on special satellites — is perhaps the biggest space market that India has captured. Today Antrix is among the top five global majors in the $50-million-plus medium resolution earth imaging market.

"IRS-1C and 1D happened at a time when the US Landsat satellite services were running out. Our imageries were the best of those times and we struck an alliance with Eosat, US, (now Space Imaging, a Lockheed Martin company) to take our products globally." These eyes in the sky are getting better and sharper and can now pick up a car, a wall or a house from a distance of 800 km. (Just imagine what it can mean to the security segment!)

By September 2004 and early 2005, Cartosat and the new generation INSAT-4A should be aloft in sky. Cartosat will be providing the next big thing in remote sensing: probably the world's first stereo pictures. Murthi is particularly enthusiastic about what Antrix could achieve with sales from these 3D pictures that can spur the digital terrain mapping industry.

Now a ground reality, remote sensing has spawned several users and value-addition services that help you make ground plans — among them urban infrastructure planners, highway and real estate developers, fibre optic service companies; petroleum pipelines, mining companies, agriculture services. It could next be a tool to measure property and fix your house tax! The scope of the spatial data based and positioning industry is endless.

As for INSAT-4A, that will be an advanced, high-powered Ku-band communications satellite that will come up just as the DTH market is taking off.

Last July, Antrix inherited from DoT/BSNL another major revenue stream, that of directly leasing transponder capacity to VSAT service providers. The switch has had a telling effect and Antrix now anticipates income from this business to jump from 10 per cent in 2002-03 to 29 per cent for 2003-04. Among its clients are domestic VSAT service providers such as Bharti BT, Hughes Escort, Comsat Max, Essel Shyam, Tatanet and a few public sector companies. The next high-powered satellite series is set to further spur the business.

Transponder leasing for broadcasters and communications companies, according to a survey done by the Satellite Industry Association last April, was alone a market of $7.3 billion globally during 2002. With at least half a dozen commercial satellites hovering over South and South-East Asia, among them Europstar, Intelsat, New Skies, Panamsat, Eutelsat, LMI, Thaicom and GE Americom Asia-Pacific, these are times of oversupply and saturating demand. Players like Antrix who sell space on the Indian INSATs have their role cut out, says Murthi.

Yet, the domestic scene that saw a massive growth of television channels and VSATs during the 1990s is still booming and that's what Antrix is pinning its hopes on. The USP is, of course, a blend of cost, better contract terms and for the clients, the simplicity of riding with an Indian operator. While broadcasters and Internet service providers can uplink directly with foreign satellites, VSATs can do so only through Antrix. That, says Murthi, is a policy beyond the company.

The future for Indian and other satellites lies in DTH — which SIA globally has estimated at a whopping US$ 42 billion two years ago. Antrix already has STAR and Zee, besides the public sector Doordarshan. The next 3-5 years should really tell how big this could get.

So much consolidation is happening in the industry that the challenges are many, says Murthi. There are both subtle and overt barriers from countries, whether you want to sell your wares there or buy their components for your programmes. On the terrestrial front, the optic fibre and mobile phones have eaten into the basic telephony pie that satellite operators relied on.

India's product strength, apart from its sharp resolution earth imageries, Murthi says, lies in the 2-tonne communications satellites which it can make as well as launch on its GSLV rocket. Internationally, too, the big, 3-4K satellites binge has failed and it's back to small and mid-sized class. "India," he says, "has had a good record with its INSATs and has caught the interest of manufacturing majors who want to work with us."

ISRO also has shown its launch prowess since 1994 for small or low-orbit satellites and has so far completed four mini launches on the PSLV. It has also earned from tracking satellites for other operators. But the big dream is to put 2K satellites in orbit and that means breaching an established market worth over $ 3-4 billon, dominated by the likes of Arianespace. India has paid the European agency nearly $60-80 million for each such launch and expects to shake off the dependence soon.

But that is just the easier part. If in the 1980s, there were just a handful of players who had a handle on space technology, there are now over 15 small and big predatory satellite makers and operators; some eight launch companies that can put these birds in space; and a host of various service providers. Even the launcher market has fallen from an average of 85 launches a year to about 60 in the last three years. That is mainly because budgetary provisions for government space programmes in the US and Europe have shrunk.

Murthi sees some hope. In the four years, Antrix has seen major growth, from a modest Rs 40 crore to almost Rs 300 crore for 2003-04. Ideally a third of the revenue could come from telecom services; 20 per cent from IRS data and applications; the rest from launches and satellite services. On the anvil is expansion of the market reach by taking the INSAT service beyond India; pushing the 2K satellite business; offering an innovative mix of advanced imageries; capturing the DTH, broadcast market, and exploring some alliances with the private sector. "This could be difficult but this is where we are headed."

So watch out for that space.

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