Guidelines for Success in the Asian Satellite Equipment Market

Bruce Elbert, President, Application Technology Strategy, Inc.

As published in SatMagazine, June-July 2003

Asian companies and governments buy technology from developed economies – most in the West but some in industrialized Asian nations. In my past experience, the buyers had a general understanding of what they wanted to do but lacked detailed knowledge necessary to acquire precisely what they needed. This does not mean that suppliers of satellite ground equipment can apply the typical selling pressure to get results. Rather, they need to work proactively with the buyer to find the right solution and offer it in a way that allows the buyer to get to where they need to go. Most importantly, buyers in Asia expect suppliers to give them value for their money; and they expect products to work the first time and thereafter. In short, they want a solid package that serves the business application so that they, too, have satisfied customers.

Since bits and pieces won’t work, the supplier has to get their act together to sell ground equipment and establish a long term, growing business base. This is important because a satisfied Asian customer is much more loyal than one in the West. Long term profits and solid relationships will result from this foundation.

I’ll describe a process of marketing and implementation that I learned during my 35 years of doing business and working in Asia. Here are the key points:

1. Understand what the customer wants to do – help them get their requirements into the right form so that they are satisfied and comfortable with the approach. In developing the first GEO mobile system in the world, our team from Hughes collaborated with potential partners in Singapore and Indonesia to establish the technical, financial and operational feasibility of the system. Having completed this effort on our own money, we were in prime position to win the hardware project – which we did.

2. Do the necessary systems engineering and design work, in consultation with the customer, so the equipment can be specified and then priced correctly.

3. At all times, be sensitive to the culture. Westerners sometimes make the mistake of seeing Asia as a monoculture when in fact it is very diverse. Business and personal styles in Malaysia, Thailand, Indonesia, Japan, Korea, Philippines, etc., have their own subsets of customs and rituals which anyone dealing with should be made aware of. On the other hand, locals understand that foreigners are unfamiliar with the fine points and are usually tolerant if they view you as doing your best to work with them honestly.

4. Work closely with the customer at every step of the process – don’t throw the solution “over the transom” and expect them to pick it up. Most buyers in Asia will see right through this shortcut.

5. On the other hand, respect the customer organization, its members and their intelligence and ability. They may not know your product but they have survived in their own environment (which in most respects is much more challenging than your own back home). Listening will reward you with facts of life that can save time and money.

6. Provide the training they need to take over. Done right, they will pick up the task. S. Gunawan, the first director of the Indonesian Palapa System, told me in 1976 that “you Americans have built this system and made it work, but now it’s our turn!” He and his Indonesian team took over and have never needed to look back. Over the years, our company sold literally millions of dollars of ground equipment and satellites as a result of gaining their acceptance and trust. Gunawan, a friend whose competence and sincerity I value to this day, rose in the ranks of government and business and attained the position of President Director of Satelindo.

7. Contracts and specifications are important, but relationships matter most. During a negotiation in Indonesia, the lead manager on the other side, R. Wikanto, said “we must come to agreement on the technical specification and statement of work. After we are done, the contract should go “in the drawer” and hopefully never be viewed again. However, if we run into difficulties, we must revisit it to resolve the issue.”

8. Expect the customer to demand everything you promised, and that you won’t waste their money. One Chinese customer stated during negotiation, “if we decide not to include something, we expect a price reduction. However, if you didn’t include something that’s needed, we expect you to provide it at no additional cost to us”.

9. Learn the markets in those countries of interest. Do this on the ground and make good friends who can help overcome hurdles and make your life easier. Agnes Yeow, currently the Regional Manager for Aon Space, Asia-Pacific Region, told me the story of her experience in Vietnam selling transponder capacity. While still new to her job as a satellite marketing person for MEASAT, she nevertheless understood that selling a solution in another Asian country required care and intelligence. She learned that rather than push her way in and try to force a sale, one should take the time to get to know the players. One should never take anything or, more importantly, anyone for granted. It turned out that a key decision maker was a reticent old gentleman dressed very plainly who sat in the back of the room. Treating everyone with dignity proved the best strategy for her success.

Technology may originate in industrialized countries, but engineers and business people the world over understand what it can do in their environment. For this we can thank higher education and more recently the Internet. Astro, the first digital DTH operator in Southeast Asia, grew to prominence by blending a western style of consumer marketing with an Asian spirit of meeting the customer on their own level. They acquired the latest DVB technology by building a team of engineers and then purchasing equipment from the West. Still, the platform for program creation and customer management was uniquely Malaysian. This is an excellent example of how Asian satellite equipment buyers demonstrate that they can and do know what they are doing, and can work effectively with Western satellite equipment suppliers. Currently, Shinsat is about to embark on one of the world’s first broadband consumer satellite Internet services called iPSTAR. Shinsat entered the satellite business 15 years ago when they purchased two satellites in the US and built a team in Thailand capable of operating and marketing the system to users throughout the region. In moving to the forefront of our industry with iPSTAR, Shinsat now offers the opportunity to reach a market potentially measured in billions, rather than millions, of subscribers. Satellite equipment suppliers who have worked with Asian companies like Shinsat are in the best position to profit from the ensuing economic recovery in the world’s most populous region.