Niche appeal

Emerging markets have always been fertile ground for the provision of mobile satellite services (MSS), but in recent years the Middle East and Africa has proven to be a particularly robust backdrop for an industry, which 10 years ago was forecast to have little commercial future. Comm. reviews the path being carved by a number of the leading MSS players, and highlights to what level the MEA region is assisting in helping raise the industry to greater heights

At the beginning of August, Inmarsat reported total revenues for the six months to end-June amounted to US$485.5 million, up 70.8 per cent year-on-year. EBITDA was up 31.5 per cent to US$264.1 million, and the mobile satellite services provider announced the highest quarterly growth in Broadband Global Area Network (BGAN) subscribers in Q208 of 3,400.

Inmarsat reported a strong acceleration in the take up and usage of its BGAN service, while its aeronautical sector revenue for the second quarter grew by 45.8 per cent due to strong demand from aeronautical customers and particularly high levels of usage for the Swift 64 service.

Swift64 serves the government aircraft and business jet markets, and a number of Inmarsat’s aeronautical services, including the recently introduced SwiftBroadband service, continued to be deployed in a number of new and on-going trials aimed at the emerging market for inflight cellular services.

Continuing to generate interest for its services, last month Inmarsat announced that A. P. Moller – Maersk, one of the world’s largest shipping companies, had signed a contract with Marlink for a large-scale retrofit of Inmarsat FleetBroadband across its Maersk Supply Service and Maersk Tankers Fleet. The two-year retrofit programme is believed to be the largest in the history of maritime satellite communications, with over 150 vessels being converted to FleetBroadband in the first phase. The vessels will be equipped with Thrane & Thrane Sailor 500 terminals.

The order covers vessels operating in all parts of the world. The first vessel in commercial service to be fitted with FleetBroadband was the ‘Maersk Challenger’, a Maersk Supply Service vessel.

The programme includes the possibility for a second phase to convert up to another 150 vessels operated by the Danish shipping group.

“A retrofit of this scale, with one of the world’s most established and respected shipping companies, is the strongest possible endorsement of our revolutionary FleetBroadband service,” commented Piers Cunningham, head of Maritime Business at Inmarsat.

“This is a ground-breaking deal. It represents a multimillion dollar commitment to Marlink, Inmarsat and Thrane & Thrane for airtime, equipment and on-going support. It confirms that FleetBroadband is the leading satcoms solution in the maritime industry today.”

As of the end of September 2008 more than 1,000 FleetBroadband terminals had been activated by maritime customers, having only been launched by Inmarsat 10 months earlier.

Looking to be able to cater to the needs of an evergrowing customer base, in August, Inmarsat confirmed the successful launch and acquisition of the third Inmarsat-4 satellite. The satellite was launched on a Proton Breeze M rocket from the Baikonur Cosmodrome in Kazakhstan on August 18.

The satellite is the third in the I-4 constellation, concluding a decade of development and a US$1.5 billion investment. The current constellation of two Inmarsat-4 satellites delivers mobile broadband services to 85 per cent of the world’s landmass, covering 98 per cent of the world’s population. The third I-4 will complete the global coverage for Inmarsat’s broadband services.

“The Inmarsat-4s are the world’s most sophisticated commercial network for mobile voice and data services, and the successful launch of the third I-4 allows us to complete the global coverage for our broadband services,” stated Andrew Sukawaty,
CEO and chairman of Inmarsat. “Once the third I-4 is operational, Inmarsat will have the only fully-funded next-generation network for mobile satellite services.”

Within the Middle East, Yahsat, the UAE’s nationally owned satellite operator and subsidiary of Mubadala Development Company, in August announced it had secured commitments of US$1.2 billion in financing to fund the Middle East’s first hybrid satellite communications system.

The satellite operator announced in May its intention to raise public private partnership-style project financing for its satellites, the first of which, Yahsat 1A, is currently being built and will launch in Q410. Yahsat 1B is expected to follow, launching in the first half of 2011.

“Yahsat received commitments from leading international and regional banks in excess of US$1.6 billion for the US$1.2 billion financing, which is a testament to the strength of our sponsorship acknowledging our business model,” Jassem Mohamed Al Zaabi, CEO of Yahsat stated.

Yahsat has already generated business through recent long-term satellite capacity leases with the UAE Armed Forces and the American company Emerging Markets
Communications, operator of one of the largest teleport facilities in the world.

Etisalat subsidiary Thuraya Satellite Telecommunications has also been active in the expansion of its network of satellites. In January this year it announced the successful launch of the Thuraya-3 satellite by sea launch.

The launch of Thuraya-3 was in preparation for the MSS provider to operate commercially in Asia-Pacific markets. In June, the Boeing Company announced the on orbit handover of the Thuraya-3 Geo-Mobile satellite, which extended Thuraya’s coverage to 170 countries in Europe, Africa and Asia. Thuraya-3 is the third Boeing-built 702 Geo-Mobile satellite for Thuraya.

“Thuraya is technically and commercially well prepared to operate the Thuraya-3 satellite after its handover,” commented Thuraya CEO Yousuf Al Sayed. “We are very excited to bring our pioneering mobile satellite service to the Asia-Pacific market, providing a range of cutting-edge communications services. There are a variety of sectors, such as rural telephony, maritime and broadband, in addition to the core mobile services that promise an excellent prospect for Thuraya in the region.”

The Thuraya-3 satellite enables Thuraya to double its current commercial coverage – including its handheld, fixed and broadband services – to parts of Asia that include markets in China, Japan, Korea, Indonesia and Australia.