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Saturday, March 15, 2008

Enough of “schlock” ads!

Deriding free-to-air TV as an "idjit box" isn't always an attack on its programming, maddeningly pedestrian as this is.

This observation also refers to its advertising.

Most TV ads, however, seem to do the job of selling to their markets. The ads are sufficient for this purpose: they're easy to understand. And really good sometimes.

But there are some Smeagol-type ads that really rile you. These "schlock" ads fail where they count the most: bringing in pesos for advertisers.

No one in his right mind buys a product one dislikes intensely because of its schlock advertising.

But schlock ads go on and on as part of advertising's need to create recall. The danger is that schlock propaganda gives a blatantly twisted appearance of "reality".

And that twisted reality is debasing. Schlock ads lead one to conclude Filipinas are cheap sluts begging to be screwed. A free drink or a whiff of this cologne and she's a cinch.

Schlock tells viewers that white skin is the right skin color, never mind that the Filipino is overwhelmingly "kayumanggi". Or that you need a dermatologist to bleach your skin safely.

Schlock gives one the notion that "happily ever after land" is a zoo reserved for teenage girls flaunting shiny, soft hair and grim thugs sporting five o'clock shadows.

There's no Mr. Nice Guy in schlock land. Only endless local versions of Bill and Ted ("Excellent, dude!") who make the dumb and dumber routine look sillier and sillier.

Worse, schlock gives one the idea that the agencies creating them are crewed by juvenile minds stuck in the self-gratification phase of puberty.

Ad guys, however, are probably right when they say the market doesn't go for chic U.S.-type advertising.

They'll say clients approved the concept and execution of these odes to schlock. They'll say they pitched these bean counters really, really creative world-beaters that would have stood a chance at a bundle of Clios.

But all they got for sweating blood was a sneer, followed by a chorus of self-righteous bean counter voices intoning, "It's not creative unless it sells! The target market is king. So, give us schlock that sells!"

So, is advertising the only one to blame for schlock ads? The market's also the matter, isn't it?

Creative advertising is a really tough business requiring the iron nerves of a Roman gladiator. I've worked on both sides; so I've some idea of what it's like to create and to approve.

I salute all you ad guys battling against the limitations of your markets. It's not easy being a Porsche 911 Turbo S on a highway packed with Trabants.

You simply can't barrel through all the deadweight in front of you. Doing that will get you fired.

So, what's to be done? Now, that's a real creative challenge, but do spare us from more schlock when you surmount these problems.

Schlock's a bimbo: sexy, beguiling and not much else. Even Dr. Henry Frankenstein wouldn't have assembled as shallow a creature.

He wasn't that mad. Was he?

Saturday, March 8, 2008

The 4 Rs of a good education

Back in the good old days, a good education was simply the 3 Rs: readin’, ‘ritin’, ‘rithmetic. Nowadays, one needs a 4th R to get a good education: ‘rots of ‘ard cash.

This stricture applies to many parents who’d rather have their children study in expensive private schools—if they could afford the tuition—and to government which needs ‘rots of ‘ard cash to run the public school system.

But finding a lot of that 4th R to really improve education is a Herculean labor for a government swamped by a total outstanding debt of P3.4 trillion (78% of GDP in 2003) that eats up a quarter of the budget as payment. In other words, for every peso collected from taxes, 25 centavos goes to debt payment.

Pres. Gloria Arroyo, however, has set aside P135 billion for education out of the P908 billion national budget for 2005. Education continues to receive the largest sector share of the budget, as it did in 2004, which is a good indication of this government’s priorities.

Also in this year’s budget is an additional P1 billion for the construction of classrooms in areas with severe classroom deficiencies. Some P600 million will go to the maintenance expenses of schools to cope with the projected increase in students and to improve the quality of education. An additional P1 billion has also been included for the hiring of new teachers.

For 2005, Pres. Arroyo said the government will focus education on standardizing classroom instruction; closing the classroom gap; upgrading the Math, Science and English curriculum and providing computers in every high school.

Education’s 15% share of tax pesos might seem huge, but as the Business Journal discovered when talking to Department of Education (DepEd) Secretary Florencio Abad and Atty. Julito Vitriolo, Deputy Executive Director of the Commission on Higher Education (CHED), a lot more cash is needed to fix Philippine education. A whole ‘rot more.

Improving college education
“If money were no object, CHED would probably need P50 billion to do a good job,” said Vitriolo, who coordinates operations of the CHED Secretariat.

That’s about 50 times CHED’s budget for this year (P1.1 billion) and 45% of DepEd’s current P111 billion budget. It also starkly illustrates the magnitude of the problems facing tertiary education that require fixing.

Established in 1994, CHED governs both private and public higher education institutions and degree granting programs in all tertiary education institutions. It develops higher education by upgrading quality through different interventions and by aggressively monitoring these interventions.

CHED oversees some 1,600 colleges and universities nationwide. Of these, 111 are state colleges and universities; the rest are private schools. CHED is administratively attached to the Office of the President. CHED employs some 600 people. On the other hand, DepEd looks after elementary and high school education, both public and private.

Vitriolo said a huge part of this P50 billion “wish ko lang” (“I wish”) budget would go to expanding CHED’s flagship Centers of Excellence/Development (COE/COD) program.

This program, which eats up some P200 million of CHED’s funds, aims to raise the quality of undergraduate and graduate education to levels comparable to international standards. CHED sees the 260 COE/CODs as indicators of higher education quality. In theory, the existence of COE/CODs is also expected to help raise the quality of schools in their locales.

Having more money would also enable CHED to expand a scholarship program that assisted just 40,000 of 2.5 million college students in 2002. There were some 60,000 scholars in 2000 and 45,000 in 2001. CHED credits funding cuts for the drop in the numbers of its Student Financial Assistance Program scholars.

“More money will also allow us to train more teachers, train more education managers such as deans and school presidents and improve our monitoring and evaluation,” Vitriolo pointed out.

Board exams
Taken together, these interventions are all geared towards improving the quality of college students and the teachers responsible for their educational growth. The ideal outcome of all these interventions would be marked improvements in the results of the different board examinations. As it stands now, the board exams are the only visible measures of the quality of Philippine tertiary education.

Vitriolo, however, noted that quality hasn’t improved dramatically in the board exams compared to the effort expended on it.

“To be frank, the results of the board exams don’t justify what has been put into it,” said Vitriolo.

CHED data shows that the average passing score in national board or licensure exams in 1999-2000 was 44%, up slightly from 42% in 1994-1995. It also reveals that courses with the highest passing rates were landscape architecture (67% from 1994-2000) and health related fields (medicine, pharmacy and nursing).

In contrast, accounting and customs administration had the lowest passing rates (17% for accounting and 9.9% for customs administration from 1994-2000). CHED uses 40 board exams as its basis for evaluating the quality of higher education and individual schools. Its goal is to raise the average passing rate to 49% by 2004.

A major culprit in these less than glittering results is a budget that severely limits interventions that could improve student and teacher quality.

“Maliit ‘yon,” (“It’s small”) said Vitriolo of CHED’s P1.1 billion budget, noting that P500 million of this amount is being spent to support 40,000 scholars.

Vitriolo, however, revealed that other non-budgetary sources added at least P1.5 to P2 billion more to the CHED budget. These special accounts include the travel tax, professional regulatory fees and the Lotto, from which CHED receives a small percentage.

He does believe that throwing money at the problem of improving the quality of college education will help a lot, but won’t solve all of CHED’s problems.

“If we had all the money we need, many problems would go away,” he said.

“In terms of input, we could address problems in training, research and development. As for outcomes (the board exams), I can’t guarantee. More money might not make a difference. It is problematic whether the results of the board exams will improve.”

He hesitates to pin the blame on any organization since all the organizations and institutions involved in education are doing what they can with what little they have. But the quality of college graduates also depends on how these graduates did in elementary and high school.

Not the basic solution
Judging from recent remarks by DepEd Secretary Abad, however, significantly improving the quality of higher education might cost a lot more than Vitriolo’s dream budget.

Although he hesitated to give a concrete figure, Abad told the Business Journal that if they had their ideal budget, DepEd’s priority areas of spending would be the institutionalization of a universal pre-schooling system; school-feeding programs; intensive readership programs; teacher training; principal training and filling resource gaps.

“The education sector does need money, but money is not the basic solution to improving basic education,” Abad noted.

“We are a poor country in a fiscal crisis—this is a reality. But if we make this situation an excuse for poor performance, we will never be able to improve. We cannot wait for the money to come. We’ll end up waiting forever!

“We must work with whatever we have now. We have to manage our little resources efficiently and effectively in order to turn this education crisis around.

“And it is possible. Let me tell you, there are only two absolutely crucial ingredients in the education process: the teacher and the student. As long as you have a good teacher and a willing student, learning will take place.”

In support of this observation, Abad revealed that the majority of top-scoring schools in the recent National Achievement Test (NAT) come not from wealthy cities but from poor rural areas

“Out of the 5,000 public high schools in the country, the top one with a score of nearly 87% was a tiny school located on a mountaintop in Northern Samar: Lope de Vega National High School.

“Also, schools located in the NCR get hundreds of millions of pesos from their local governments. Yet not one division in the NCR scored higher than 75% on the NAT. This just goes to show that you may have all the resources in the world, but still not achieve. And you may have nothing at all, but achievement can still be possible.

“What it really takes to create a good school is a supportive community where officials, principals, teachers, and parents work together for their children’s education.

“We have to make the most of what we have now in order to turn the education crisis around. Besides, everyone already wants to help education. If we can produce real results for now, given our limitations, I am sure that even more support will come in. Everyone will want to give to education. But for now we should just focus on producing results.”

Other solutions to improving education quality are the addition of Grade 7 and a 5th year in high school. Both options have drawn heavy flak from parents and teachers, who will shoulder the burden of these new impositions. Abad said DepEd will retain to the existing set-up—for now.

“We agree that the Philippine’s current 10-year education system is too short and we support the idea of adding an additional 7th grade and 5th year. Unfortunately, adding two more years to our cycle will cost money—for more teachers, more materials, more classrooms, everything. Until our budget for education is increased, we have to stick with the ten years. However, we will aim for a 12-year cycle in the long run.”

89% to salaries
Today, however, DepEd contents itself with trying to maximize the resources it has in order to produce results.

“While the DepED’s budget may be high compared to the budgets of other government departments, our P111 billion is still not enough to meet our resource gaps,” Abad said.

“89% of our budget goes to salaries, while 14% goes to operating expenses and seven percent goes to bridging the resource gap in terms of teachers, classrooms, textbooks, furniture and the like. We need to build an additional 44,000 classrooms, but we only have enough money to build 6,000.

“We need to hire 27,000 more teachers, but we can only pay 10,000 more. Our budget may grow by two percent every year, but this is not fast enough to catch up with the six percent inflation rate and two percent population increase.”

Abad said that this June, DepEd will implement a two-shift policy in schools thereby decreasing the lack of classrooms by 39,000. DepEd is also implementing the ESC, a program that partly subsidizes the tuition fees of public school students who opt to enroll in private schools.

“We are also urging local governments to be more aggressive in collecting their Special Education Funds, which can add an additional P9 billion to LGU funds for education. We are also tapping social capital: last year we launched the Brigada Eskwela program, which mobilized parents and communities across the country to generate P750 million worth of man-hours and materials for the repair of our classrooms.”

DepEd is also tapping the private sector through its Adopt-a-School program, which has also generated hundreds of millions of pesos in donated buildings. The Sagip Eskwela program launched last January has since raised P114 million for the rehabilitation of schools that were damaged by typhoons last year.

“Schools First Initiative”
DepEd’s current solution to arrest the deteriorating quality of elementary and high school education is the “Schools First Initiative.” Basically, the Schools First Initiative empowers communities to manage their schools. As Abad put it:

“A problem at the DepEd for many years was that the management of schools has always been too centralized. The Central Office cannot be well informed about the unique needs of each and every one of our 41,000 schools.

“It is actually the teachers, parents, principals, and local officials who know the real score about what their own schools need to improve. They are also the ones who are directly concerned with how well their children are learning in school.”

In the meantime, regional and division offices of DepEd will provide the necessary support to schools and monitoring services. The Central Office will take charge of policy, standards setting, budgeting and monitoring. Central Office will do the steering while individual communities will do the rowing.

Abad also called on private schools to help decongest crowded public schools by helping parents through education service contracting or through other more equitable tuition arrangements.

Work together in educational reform
Abad told private educators that a crisis in Philippine education does exist and that the only way to solve it would be for private and public schools to work together in educational reform.

He emphasized that the wide gap in quality between private and public schools might, in fact, have increased since 1997 “to the disadvantage of the 17 million students in our public schools.”

He noted that the Trends in Mathematics Survey conducted in 2003 in which both private and public schools took part showed the Philippines as 41st among 45 countries in high school math, and 42nd for high school science.

In the 2004 high school readiness test, only 0.6 percent scored 75 percent or above, equivalent to 8,000 students out of 1.2 million examinees. Abad said the competency of these students is only at the Grade 4 level in public schools.

Abad observed that only 32 out of 100 students graduate from high school. Other data shows that only 20 high school graduates will go on to college with half this number graduating.

Teacher quality is also a matter for concern. Only 19% of public school teachers scored 75% or better in the English self-assessment test for teachers.

“That’s no more than 10,000 out of around 51,000 teachers,” said Abad.
“That means some 41,000 of our teachers have inadequate proficiency in the English language”.

While these grim numbers might give one pause, DepEd also sees them as challenges amenable to some solution by more funding. And any success in improving the quality of high school graduates is bound to impact positively on the quality of college graduates.

But again, attaining this decades-old aim will need more of the 4th R than the government can afford. Which brings us back to the basic question: “How does one improve the quality of Philippine education?”

It’s a chicken and egg thing.

Not even a whimper

It began with a huge bang 17 years ago but not much has been heard of it since.

The Generics Law exploded like a Daisy Cutter bomb onto the Philippine pharmaceutical scene in 1987. At the time, it threatened to blow away expensive branded pharmaceuticals and their makers and replace them with cheaper (but equally effective) generic medicines the masses could well afford.

It also ignited a painful debate on the pros and cons of generic medicine that saw the medical profession come down on the side of branded medicines, while the government of President Cory Aquino led by contentious health secretary Alran Bengzon championed generics. The public was caught somewhere in-between.

The government won. Generics today account for over 80% of total pharma industry revenues. The pharma companies won, too. Branded medicines, now more expensive than ever, are still with us.

And the public doesn’t seem to care that much about branded or generic medicine. Just as long as the medicines they buy make them well.

Eufe Tantia, assistant vice president of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), noted the government used to mark Generics Month in September with lavish activities aimed at drumming up the advantages of generics against branded drugs.

“I can’t remember the last time the government celebrated Generics Month,” he said.

He’s certain the government did make a big deal out of promoting generics before. As national sales manager of pharma firm Eli Lilly Philippines, Tantia recalls being invited by the Department of Health to heavily promoted Generics Month activities in the late 1980s and early 90s.

Now, only Mercury Drug Corporation apparently bothers to celebrate Generics Month big time. This year, Mercury had a Generics Awareness Month 30-day Sale at all its branches nationwide. From the government, not even a whimper.

But the government’s apparent lack of interest in aggressively pushing generics doesn’t unduly worry Tantia.

“The Generics Law has been successful in providing access to a wider range of medicines,” he pointed out. “What is important is that the public knows it has a choice.”

Tantia, however, bemoans the dearth of public information about generics. But this is probably more a question of priorities as President Arroyo’s cash strapped government struggles with a dangerous fiscal crisis.

The bold decision of the Aquino administration to introduce generic alternatives to branded drugs, however, is widely seen as being a healthy shot in the arm for consumers and the pharma industry.

That industry today is dominated by generics. In 2003, the total pharmaceutical market was worth from P75 to P80 billion and grew 9% over 2002.

Tantia estimates that branded generics accounted for some 80% of the total while pure generic products made up only 3% of total market. Prescription medicines took care of the remaining market share. Another source said branded generics had an 18-20% compound annual growth rate over the last five years.

Branded generics are medicines whose patents have expired and are sold under the name of the company making them (RiteMed Paracetamol and Pharex Ciprofloxacin, for example). There is no brand name in this case (such as Biogesic or Ciprobay).

Tantia said that industry projections show revenues in 2004 exceeding 2003. This growth, however, is being driven by price increases. Volumes are expected to remain flat.

“Pharma industry growth is being driven by branded generics and new products such as Lipitor, Viagra and Cialis,” according to Tantia.

Tomas Agana, president of Pharex Health Corporation, one of the two leading generics manufacturers, concurs that branded generics is the leading growth driver for the pharma industry.

“We’re experiencing double digit growth over last year,” said Agana. “Growth is still very positive for the entire year despite recent economic news.”

The other generics leader is RiteMed, a division of United Laboratories, the country’s largest pharma firm. Pharex is a wholly owned subsidiary of Pascual Laboratories. Both firms control about 60-70% of the market for branded generics.

Pharex is particularly strong in Metro Manila and Mindanao. Agana revealed that much of Pharex’s growth came from its antibiotic products such as amoxicillin, erythromycin and cloxacillin.

Revenue growth is being helped along by a growing awareness about generics by the public and the increasing number of prescriptions from doctors. Agana said Pharex is helping increase public awareness of generics by conducting plant tours and explaining their products’ quality efficacy profiles.

Because of its cheapness, generics are more ubiquitous than branded pharmaceuticals. This price advantage has led to an increasing number of generics such as paracetamol, loperamide and carbocisteine becoming available in sari-sari stores alongside soft drinks and instant noodles.

Some enterprising entrepreneurs are doing big business supplying sari-sari stores and small drug stores with a broad range of generics. It’s a lucrative small-scale business at the barangay level.

Paracetamol, used for slight fever and minor body pains, is available from P0.40 to P0.60 per 500mg pill wholesale. Barangay generics businessmen sell these pills to sari-sari stores at about P1.00 each, and these stores retail them at anywhere from P1.50 to P2.00. Considering that Biogesic, the popular branded paracetamol, retails at P3.50 and up in sari-sari stores, it’s small wonder that generic medicines are running away with business at the barangay.

More bothersome, however, are reports that some sari-sari stores now retail amoxicillin, an antibiotic that should be available only through prescription at registered pharmacies. Some doctors are concerned that the cheapness of generics might well lead to other, more potent generic antibiotics such as cefalexin or diabetes control drugs such as metformin becoming available at sari-sari stores without a doctor’s prescription.

Combating this looming proliferation of generic antibiotics and other prescription drugs with generic equivalents is not helped any by the worsening brain drain among doctors.

Recent reports that the Armed Forces of the Philippines is finding it difficult replacing doctors and nurses lost to foreign countries is yet another painful manifestation of a brain drain now so severe that hospitals are unable to open more floors because they lack qualified medical personnel.

“It’s the economy,” said Dr. Perla Santos-Ocampo, who for six years was Chancellor of the UP College of Medicine in Manila. She was also past president of the Philippine Medical Association and is now president of the National Academy of Science and Technology (NAST).

“It’s getting tougher (for doctors) because patients are not coming unless they are very sick,” she explained. “For the middle class and lower middle class, the salaries they have go to food and the schooling of children.”

This clear link between the health of the economy and that of the medical profession means that the tough times battering the medical practice will persist as long as the economy remains in trouble.

“Long-term we (doctors) can’t do a thing about the economy. Short-term, we can increase the stipends of residents but many hospitals are in the red. Something has to be done,” she said.

Her concern for residents is understandable: residents are frontliners in the healthcare system. They’re usually the first doctors patients come into contact with at hospitals, hence their key role in diagnosis and treatment.

The problems are tougher on new doctors who have to contend with expensive rents and equipment should they open their practice in Metro Manila. It’s somewhat easier in the provinces, especially if a doctor decides to set up practice in his community.

Dr. Marisa Sarreal, a general pediatrician in the practice for 24 years, echoes Dr. Santos-Ocampo’s observation about the economy being the crux of the problem facing the medical profession.

“It’s really tougher now because of the economy,” she stated. “Nobody’s saying I’m not affected by the present economic situation. It’s gradually becoming tougher because even with the same volume of patients, expenses are becoming bigger.”

She copes by belt tightening (no easy task for a mother of six) and by smart business sense. She works out of her home in residential Baclaran and hasn’t increased her consultation fee.

“Maintaining my fee is one way to keep patients. It’s give and take. I tell them I’ll help them by not increasing my fee but ask them to help me by consulting with me when their children get sick. My patients keep coming back to me.”

But the more serious problem facing practicing physicians is what doctors call “The Nursing Phenomenon.” It’s that tragic scenario where practicing doctors choose to take up Nursing to get out of the country and earn more.

“In the Philippine setting, it’s really something,” said Dr. Santos-Ocampo. “Even doctors with good practices are taking up Nursing. Their main purpose is to get out of the country.”

Although it’s still studying the phenomenon, NAST estimates that about one-third of those who passed last year’s Nursing board exam were graduates of other courses. Not all of these two-course graduates finished medicine, but NAST believes medical graduates accounted for a good portion of the total.

The Philippine Nurses Association, however, estimates that some 2,000 doctors enrolled in nursing schools nationwide while the National Institute of Health Policy Development says the number is close to 3,000, or twice the number of licensed medical practitioners produced each year. Some 100 physicians took the nursing board exam in June 2002.

For her part, Dr. Sarreal mourns more the loss of highly skilled specialists to Nursing. She tells of Pediatric Surgeons and OB-Gynecologists who gave up their practice and are now taking up Nursing to land sure jobs abroad.

Dr. Sarreal isn’t opting for foreign work, even for the higher pay a nursing career offers abroad. “I began my practice here and I’m going to end it here. It’s my country and it needs me,” she said.

The large-scale shift to Nursing means fewer applicants in medical schools, which means that medical schools have less money to spend on good teachers and equipment. Data from the Commission on Higher Education (CHED) show that medical enrollments have been dropping since 1994. CHED records reveal that there were only 27,000 medical graduates in 2001, 30,000 in 2000 and 34,000 in 1998 and 1999.

The United States and Europe, however, are sucking the Philippines dry of this dwindling supply of medical talent at a time when domestic demand for healthcare workers is surging.

There were 348,000 domestic vacancies for healthcare workers in 2002 compared to 314,000 in 2001. In contrast, the USA will have over 700,000 vacancies for registered nurses from 2002 to 2012. And far better pay scales. Japan now needs over one million nurses while 17,000 Filipino nurses migrated to the United Kingdom in 2003.

Despite the manifold problems besetting the medical profession, Dr. Santos-Ocampo says the quality of Filipino doctors remains high.

“Our doctors are OK. We have maintained the high quality of medical training by being very strict in the board exams.”

The high failure rate testifies to the success of this unyielding emphasis on quality. Last year’s board exam saw 1,183 examinees pass out of 2,301 candidates, a success rate of 51%.

And it is in this consistently high quality of Filipino doctors that rests the only certain hope that the medical profession will emerge stronger from the fearful crises facing it.

Thursday, March 6, 2008

Almost but not quite

Manny Pangilinan, CEO of Philippine Long Distance Telephone Company (PLDT), knows a money maker when he sees it.

Hence his recent play for ownership of Philippine Multimedia Systems, Inc., owner of Dream TV, the Philippines only digital Direct-to-Home (DTH) broadcast service.

Pundits, however, claim Dream TV doesn’t fit the description of a profitable business. Dream’s subscriber base stands somewhere from 20-30,000 despite hefty subscription rate cuts and other marketing perks aimed at boosting subscription among its mainly upper crust clientele. Dream was founded in 2001.

And although the company doesn’t release revenue figures, analysts said the company is barely keeping its head above water and is saddled with debt.

But Pangilinan’s vision for a PLDT-run Dream TV is quite practical. It’s to make DTH more affordable by cutting subscription costs so Filipinos cable TV subscribers have more incentive to switch to DTH. Dream’s three subscription plans begin at P7,600.00 (US$138), a figure Pangilinan wants to bring down to about P800 (US$15) or lower.

He also wants to expand content to some 200 channels (another come on for cable subs) by teaming up with Echostar Communications, the US’ second largest DTH provider.

That goal remains a dream since PLDT balked at paying the US$56 million asking price of Dream TV owner Tony Cojuangco, PLDT’s ex-owner. With this deal a non-starter, Pangilinan has sought out the next best thing: IPTV (Internet Protocol Television).

IPTV, basically TV over broadband connections such as DSL, FTTH and Ethernet, is pay TV’s hot new service. It enables broadband Internet users to access TV broadcasts (both live streams and video on demand) via computers.

It carries a promise of high market growth and, for telecom operators like PLDT, minimal investment in new IP networks. The value of Asia’s IPTV industry was estimated at US$300 million in 2005. China’s IPTV market alone was valued at US$36 million last year.

IPTV is currently the only service that enables swift entry into the lucrative broadcast media by telecom operators like PLDT, the Philippines’ largest. Pangilinan is known to be keen on diversifying into broadcasting. In 2001, he sought to buy two-thirds of industry leader GMA Network for P8.5 billion.

IPTV might yet get PLDT into broadcasting, and without much legal pain since the Philippines lacks regulations governing IPTV.

PLDT operates the Philippines largest broadband IP network and also owns Netopia, the Philippines’ largest Internet cafĂ© chain. It also owns Mabuhay Philippine Satellite Corporation, the country’s only satellite company. It operates Agila-2, the only in-orbit satellite that is also Dream TV’s satellite platform. The convergence is obvious.

For the present, however, Pangilinan is seeking out buyers for PLDT’s one-third stake in Beyond Cable, which controls two-thirds of all cable TV subscribers. PLDT paid P3 billion for Beyond Cable in 2001. The company is co-owned by ABS-CBN Broadcasting, the second largest network.

Divesting its cable TV holdings gives PLDT a clear shot at the cable and DTH subscribers to be targeted by its nascent IPTV business. Another smart move.

Whatever happens in Pangilinan’s latest quest for supremacy in convergence seems to ensure the existence of only one DTH provider in the Philippines. And one dominant IPTV provider.

DTH in Asia: Living up to its promise

Asia’s potential as the world’s largest market for Direct-to-Home (DTH) satellite television is one step away from becoming a reality. And China is expected to take that crucial step in 2006.

Should China live up to its word and give the go ahead for DTH—and analysts say the 2008 Beijing Olympics should compel China to do just that—the results might surpass those attained by India.

China’s southern neighbor began commercial DTH operations only in October 2003 and by December 2004 was said to have over three million subscribers. These huge numbers dwarf those of Japan, Asia’s current DTH leader. Japan’s sole DTH service, SKY PerfecTV!, reported 3.75 million subscribers in 2005. And SKY PerfecTV! began broadcasting in 1992, eight years after Japan launched the world's first direct broadcast satellite.

China promises to become Asia’s—and the world’s—largest market for satellite TV. Some 260 million households are the potential market for DTH, said the State Administration of Radio, Film and Television (SARFT), China’s broadcasting regulator. Analysts expect China’s DTH subscribers to hit 30 million by 2008, if DTH get the green light in 2006.

Reaching this projected number won’t be that difficult since China already has an existing DTH market, albeit an underground one. U.S. firm IMS Research estimates there are over 25 million illegally installed digital satellite-TV households in China, a number almost similar to the total installed DTH base in the US.

Still illegal
The problem in addressing China’s potentially huge DTH market is that Chinese law makes it illegal for individual Chinese to receive DTH programs on their own satellite receivers. Regular apartment buildings are also restricted from setting up satellite dishes to receive DTH.

Fewer restrictions would have made China the world’s leading DTH country. Instead, world telecoms waits for China to finally let DTH loose this year. If it doesn’t, well, there’s always 2007.

Doubts about China’s willingness to launch DTH were fueled in August 2005 when new regulations were issued that increase Chinese control over foreign TV programs and ban more foreign satellite broadcasters from entering the market. Controlling foreign influences and protecting China’s culture were the reasons invoked for the tougher rules.

In April, China limited all media companies to a single programming joint venture, and in July banned Chinese broadcasters and foreign investors from jointly operating TV channels. Foreign broadcasters with the right to broadcast in some areas include News Corporation's Star TV, Phoenix Satellite Television (a News Corporation affiliate) and Viacom's MTV.

Signs of liberalization
China will have to show more seriousness in launching DTH services by passing the long awaited Telecommunications Law, which was to have shown its face in 2000.

Observers say the Telecommunications Law is on the agenda for review by the National People's Congress in August 2006 and will most likely be promulgated in 2007. This new law is expected to permit convergence of the Internet, media and telecoms networks in China.

Chinese DTH satellites, however, are poised for launch—SinoSat-2 later this year and ChinaSat-9 by late 2007—and are to join the in-orbit Apstar-6, another DTH satellite. SinoSat-2 is China's first direct broadcast satellite and its largest to date.

China has about 360 million households, of which 100 million receive cable TV programs. Research firm PricewaterhouseCoopers expects satellite growth to outpace that of cable by 2009 due mainly to growth in China’s satellite-broadcast industry.

Indian DTH: no longer lost in space
Indian DTH finally got off the ground in October 2003. “Dish TV,” the DTH offering from Subhash Chandra’s ASC Enterprises, launched that month followed in 2004 by “DD Direct Plus” from state-owned Doordarshan.

After nine years, Rupert Murdoch’s Star TV will roll out its DTH service in mid-2006 under the banner of “Tata Sky Ltd,” an 80:20 joint venture between Tata Group and Star TV. Waiting for its curtain call is India’s fourth DTH provider, Noida Software Technology Park Ltd (NSTPL), which is to begin its service in mid-2006.

NSTPL, a company of the JK Jain-controlled Jain Studios, said its DTH service called “360TV” would initially offer 30 to 50 channels out of an eventual 125. It said the service would be the first to offer data services such as financial and legal services, stock market, travel and trade information.

Two more players are scheduled to enter the DTH arena: Sun Network and Anil Ambani of the Reliance Group. Sun plans to launch its US$34 million DTH service via an independent company called “Sun Direct TV”.

A key step Tata Sky took towards its aim of becoming India's largest digital TV platform and revolutionizing TV broadcasting was to corner all 12 Ku-band transponders on Insat-4A, India’s first DTH satellite. Launched in December 2005 by Arianespace, Insat-4A is operational.

In contrast, both Doordarshan and Dish TV use C-band transponders on the NSS-6 satellite owned by European firm, SES Global.

More competition: lower prices
More competition is helping Indian consumers where it counts the most: by lowering subscription prices and improving service.

In April 2005, Dish TV scrapped its subscription fee for new users for a year to match Doordarshan’s offer of free-to-air DTH. Doordarshan is heavily promoting the advantages offered by its free-to-air DTH service, which it markets under the brand name, DD Direct Plus.

Doordarshan has waived the subscription fee for DD Direct Plus and allows subscribers to purchase their set top boxes (STBs) on the open market. DD Direct Plus carries 44 video and audio channels, soon to be increased to 50 according to Doordarshan.

In another competitive move, Dish TV launched India’s first DTH movie-on-demand (MOD) service featuring the latest Bollywood hits. Launched February 2006, this service makes two movies available for a week and permits viewers to control which movie they want to watch and when.

Dish TV targeted one million subscribers in 2005 while DD Direct Plus aimed for five million, two million more than its claimed subscribers in 2004.

Research firm Media Partners Asia (MPA) predicts that DTH will become India’s primary digital platform in the long term, taking over 65% of subscribers. IPTV is expected to take 25% while cable’s share should drop to 10%.

DTH in Asia
India is the sole exception to the Asian DTH rule: two operators are enough; one even better. Japan, South Korea, Malaysia, Thailand and The Philippines each have a single DTH operator. Australia and its extremely competitive market hosts two operators, but this might soon change. There is as yet no clear indication of how many DTH operators China intends to license but it is certain these will be joint ventures as required by Chinese law.

Even India, which has taken to DTH with gusto, expects its existing six operators to be pared down because of competition and consolidation to perhaps two or three survivors, according to analysts.

With both China and India entering the fray, Asia stands to assume a lead role in the world DTH market. The Satellite Industry Association (SIA) said DTH services comprised 81% or $79 billion of total satellite service revenues in 2004. It noted that satellite services were leading the satellite industry’s ongoing recovery, accounting for 63% of industry revenues totaling $97 billion in 2004.

SIA predicts that consumer satellite services (the key growth driver in 2003 and 2004) will lead to a sustained industry recovery before 2010. SIA said 53% of all global launches in 2004 were U.S. government related while 47% were commercial.

Eight Asian countries (China, India, Japan, Malaysia, South Korea, Australia, Thailand and The Philippines) between them had some 36 million DTH subscribers in 2004, including 25 million from China’s underground DTH market.

DTH’s taking center stage in India plus China’s promised launch of DTH this year will enable Asia/Pacific to remain the world's fastest-growing TV distribution market. Analysts estimate the region’s 13.3% CAGR, with revenues rising from US$16 billion in 2004 to US$30 billion in 2009.

A selection of Asia’s DTH markets presents a varied picture of opportunities present in each country. What is apparent, however, is the pursuit of digitalization by a growing number of these countries. Australia, Japan and South Korea continue to forge ahead in exploiting digitalization and will complete the digitalization of their broadcast services by 2015. Other Asian countries have begun the catch up process.

Japan
The current strategies of SKY Perfect Communications Inc., Japan’s sole DTH provider, and JSAT Corporation (JSAT), the country’s leading satellite operator with nine satellites, show a remarkable convergence of vision between both business partners.

In its strategy for mid-term management development until 2010, SKY Perfect said it would “promote the establishment and spread of a multi-channel culture in the future” with the introduction of satellite delivered digital multi-channel broadcasting.

SKY Perfect projects over five million subscribers at the end of FY 2007 and over eight million by 2010, or double the number in 2005. SKY Perfect said it would push hard to attain its mid-term vision to move digital technology forward and establish an even more diverse multi-channel culture within Japan.

JSAT, which hosts the SKY PerfecTV! DTH service, said it wanted to promote hybrid networks that combine satellites and fiber optics, satellites and mobile units, satellites and wireless and other options. HDTV is a technology in which satellites can play a key role, according to JSAT.

SKY Perfect’s 3.75 million subscribers in 2005 accounted for only 8% of Japanese households and was a fourth of 16 million satellite households.

In 2004, Japan reported 3.6 million DTH subscribers, an increase of 150,000 from 2003. Cable subscribers rose by 400,000 to 5.35 million. DTH and cable penetration stood at 18%, a figure the satellite broadcasting industry aims to increase to 30% in the coming years. The nationwide transition to digital broadcasting by 2010 is another key factor in the upbeat outlook for SKY Perfect.

Malaysia
Astro All Asia Networks Plc, Malaysia’s only licensed satellite DTH platform, was present in 33% of all Malaysian TV homes during the first nine months of 2005.

That translated into 1.76 million Astro subscribers, a net increase of 66,500 year-on-year. Astro also reported a 90% rise in net profits. It also announced improvements in group revenues and ARPU plus a drop in churn.

Astro began operations in 1996 and now offers 55 channels with an array of foreign and local programs in Malay, Chinese and Hindi for Malaysia’s multi-ethnic society. The company’s growth into a leading Asian DTH provider is all the more remarkable since Malaysia has only four million households, some 97% of which have TV sets.

The past year, however, saw the emergence of two new challengers in the space of four months to challenge Astro’s pay TV dominance: MiTV and Fine TV. The market entry of both MiTV and Fine TV ended Astro’s eight-year monopoly of pay TV service.

Analysts, however, expect Astro to respond to competition by exploiting its considerable advantages in content and content distribution. Astro has announced huge investments in new technology, content and customer service. It emphasized a determined effort to defend its market share that includes adding 50 new channels by the end of 2006.

The introduction of these new channels, however, depends upon the successful launch and operation of the Measat-3 DTH satellite. Originally due to launch in December 2005, Measat-3 is now scheduled for liftoff in the third quarter of 2006 on board a Proton/Breeze M vehicle from Baikonur, Kazakhstan. The new satellite will serve Malaysia, Southeast and Central Asia, Australia, Africa, the Middle East and Eastern Europe.

South Korea
One of South Korea’s most explosive digital growth areas has been digital satellite broadcasting. Launched only in December 2001 by sole DTH operator Korea Digital Satellite (KDS), the SkyLife DTH service had reached 11% of all households by 2003 and had 1.8 million subscribers by 2005.

KDS is South Korea’s first digital broadcaster and remains the lone provider of digital services nationwide.

SkyLife, which carries 160 channels, says its subscriber growth rate is the highest in the world and ascribes this to its constant effort at meeting subscribers’ demands for better picture and sound quality using digital technology.

Korea’s pay-TV market has also showed similar high growth with nearly 80% of some 17 million households subscribing to DTH or cable TV services in 2005. Analysts say this extraordinary expansion is mostly due to the low subscription for cable TV service (some US$5 monthly) and the tough competition against DTH that drives prices down.

SkyLife will keep focused on providing improved digital technologies in 2006, according to company sources. It intends to roll out advanced services such as integrated PVRs (personal video recorders) by mid-2006. SkyLife also plans to enhance its HD services by introducing H.264, a next-generation compression technology.

Australia
Foxtel, the top DTH operator, and Austar United Communications expect to turn the corner beginning 2006 with rising subscriber numbers and a mutual agreement to end analog television broadcasts by March 2007.

More subscribers and lower churn helped Foxtel increase revenues to $1.06 billion during the first half of 2005, a 39% year-on-year improvement. The drain caused by Foxtel’s heavy investment in programming content, however, resulted in a net loss of $109 million for the first half of the year.

Foxtel exceeded the one million subscriber milestone during the year. Over 70% of these subscribers are on the company’s digital platform with many opting for the more lucrative premium services.

Foxtel and Austar said a future growth area for pay TV is the provisioning of video content for 3G mobile phones. They will also explore content delivery over emerging technologies following the results of a trial with terrestrial Digital Video Broadcast Handheld (DVB-H) mobile devices.

They also plan further extensive development of interactive services. These will include on-demand programming; new EPG services such as remote booking for PDRs and developing portable personal digital video devices that connect with in home PDRs. Foxtel also intends to introduce a new portable digital TV service for handheld devices in early 2007. The service will only be available to subscribers that own PDRs. Mobility is seen as the next big thing in the delivery of TV content.

Monday, March 3, 2008

"Informationals" and the lively art of long writing

In this era of short attention spans and paltry English prose, there's money to be had in writing long stories. Right?

The intuitive answer is "Wrong." Pinoys need all the help they can get just pronouncing English correctly, let alone writing it.

The counter-intuitive answer is "Right." Pinoys (or the 20% that bother to read English) will read long prose. The trick is finding ways to get their eyes to start moving from left to right.

The answer, however, is "Right-est" when it comes to writing for business. Business, after all, is the Largest User of English in this country. Think call centers and you'll get the point.

But if business can talk the talk (in English with an American twang), can it write right in English? Especially when faced with ad agencies that claim the best ads are those that don't need any words at all--and who with fanatical zeal strive to create the Perfect Mute Ad.

What might be true of English in advertising certainly won't be true of English in other external business communication tools. What I call "informationals" (special reports, newsletters, print media supplements and non-advertising media suited to inform in more detail) demand "long writing".

Informationals thrive on long writing because it's got to explain more, especially if a product or service is rooted in a science such as computers and communications.

Truth is, you can't escape long writing in business-to-consumer (B2C) communications. It's as endemic as the User's Manual.

Just because it's lengthy doesn't mean long writing has to be turgid. Not at all. The art lies in making information delightful to read.

I "long write" for companies and business organizations and constantly re-discover the fundamentals of good business writing apply to writing informationals.

First, you've got to have something to say, i.e. information. You've also got to do a lot of research. That means mining the Internet--the long writer's best friend--to uncover data relevant to your theme.

Then come the interviews with experts. I believe it's this aspect that's often missing in many informationals.

Anyone that's read a country or industry report by a bank or multinational lending agency such as the World Bank will be hard pressed to find experts being quoted.

It's probably this reliance on in-house experts (and a corresponding reluctance to cite individual experts, especially outside experts) that give business writing its bland reputation.

This seeming reluctance to interview is also apparent in writing B2C informationals. The art of interviewing is a painfully earned skill, as journalists will affirm, and I suppose it's too much to expect these same skills from your average in-house writer.

But then, you can't interview the competition. They'd call that espionage.

The end point of information harvesting is the writing. An "outsourced" or freelance writer with experience in journalism or advocacy will fall back on the five "Ws" when composing his piece.

In contrast, an in-house company writer will tend towards "invisibility." That is, he won't rock the boat by writing in a way that's markedly different from past reports. His bosses might notice the change and not all will be happy with it.

I've found that writing informationals occupies ground between these opposite poles. The middle ground involves starting with a bang (a tasteful yet catchy lead) and using the writer's art to sow words, phrases and insights that make the informational an entertaining and very informative read.

It's not easy and this suggestion won't work in many cases (because it's against conventional wisdom), but it's far better than deciphering a User's Manual or wincing through two pages of fluff extolling a product to high heavens.

Delightfully written informationals will make anyone's eyes begin moving left to right because it does two things at once: inform in abundance and entertain in style.

Informationals do this and business might just find it profitable to use informationals more often. "In-Writers" (informationals writers) might profit, too.

My website at www.geocities.com/peftok/informationals.html explains informationals more.

Choose your poison

Taking a bus at EDSA (E. de los Santos Avenue) is always a case of choosing your poison.

EDSA air is a lingering brew of poisonous exhaust emissions containing carbon monoxide, sulfur dioxide, lead and particulate matter from thousands of diesel, gasoline and two-stroke motorcycle engines. There's also the infernal dust that never seems to dissipate.

Taking an open-air EDSA bus guarantees you'll inhale toxic fumes by the lungful. And the longer you stay on the bus, the more death-dealing particulates you absorb.

The Department of Health says motor vehicles account for 80% of the country's total pollution. Of the estimated 4,000 Filipinos who die each year because of air pollution, most can probably be linked to EDSA pollution.

One Filipino doctor, speaking about his air pollution patients, believes it takes just 15 minutes for a person to exhibit symptoms of pollution poisoning (breathing difficulty, headaches, nausea).

And that pollution, being oil, clings to your skin. Wiping your face with a handkerchief, or cleaning your nostrils, will show you how black and disgusting EDSA's deadly air is.

One hour in an open-air bus, therefore, is practically a death sentence. Holding a handkerchief to your nose won't save you from the permeating pollution. Not even a 3M dust mask will.

You'll probably need a portable oxygen tank with a full-face mask for real protection.

I salute all those MMDA (Metro Manila Development Authority) traffic enforcers who spend hours at EDSA pollution hot spots such as Cubao disciplining bus drivers. Those heroic enforcers do their thankless jobs without any form of effective protection against toxic exhaust emissions.

Most wrap handkerchiefs over their noses while some use those colorful but useless motorcycle dust masks in a vain effort to repel toxic pollutants. These brave men are slowly dying while doing their duty.

EDSA's notoriously toxic air will remain poisonous so long as the "geniuses" in government believe sporadic--and next to useless--anti-smoke belching drives are the solution to Metro Manila's worsening vehicle pollution problem. And whatever happened to the much hyped Smoke-Free EDSA campaign of 2003?

"Air conditioned" buses aren't much safer. A lot smell terrible. Some might even be poisonous.

The stink inside some of these buses is so nauseating it's choking. The putrid odor from fungus and bacteria in the aircon system combined with the stench from dirty seats, filthy floors, rotting garbage, spit and vomit create a disgusting, musty stench that has forced me to abandon buses shortly after I boarded.

Sometimes, the aircon is turned on so high you can see the chlorofluorocarbon coolant (mainly freon) spew out of the vents. The coolant smells "toxic" and probably is toxic in badly maintained aircon systems.

Many aircon buses at EDSA are second hand vehicles imported from South Korea and Japan. After a time, some of these jalopies get so beat up you wonder why they're still on the road.

Aircon bus owners often grouse about the unfair competition from the MRT (Metro Rail Transit) and its fast, air-conditioned trains. Why don't these people turn their buses into clean, comfortable air-conditioned havens to draw more riders away from the MRT?

I'd ride a sanitary aircon bus with clean, breathable air. I'm sure a lot of short distance riders will, too.

Right now, however, it's "Lose-Lose" for us commuters when it comes to EDSA buses.

It's criminal to have commuters suffer the agony of plying EDSA aboard open-air buses that ram carcinogenic pollution down their throats, or in "aircon" buses that trigger allergies, asthma attacks, vertigo and vomiting.

Choose your poison and pray. I do, most everyday.

Asia's space powers intensify their battle for the ultimate high ground of space

China’s destruction of one of its derelict satellites using a direct ascent, kinetic kill missile in January 2007—for which it has offered no satisfactory explanation—has goaded Asia’s non-communist military powers into accelerating their military satellite programs in self defense.

In October 2007, India and South Korea said they were putting more muscle into their awakening military satellite programs with heavy infrastructure investments, and new doctrines that consider the eventuality of warfighting in space.

Japan has not announced a similar acceleration of its intelligence gathering satellite program. Its successful orbiting of four satellites to spy on North Korea, however, illustrates the importance it places on satellite derived imagery as guarantors of its national security.

The satellites spying on North Korea and its nuclear facilities constitute Japan’s single largest defense hardware expenditure in decades, and are among the most expensive military satellites built by any nation.

The year 2007 has turned into a watershed for Asia’s military space powers. The year 2008 promises to see military Asia push their satellite spy programs further ahead, confirming the hallowed military maxim—especially appreciated in India—that the second highest ground is no good.

And what high ground can trump space? The value of space as a strategic advantage has too often been driven home at India’s expense: first during the Kargil War in 1999, and lately by China’s space surprise in January 2007.

India: exploiting the high ground
Indian military analysts believe dedicated milsats (which India did not have in 1999 and which it still does not have today) would have avoided many of the intelligence failures that led to the war’s casualty bill.

India relied on dual use satellites operated by the Indian Space Research Organization (ISRO) for battlefield photoreconnaissance. The poor clarity of the photos provided by these satellites’ low resolution cameras left much to be desired.

The 50-day Kargil War, apart from leading to higher Indian defense budgets, also had the welcome effect of convincing India’s politicians that military satellites are assets worth their weight in soldiers’ lives.

India’s first military satellite—Cartosat-2A—is finally scheduled for launch in March 2008, eight years after the Kargil War.

Cartosat-2A carries panchromatic cameras that provide advanced imagery. It will fulfill a long-standing demand from the armed forces for a dedicated reconnaissance spacecraft.

Cartosat-2A will be followed by the launch of two more advanced imaging satellites, perhaps in 2008, that will give India the capability of keeping a round-the-clock eye on China and Pakistan.

The first of these new milsats will carry an Israeli SAR (synthetic aperture radar) that can image surface objects through cloud and rain.

More important than this important piece of spaceware, however, is that the Indian army, air force and navy are developing a doctrine or philosophy for utilizing space at tactical, operational and strategic levels.

That doctrine is embodied in India’s “Defense Space Vision 2020.” The first phase of this ambitious space program gives priority to developing space-based intelligence, reconnaissance, surveillance, communication and navigation capabilities until 2012.

At a Combined Commanders' Conference held this October, the Indian Army confirmed the importance of space as a vital arena for future exploitation. It said it had set up a "Space Cell" at its headquarters to coordinate space-based applications in a joint services operational environment.

India is also considering organizing a tri-service aerospace command, first for defensive missions, but which would take on an offensive complexion if Indian satellites are threatened. This Indian aerospace command should become operational in six to seven years, said some military sources.

The immediate perceived threat comes from China. India believes the Chinese have a space system in place consisting of very small maneuvering satellites loaded with explosives that will ram bigger satellites in suicide missions.

The Indian military is apprehensive its remote sensing satellites are vulnerable to these Chinese kamikaze attacks. The loss of its dual use Insat satellites will rob India of its military communication capability.

India is developing laser and directed-energy weapons to counter this perceived Chinese threat.

The organization of an Indian aerospace command has the support of India’s parliament. In 2004, the committee in charge of this project asked the government to set up the command to exploit the potential of space technology in a future war.

The successful launch and orbiting of Cartosat-2A will signal the official birth of India’s military satellite capability.

Described as a satellite based surveillance system, Cartosat-2A will give Indian Army commanders the ability to closely monitor troop movements and military installations in China.

The brains of this milsat surveillance system will consist of a defense imagery processing and analysis centre in New Delhi and a satellite control facility in Bhopal.

Military analysts say India is eager to make use of the tactical, operational and strategic advantages of space since they feel future wars cannot be fought without the effective exploitation space. The Indian armed forces also believe network-centric warfare hinges on the continued operation of military and dual use satellites.

The realization that it needs military satellites has been on the front burner of India’s armed forces. In 2005, India said its military space-based reconnaissance system was in an advanced stage of development and was expected to be operational by 2008 with the launch of Cartosat-2A.

India’s fleet of dual use, photo imagery satellites include Resourcesat-1 launched in October 2003 and considered India's most sophisticated remote sensing satellite to date. There’s the 2.5 meter, high-resolution Cartosat-1 satellite equipped with two cameras able to point at an object from two different angles. Another mapping satellite, Cartosat-2, provides one-meter resolution and was launched in January 2007.

South Korea
South Korea launched KoreaSat-5, its first milsat, only in August 2006. This dual use satellite gives South Korea a system that offers secure military communications. South Korea has eight other civilian and dual use satellites in orbit.

Over a year later and South Korea is now talking about building its space war capabilities by deploying warfare-ready laser weapons and establishing a space operations command by 2025. All this also because of China’s successful ASAT test last January.

The South Korean air force recently released a “Star Wars” report that reveals South Korea’s plans for exploiting and fighting in space.

The report says that by 2015, the air force plans to have built the infrastructure for its space operations. During this stage, the air force will set up a joint military-private sector satellite project and install a ballistic missile early warning radar system by 2012.

In the second stage from 2016-2025, the air force will build an optical and laser-based space surveillance system. It will also deploy warfare-ready laser weapons.

The third stage (post 2025) will see the organization of an air force space command, including the deployment of airborne and space-based laser weapons.

Today, however, South Korea has two dual use satellites in orbit and is to deploy its first SAR satellite in 2010. The in-orbit Arirang-1 and Arirang-2 keep watch over North Korea. Launched in 2006, Arirang-2 is a modern photoreconnaissance satellite with a 1 meter resolution digital camera.

The $268 million SAR satellite, Arirang-5, is to begin operations in 2010. The satellite’s SAR can also image underground or undersea features for mineral exploration and other purposes, which is the civilian aspect of its dual use nature.

The U.S. view
In August 2007, Lieutenant General Kevin Campbell, head of the U.S. Army's Space and Missile Defense Command, warned that China might be three years from being able to disrupt U.S. military satellites in a regional conflict.

Other U.S. commanders are concerned that China's anti-satellite weapons could interfere with military communications with South Korea and Japan. In response, the U.S. intends to develop more powerful and flexible forces in the Pacific to reduce miscalculations by Beijing.

The U.S. also intends to ensure the robust protection of its satellites from future Chinese “surprises”.

The U.S. operates some 110 military satellites, almost thrice the number (40) operated by Russia. There are also some 500 active civilian and dual use satellites hovering above the planet.

The U.S.’ immediate military response to the Chinese ASAT test was to order the U.S. Air Force to conduct a wide-ranging review of the vulnerabilities of U.S. military satellites.

The U.S. believes China is attempting to perfect a wide range of ASAT weapons, including jammers for navigation and communications satellites, and the deployment of space mines that could disable U.S. milsats.

As part of the review, the USAF is to recommend whether new arms programs (or “offensive counter-space” systems) to disable enemy space systems are needed.

Despite the chill in its relations with the U.S., China said it remained open to cooperating on space development with the U.S. China also said it remains keen on taking part in the International Space Station (ISS) project.

The Pentagon, however, opposes China's involvement in the ISS and other space cooperation with Beijing, and sees China's space program as a looming threat to U.S. satellite systems.