With the global financial downturn, satellite companies are always looking for new and emerging markets to sell their products and services. But with the increasingly global nature of the world’s economies, there are fewer markets left to explore.
One such market, however, may be the Eurasian satellite market-- a region at the crossroads of Europe and Asia, with Turkey at the epicenter. Geographically, Eurasia is not a well-defined region. Some include parts of Eastern Europe, the Middle East and North Africa in this growing region, but it is generally accepted to include Turkey and many of the former Soviet republics nicknamed the “stans” (so-called because their names end in “stan” such as Kazakhstan, Turkmenistan, etc.)
The region now called Eurasia has been a historic trading route for centuries and now with Turkey as it’s anchor, is poised to be a major satellite and telecommunications market with a growing population of over 350 million people--more than the population of the United States.
Turkey is a nation of over 75 million people, 70 percent of which are under 40 years old. The young population, eager to adopt a “digital lifestyle,” is fueling a robust demand for bandwidth and broadband services. Years of government monopolies stunted the development of the infrastructure of the country but a huge privatization and deregulation process which started in the 90s has opened up the Turkish market to competition and new investments. In 2007 alone, Turkey received a total of US$ 22 Billion in foreign investments, mainly from Western Europe.
“Turkey as with the other countries in the region, is largely an untapped market for satellite and telecommunication services,” said lhami Aygun, President of Space Systems International based in Monaco, who was formerly CEO of Eurasiasat a joint-venture between French satellite operator and the Turkish operator, Turksat.
The region is largely served by European operators such as Eutelsat and SES. The Turkish national carrier, Turksat, operates three satellites in orbit now and one of them is at the end of it operating life. Other countries in the region such as Kazakhstan have announced plans for launching their own satellites.
“Every time a new satellite is launched, demand in the region increases, so there is always a shortage of capacity in the Eurasian market,” added Aygun.
Aygun’s view is confirmed by recent studies by Euroconsult and London Satellie Exchange which tracks fill rates of satellites worldwide. In their latest study, Turksat and Arabsat have fill rates of 90-100 percent. The same study, while not specifically mentioning Eurasia said that the Middle East and North Africa-two regions that may be considered part of the Eurasian market--will lead demand and revenue 
growth for satellite services in the next five years.
Eurasia is no newcomer to the satellite industry. The very first satellite, Sputnik, was launched from the Baikonur Cosmodrome in Kazakhstan--a major commercial and military launch facility to this day.
Aygun said that the demand for satellite services in the region is being driven by the broadcasting market.
Turkey, after the United States, possesses the largest amount of private television stations at 400. In addition, there are over 1,000 radio stations operating in Turkey. “Turkey is undergoing a huge transformation now in infrastructure from analog to digital and this driving demand for bandwidth and broadband services,” said Dennis Smith, Managing Director of Hannover Fairs Turkey, organizer of major trade exhibitions in the region.
Ilhami Aygun
According to a market study by HF-Turkey, the cable industry in Turkey is estimated to be worth between US$ 30-40 Billion. This figure includes the cable infrastructure as well as equipment including set-top boxes. There are six cable operators in Turkey with a projected subscription of 3.5 million households by the end of 2008.
As for the current status of the bandwidth infrastructure in Turkey, most service providers are now offering 4 MB of bandwidth and with incoming investments this could be as high as 30 MB. In addition, 3G licenses are being tendered right now and will be finalized later this year or early 2009.
The VSAT market is also very promising, according to Aygun, bacause of the limited infrastructure even in the major cities. Hybrid networks that use a combination of satellite and wi-fi or wi-max and other terrestrial netowrks also have huge potential.
According to Aygun, the global financial crisis has not affected Turkey and other countries of the region. And it may not in the near-term, at least to the extent in other regions. The Turkish economy has been growing an average of 6-8 percent per annum since the late 1990s and its banking system has largely avoided the toxic exposure that led to the failure of other institutions in the West. Coupled with reforms in the financial sector undertaken by the Turkish government in the last few years, Aygun says Turkey is definitely a good emerging market. There is also considerable presence of capital from the Middle Eastern oil industry, which shows no sign of abating.
But Turkey in particular and Eurasia in general, remains unknown entity to North American satellite companies. Making it the biggest untapped market for North American companies so far.
Aygun foresees that the major satellite companies will focus more and more in the region and there will be a lot challenging projects. There will also be a huge demand for satellite ground equipment in the region.
