Space Business

SWOT

Medium- to Long-Term Business Strategy

Regarding satellite communications services, in order to expand our business in the global market, we plan to commence a service using the Superbird-9, which is equipped with the latest technology called “flexible payloads,” a first for Asia, in fiscal 2025. This will be the successor to Superbird-C2, which is currently in operation, and it is a fully digital communications satellite which enables flexible on-orbit changes of coverage area and transmission capacity in line with market and customer needs.

Through this initiative, we will increase the competitiveness of our existing services while also accelerating our entry into new domains. It is thought that the space industry will play an important role in the super smart society (Society 5.0) in which a variety of objects are connected via data. The Company commenced the space intelligence business initiative from 2019 and has built the foundation of a solutions business utilizing satellite data in a wide range of domains.

Specifically, in order to commercialize a satellite data analysis information service useful for ascertaining the situation at times of disaster and for continuous national territory and infrastructure monitoring at normal times, etc., the Company was among the six companies that established Satellite Data Services Co., Ltd., and the new company aims to provide a full-scale service from fiscal 2023. Furthermore, in December 2021, the Company took a stake in iQPS Inc. as the lead investor in that company’s Series B round.* This company is a venture company which is aiming for the realization of the world’s first near real-time earth observation system using a high-resolution small SAR (Synthetic Aperture Radar) satellite. Through our business alliance with this company, we will advance the development of a satellite data business utilizing a small SAR satellite constellation which can observe a wide area of the earth periodically and automatically.

Moreover as a medium- to long-term initiative, we are focusing our efforts on building a Universal NTN (non-terrestrial network) which connects different spaces, such as the sea, sky, and outer space, etc., to each other via not only satellites but also diverse communications platforms such as the high altitude communications platform (HAPS), etc. For that reason, we have concluded a business alliance agreement with NTT Corporation regarding the space integrated computing network concept which fully utilizes space as ICT infrastructure. In fiscal 2022 as the first step under that agreement, we established the Space Compass Corporation, a joint venture, and we are aiming to create a space data center business (optical data relay service, etc.) and a space RAN business. In addition, as a government project, we are tackling research and development toward realization of a quantum cryptography communications network using satellite communications.

In the Space Business, going forward we will make an investment on over ¥150.0 billion in new domains including NTNs and we intend to realize a segment profit after tax of ¥21.0 billion in fiscal 2030.
* Series B round: the funds procurement round at the stage when the services and products have been evaluated and the business has begun to get off the ground.

Key Issues and KPIs in the Space Business

Case 1　Elimination of the Digital Divide, Taking Advantage of Characteristics of Satellite Communication, and Utilization of Satellite Communication in the Event of Disaster

Through wide coverage, multi-destination distribution, and mobility, satellite communication makes it possible to secure means of communication, including the Internet, in areas such as mountainous regions and remote islands where terrestrial lines cannot be installed, with electric power and antenna that are capable of receiving electric waves.

Through this system, what was once inconvenient becomes comfortable, and this helps to reduce the digital divide among regions. Such merits are not limited to Japan. This expansion of the communication environment contributes to the elimination of disparities in areas such as education, economy, and technologies in the least developed countries.

Moreover, as satellite communication is not much affected by natural disasters like earthquakes on the Earth
and due to its high-mobility nature, the use of VSAT (Very Small Aperture Terminal) and vehicles with Satellite News Gathering Systems, makes mobile phone services and Internet communication available even in disaster-affected areas. Furthermore, satellite communication is useful in the provision of relief and medical care in disaster-affected areas in the recovery phase.

Based on the Guidelines concerning Certification for Organizations That Contribute to Strengthening National
Resilience (February 2016, the National Resilience Promotion Office in the Cabinet Secretariat), SKY Perfect JSAT Corporation awarded of resilience certification (business continuity) from the Association for Resilience Japan.

Case 2　Provision of a Service Combining Satellite Communications and Wind Power Generation to Southeast Asia and Pacific Island Countries

In a partnership with Challenergy Inc., a company known for typhoon power generation, SKY Perfect JSAT is conducting collaborative activities aimed at operationalizing services that combine stable wind power generation with satellite communications in digitally divided areas of the world, such as Southeast Asia and Pacific island countries, where both power generation and communications infrastructure are underdeveloped.

The Magnus Vertical Axis Wind Turbine that Challenergy has developed has excellent environmental flexibility, with fewer environmental concerns in terms of noise pollution and bird strikes than conventional propeller-type wind turbines, and the capacity to achieve stable power generation both during favorable weather conditions and when there are typhoon-level winds or turbulence. Satellite communication offers the advantage of providing high-level communications service to digitally divided regions, such as remote islands and mountainous

regions, and disaster recovery communication platforms for use after a largescale disaster. This is expected to be the first technology in the world to succeed in harnessing electric power and communication to help the people living in these areas achieve a more modern way of life, instead of using unstable diesel power generation infrastructure, which is expensive and places a greater burden on the environment.

We began offering this service in the Philippines through InfiniVAN, Inc, a consolidated subsidiary of IPS, Inc., as the first introduction.

In the rural areas and islands of the Philippines, there are many areas where high-speed communication
networks such as fiber optics are undeveloped. With the spread of online classes and telework on the occasion of the spread of COVID-19, demand for satellite Internet connection services that can quickly install and use broadband environments is also increasing. Until now, InfiniVAN has expanded its mission-critical communications network for high-capacity Internet services, starting in urban areas in the Philippines. However, the addition of satellite Internet connection services provided by the SKY Perfect JSAT to its service lineup will enable it to meet high-speed Internet demand in wide areas in urban areas and rural areas without the introduction of large-scale facilities such as the construction of mobile base stations.