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Wed 2 Apr 2008 04:00 AM

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Launch control

Amid a dearth of satellite bandwidth, Dr Jassem Mohamed Al Zaabi, CEO of satellite operator Yahsat, explains how he intends to carve a niche among lucrative commercial and government clients.

Amid a dearth of satellite bandwidth, Jassem Mohamed Al Zaabi, CEO of satellite operator Yahsat, explains how he intends to carve a niche among lucrative commercial and government clients.

Jassem Mohamed Al Zaabi, CEO of Abu Dhabi-based satellite operator Al Yah Satellite Communications Company (Yahsat), has every reason to be optimistic about the future of his business.

Amid a shortage of satellite bandwidth, particularly in the Middle East and Africa, combined with surging demand for satellite voice, data and broadcast services, Yahsat is already attracting interest from around the world. Not bad for a company that is only due to launch its first satellite in the second half of 2010.

Confidence in the company may stem to the fact that it is owned by Mubadala Development Company, an investment firm owned by the government of Abu Dhabi and charged with the task of diversifying the emirate's economy through capital-intensive investments.

This has certainly given Yahsat ample funding to design and build its satellites, which when complete will differ from those of its rival operators' by catering to both commercial and governmental clients, in diverse industries including broadcast, commercial voice and data, and defense.

Yahsat's commercial plans, combined with the deep pockets of its owner, are already attracting some heavyweight international clients that anticipate the chronic demand for satellite bandwidth likely to exist in the region by 2010.

Indeed, Yahsat signed an agreement to provide C-band capacity to Emerging Markets Communications, Inc, a leading provider of global satellite communications, in March, in a deal worth some AED400 million. For Al Zaabi, EMC's decision came as a welcome vote of confidence in his company. "EMC is one of the largest satellite service providers," he says.

"For it to choose to work with Yahsat and to have the confidence in our systems and to engage with us in a long term agreement, two and a half years before launching a satellite, gives some idea of the confidence in Yahsat. It also tells you what kind of partners Yahsat is targeting - we are looking only at class-A partners."

EMC Corp is operator of one of the largest teleports facilities in the world. Under the terms of the contract EMC will lease transponders on Yahsat's powerful C-Band on a long-term basis to serve high profile government, commercial and non-profit organisations including the United Nations and various Fortune 500 companies.

Broad remit

Yahsat first came under the spotlight of the business media after signing a letter of intent with Arianespace in January to launch its first satellite. More recently, the company signed an agreement with US-based International Launch Services (ILS) and Thales Alenia Space of France to launch its second satellite in 2011. A third satellite is also planned for the following year. Prior to this, Yahsat spent a significant amount of time developing its satellite system before signing a French consortium including EADS to build it, in 2007.

Yahsat will offer services including voice, data, video, and internet trunking, over C-band and Ku bands, according to Al Zaabi. It will cover the Middle East, Africa, parts of Asia including Pakistan, in addition to parts of Southern Europe.

And Al Zaabi hopes that this coverage, combined with the company's technology platform, will be instrumental in Yahsat's success. "We are equipped to be very competitive, not only from a coverage perspective, but also in terms of technology," Al Zaabi says.
He adds that Yahsat understands the challenges faced by satellite TV broadcasters and that it intends to work closely with companies involved in the sector. "We do have a Ku capacity which is used for TV broadcasters and we provide that over the Middle East, Africa and parts of South East Asia." Furthermore, Yahsat also intends to offer value beyond mere bandwidth, by working with its clients to offer services tailored to their needs. "We want to give them as many A-Z solutions and packages as possible, instead of just supplying them with capacity, and there is a very interactive process we are having with our service providers to make sure we support them by the time they start their services," he adds.

"We are very interactive with our clients and we want them to work with us in such a way that we can minimise their headaches. We want them to focus on their business and we want to take care of any problems they might come across."

High definition age

In the next few years, Al Zaabi sees broadcasting, and particularly high definition TV, as a key driver for the satellite sector. "We believe high definition is in high demand and we believe everybody has to work towards high definition end-user equipment," he says.

"Many broadcasters now have plans to go high definition. I think Yahsat and other satellite players are ready to upgrade once the other parties - end-users and the broadcasters - are ready to go there."

To this end, Yahsat hopes to have its first satellite ready to serve the high definition television sector in time for the 2010 South Africa World Cup, which could prove to be an ideal occasion to raise awareness of high definition television, according to Al Zaabi. "We believe 2010 will definitely see a breakthrough when it comes to high definition market use, and we will be there at that time, to support this new revolution," he says.

"Whenever there is a global sporting event, you see an increase in TV and electronics sales...and that has been the trend for the past few decades. When you have the World Cup, you will see an increase in TV sales, and most of it will be high definition-equipped. It will give the market another boost to go high definition."

This trend could in turn exacerbate a trend that is already apparent in the sector - a lack of satellite capacity. While this might be unfortunate for satellite TV operators and other business groups that require satellite services, it offers a significant business opportunity to Yahsat.

"Demand is outperforming the supply - that is a fact today. To find capacity in the market today is a challenge. To find capacity in the market at the right price is an even bigger challenge," Al Zaabi says. "We believe it is a good time for Yahsat to enter the market. We believe it is not only good news for Yahsat, but also good news for the industry. The industry is in need of capacity for the time being.

"The reason there is high demand and too little capacity in the market is that hunger for bandwidth has increased, so there is more usage."

Al Zaabi adds that satellite communications regulations are quite relaxed in many countries, which allows service providers to use more capacity to provide user applications and services.

"The industry needs capacity, and the satellite service providers need to keep up, not just by providing bandwidth but by making sure that this bandwidth can be utilised by the service providers."

And despite Yahsat having a number of competitors, Al Zaabi is optimistic that the company will carve a niche for itself, partly because of the cost and technical difficulties of launching new satellites, which could hinder the efforts of some older operators. "There will always be replacement satellites and there will always be bigger satellites, and there will be more utilised, direct technology-based satellites.

"But I think it is not like before. One of the biggest challenges now for new satellite operators is to co-ordinate and secure a new orbital position," he adds. "Many of the players in the industry are very mature. You need to have very solid business planning and know exactly what you are doing in this industry. The fact that we have assets up there for 15 years gives us the motive to keep the proper applications and services utilised in that capacity."

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