SET-listed satellite service provider Thaicom has unveiled its 15-billion-baht satellite investment plan, including the construction of three new satellites for the 119.5° East slot.
Thaicom's subsidiary Space Tech Innovation (STI) secured the 119.5° E, 120° E and 78.5° E slots at the satellite orbital slot auction held in January.
Thaicom previously operated the Thaicom 4 satellite on 119.5° E and Thaicom 6 on 78.5° E, but ownership of the two satellites was transferred to the Ministry of Digital Economy and Society (DES) after the firm's concession expired in September 2021.
The DES Ministry then assigned National Telecom (NT) Public Company Limited to handle the two satellites until their engineering lifespan expires.
Thaicom later purchased part of the bandwidth capacity on Thaicom 4 and 6 satellites to provide the services.
Thaicom chief executive Patompob Suwansiri said the board has approved STI's satellite investment plan worth 15.2 billion baht, focusing on the 119.5° E slot.
This includes the construction of three satellites to be sent to the 119.5° E slot and related expenses worth 14.4 billion baht in total.
Another 797 million baht involves licence fees for the three satellite orbital slots it obtained.
The focus will be on the construction of the three satellites for the 119.5° E slot as the engineering lifespan of Thaicom 4 is approaching to ensure continued services, he said.
Within the next three years STI will launch a satellite into the 78.5° E slot to retain the operating rights. The company still has some time to consider the investment plan.
"The investment in the satellite project is a strategically important business decision," said Mr Patompob. "This ensures Thaicom can continue to serve domestic and foreign customers and earn their trust."
The move will strengthen investors' confidence and create additional value for shareholders in the long run, he said.
The project's funding will stem from loans from financial institutions -- around 65%-85% of the total investment amount.
The remaining costs will be covered by the proceeds from capital increases by both Thaicom and STI as well as cash flow in STI.
Thaicom reported core profit of 527 million baht in 2022, a jump of 995% from a year before, according to Mr Patompob.
Although Thaicom saw a decline in revenue from satellite and related services, service costs dropped due to structural changes after the company's satellite concession expired, resulting in an increase in core profit.
The firm reported net profit of 42 million baht in 2022, a decline of 70.7% from the year before.
Pisut Ngamvijitvong, senior equity research analyst at Kasikorn Securities (KS), said Thaicom's board indicated the firm is likely to spend a year conducting a feasibility study for the investment in the 120° E and 78.5° E slots.
For the 119.5° E slot, the first two satellites are expected to be launched in late 2024 and the third one early in 2027, he said.
The first two satellites are small-sized geosynchronous high-throughput satellites, each of which will have the capacity of 10 gigabits per second.
Each satellite is estimated to cost 2.2 billion baht with a lifespan of eight years.
The third is a large satellite with a 100-Gbps capacity. It is estimated to cost 7.9 billion baht with a lifespan of 15 years, Mr Pisut said.
"KS remains cautious about Thaicom's operating results as its operation would be stagnant from 2023 to 2024 before the launch of the new satellites," he said.