EchoStar enters Asia DTH market

Downstream move comes with $53 mil investment

HONG KONG -- Pay TV giant EchoStar Corp. is expanding into the Asian DTH market following the creation of a joint venture with regional satellite operator Asia Satellite Telecommunications.

The new service, expected to begin transmission in the second half of the year, will use the AsiaSat 4 satellite to broadcast an all-digital mix of video and audio channels to DTH consumers using small satellite antennas.

In an announcement Tuesday, the companies said they will each invest $17.5 million in the new venture and together provide it with another $18 million in shareholder loans.

The announcement identified Hong Kong, Macau and Taiwan among the first territories where the service will operate. Details of the programming mix and the new venture's retail strategy are expected to be announced over the next months.

"Cable is dominant throughout much of Asia, but DTH has big potential in the region, especially those regions not well served by cable, we see them as very complementary," an AsiaSat spokesman in Hong Kong said. "We are also planning a unique offering of channels that reflect Asia's multicultural nature."

For Echostar, which has DTH operations in North America and Europe, the deal gives it a toehold in one of the world's fastest-growing regions. "This joint venture makes it possible to enter the growing Asian market that seeks a popular lineup of all-digital television channels at an attractive price," said Steve Schaver, president of EchoStar International Corp.

For Hong Kong-listed AsiaSat, the deal is a chance to move downstream into a retail business. "Instead of complete reliance on the satellite transponder capacity leasing business, the investment will allow AsiaSat to diversify into the growing DTH business. In addition, the investment will help to increase utilisation rate for AsiaSat's existing transponders since capacity will be provided to the JV Company," the company said in a stock market filing.

The joint venture will be run by a CEO appointed by EchoStar and a CFO appointed by AsiaSat.