Aiming for the skies

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While terrestrial services have a huge cost advantage, satellite services cannot be equalled in certain applications. - Shawkat Ahmed, chief commercial officer, Yahsat.

Satellite service providers are stepping beyond the domain of telecom backhaul functions to fully-fledged data provisions as they beat the recession and garner interest from Middle East firms.

Recession-proof is how the satellite industry in the Middle East calls itself. While most other verticals have been feeling the pinch of the slowdown, to a lesser or greater extent, satellite services appear to have beaten the trend entirely.

"The recession has not had a great impact on our business. This is because satellite services are really something that support essential communication. This is where people do not really have a choice, and since we provide cost-effective solutions compared to our competitors, we can have the end-users actually saving money by deploying our solutions," says Sven Rohte, chief commercial officer at Thuraya.

Inmarsat's VP of strategic corporate development, Samer Halawi agrees: "If you look at the people who use our services, they use them because they have to, not because it is a luxury. So the impact has been very minimal. A slowdown could be felt as a result of building faster networks, but that will be felt down the years and not immediately."

The essential nature of the services provided by satellites often take the shape of telecom-based voice communications provided to corporates and organisations with remote offices across the region. In fact, this is counted as one of the biggest and most obvious advantage of a satellite service.

"When you have a highly urban area, usually it is very well connected by terrestrial services. But as soon as you get out of urban areas and go to places with low population density you start losing services. As an organisation, you have to cover those areas but to cover them with terrestrial services is really not cost effective. With satellite services you get blanket coverage so you can focus more effectively on those people in the remote and rural areas," explains Halawi.

He also points out that satellite communications are much more effective when companies have a highly mobile workforce.

"While terrestrial services have a huge cost advantage, satellite services cannot be equalled in certain applications - such as point to multi-point transmission as is necessary in the broadcasting industry. Apart from a larger area of coverage, satellites also score higher in terms of reliability in certain countries where telecom operations are not highly advanced," says Shawkat Ahmed, chief commercial officer at Al Yah Satellite Communications Company (Yahsat).

The bread and butter

Of course, satellites come with their own set of disadvantages. These include everything from cost, to terminals and equipment that fail to pick up signals properly when kept indoors and speeds that are still lower than the best terrestrial networks in the world. In fact, satellite providers assure us that the services remain complementary to terrestrial services and are not really competitive to them.

Disadvantages or not, many verticals across the Middle East continue to adopt these services, especially if they are ones that require coverage where terrestrial networks cannot reach.

"We have three client structures - the maritime, the land and the aeronautical. And within the land market, our strongest verticals are the media, government and oil and gas. And in the maritime market, the strongest vertical by far is the shipping industry. In fact, the maritime industry contributes around 60% of our business. We offer our services in the air as well, and we are offering more and more GSM in this area. We offer our existing services and people can use their own devices instead of the devices available on the plane," says Halawi.

Rohte states: "When we talk about vertical markets we talk about oil and gas, media etc. The typical users of Thuraya's IP terminals are media companies like CNN and other networks, and they will use these for in the field operations to support their camera teams."

The government and defence sectors are also rapidly turning towards commercial satellite services to satisfy their need for rapid communication. While Rohte assures that Thuraya will be targeting this growing sector more in the next three years, Ahmed states that one of Yahsat's launch customers will include one of the region's major military organisations.

"Our military service will be available with our first satellite which is planned for launch in the last quarter of 2010. With commercial satellite capacity you always run the risk of interference, so what we have done is we have introduced a payload on both satellites which works on military frequency and has got all the features that provide a reliable and secure military communication service.

And for this we already have a launch customer, the UAE government. They have signed a long term agreement for their armed forces on both satellites. We are also in touch with other governments - in and out of the region - that are interested in getting capacity for their military apps," says Ahmed.

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