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Japanese space startups look for growth in Southeast Asia

Region's markets less dominated by military, government business

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  © Reuters

TOKYO -- Japanese startups in the space business are rapidly expanding their operations into Southeast Asia, attracted by the wealth of opportunities in the region.

The Southeast Asian market for space services offers more diverse business opportunities than the mostly government-oriented space industry in Japan. It is also far less controlled by the military or the government than in China and India, creating a better sales environment than in these huge markets.

Infostellar, a Tokyo-based space startup, founded in 2016, provides an antenna-sharing service to allow commercial satellite operators to use antennas owned by other organizations.

Operators selling data from their satellites can use Infostellar's antenna-sharing service to extend the daily period for receiving images and other data from their satellites. One antenna can receive data from a satellite for only about 10 minutes a day.

Infostellar has developed a platform to enable universities, research institutes and other owners of satellite antennas to sell their idle antenna time.

A small device developed by the startup installed in an antenna is used to supply data received from space to satellite operators through the company's cloud computing system.

Space Shift sells palm-size satellites in overseas markets such as Singapore.

Infostellar receives service fees from the satellite operators and pays part of them to the antenna owners, serving as a middleman.

The company will first launch the service in Thailand this month and expand into Vietnam and the Philippines in June.

Currently, the company has just five antennas under contract for its sharing service but will seek to increase the number to over 100 by the end of this year.

Infostellar expects that it will win over 90% of the subscriptions to its service outside Japan, mainly in Southeast Asia.

"We are receiving inquiries about our service from potential customers in various countries including Indonesia, where there is strong demand for satellite data related to natural disasters," said Infostellar co-founder and CEO Naomi Kurahara.

Cheap satellites

Space Shift, a Tokyo-based space startup founded in 2009, sells small satellites for low prices in Southeast Asia.

It offers a palm-size satellite for about 900,000 yen ($8,080). The company is now in talks to sell the product with King Mongkut's University of Technology in Thailand and a Singaporean startup offering space education services.

Space Shift plans to sell 10 satellites in fiscal 2017, three of them overseas. The company is also offering a satellite image analysis system designed to be used for agriculture and urban planning, as well as other related products along with its satellites.

"We hope to parlay our satellite sales into opportunities to sell our space education programs and other products," said Space Shift CEO Naruo Kanemoto.

Some Japanese satellite startups are headquartered in Southeast Asia, including Astroscale. The company, which develops and sells technologies for removing space debris, was founded by Nobu Okada in Singapore in 2013.

In addition to the tax breaks the Singaporean government offers, the country's "high political neutrality" is also a key reason why Astroscale has chosen Singapore to locate its headquarters, according to Miki Ito, president of Astroscale Japan. "There are many space business companies in Singapore and it is easy to obtain information about the industry in the country."

Located near the equator, Southeast Asia also offers geographical advantages for satellite businesses. It is less costly to launch a satellite into orbit from the region.

Southeast Asia is an emerging space business market with great growth potential, offering good business opportunities for a wide range of services, including disaster response and border monitoring services.

Japan has a puny 1% share of the global market for space services and products, which is estimated to be worth a total of 36 trillion yen.

Analysts say there is little hope for the government-dependent Japanese space industry to greatly expand its global presence.

The government has embarked on policy efforts to support private-sector players in the industry. But startups looking for fast growth are already shifting the focus of their marketing strategies to overseas markets.


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