Markets for satellite communications equipment and services have expanded to fill the gaps in terrestrial broadcasting and telecommunications networks. Nowhere is this more apparent than in the Middle East, which is the focus of this article. Comprising this picture are satellite operators, such as Arabsat and NileSat; teleport operators in countries such as Dubai, Egypt and Jordan; and service providers who utilize these facilities to deliver applications to their Middle Eastern customers such as Very Small Aperture Terminal (VSAT) services in a two way satellite communications format using a particularly small dish to transmit credit card transactions and Internet services.
Satellite TV is very important as it occupies most of the available transponders in the region. The majority of satellite TV, roughly 75%, is offered Free-To-Air (FTA) with revenue generated through advertising or subsidized for some other purpose such as education. Availability and low cost make satellite TV more important in the Middle Eastern market than most other applications, but we an-ticipate broadband Internet to gain more prominence in the future.
Satellite Operators in MENA
Arabsat has ordered two major new satellites, Arabsat 5A and BADR 5, from a consortium of EADS Astrium and Thales Alenia Space. To properly address markets for the next 20 years, Arabsat 5A will have 16 C-band and 24 Ku-band transponders to replace Arabsat 2B. BADR-5 and provide full in-orbit back-up for BADR-4 and BADR-6 at the 26 ° E hot spot covering the Middle East.
Recently, NileSat has partnered with European service provider Eutelsat to provide coverage for the MENA region from 7° W. With the launch of NileSat 201 in 2010, the two companies will boost capacity in the neighborhood by 30%. This partnership should provide stability and investment, allowing NileSat to control its market.
NileSat 201, constructed by Thales Alenia Space is scheduled to be launched in mid- 2010 by Arianespace.
Current plans announced by Yahsat have the first satellite going up into an orbital position of 52.5 ° E in 2011 with the second following within a few months. Yahsat will lease capacity to existing providers and the UAE government with a focus on broadband, broadcast and corporate networking services. A partnership with SES ASTRA established YahLive, a new DTH satellite TV service. The satellite broadband service, YahClick, will launch when Yahsat 1b does in 2011. YahClick will offer broadband interactive services using ViaSat SurfBeam technology at Ka-band. It is believed demand will still be sufficient to support these as well as two other YahSat brands providing backhauling services and government applications to fixed and mobile users.
The Intelsat fleet maintains about a dozen satellites located at various points between 33° E and 85° E with footprints that include the Middle East, providing a variety of services for various customers and partners. Intelsat 15, a new Ku-band satellite built by Orbital Sciences and launched late in 2009, provides VSAT services to corporate and government customers. Services to military and the international media are among Intelsat’s strengths due to their global footprint and experience serving these sectors. There are plans to launch Intelsat 22 to 72° E in 2012 for increased coverage of the MENA region with connectivity into Europe.
Eutelsat has an ongoing partnership with NileSat to develop their constellation at 7° E. Aside from broadcasting services, Eutelsat also provides corporate data networks and broadband services such as IP backbone connectivity, on-the-move broadband access, Virtual Private Networks (VPN) and IP content distribution. The IT-centric focus of Eutelsat, through a partnership with ViaSat, gives them a potential edge in growing their ME business.
Thuraya is another important operator based in the UAE providing mobile satellite service (MSS) from the geostationary orbit. Their small satellite phone has good penetration throughout MENA and South Asia. The transition to Internet Protocol (IP) transmission for all information types will increase the attractiveness of Thuraya’s versatile system, which can serve both fixed and mobile users.
Applications Driving Demand for Services
Today, Free to Air (FTA) satellite TV relies on the same digital TV platforms that made DIRECTV, DISH and BSkyB into mega-businesses, but MENA viewers watch the programming without paying. Payment for satellite capacity comes from the program or network provider, who leases bandwidth and arranges for the uplink. The source of their money depends on the region and content, which can be derived from advertisers, governments, religious groups or other organizations wishing to transmit a message.
The power of FTA in MENA was summed up by Jawad J. Abbassi, founder and general manager of Arab Advisors Group: "In other parts of the world, the ‘Information Revolution’ was played out on the Internet, but in the MENA region, it took place over Satellite TV."
Two-way satellite broadband, using VSATs, is establishing itself in MENA. For the purpose of this article, we define broadband satellite service as one capable of at least 1 Mbps data rate on the forward and return links. The general trend is to offer asymmetrical bandwidth, with the forward link providing download speeds up to 10 Mbps and the return link upload rate between 500 kbps and 2 Mbps. Pricing is dictated by these data rates.
Several factors are making this form of communications more readily available at acceptable costs: the coverage ability of the new generation of GEO satellites at Ku and Ka bands; the remarkable new performance and features of VSAT terminals for fixed, transportable and mobile installation; and the array of service providers who invested in hubs and support organizations.
A large part of the investment and operating cost is due to the hub station; satellite bandwidth is another relatively-high monthly expense. The substantial hurdle has been reduced by low-cost hub solutions from iDirect, N
D SatCom and Newtec. New investment in hub capabilities includes MENOS and Internet Start, two ventures marketing VSAT equipment and operation to end users in the public and private sectors.
Prospects and Opportunities in the Market
The Cabsat/Satellite MENA event to be held from March 2-4, 2010 comes at a difficult time for MENA as well as the rest of the world, as witnessed by financial difficulties experienced in the host city of Dubai. However, there is already a very substantial base of satellite investment and the region is well covered. This means the infrastructure is in place to meet current and developing demand. There is no need to roll out major fiber or 3G because even remote areas are with easy reach.
Like the history of satellite communications in other regions, MENA is rich in experience and unique in its perspective. As indicated by Scott Sobhani, there is demand for current and evolving services, and some new operators are finding opportunities for investment. Currently, nearly all requirements are met through standard Ku-band satellites using the resources of media cities and a mix of local and foreign ground resources. MSS L-band is provided through Thuraya in a focused manner, and Ka band is arriving on the scene in the next year. These can further shape the telecommunications scene in MENA in ways much different from North America and Western Europe.
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Bruce Elbert has over 30 years of experience in satellite communications and is the President of Application Technology Strategy, Inc., which assists satellite operators, network providers and users in the public and private sectors. He is an author and educator in these fields, having produced seven titles and conducted technical and business training around the world. During 25 years with Hughes Electronics, he directed major technical projects and led business activities in the U.S. and overseas. He is the author of The Satellite Communication Applications Handbook, second edition (Artech House, 2004). Web site: http://www.applicationstrategy.com/ Email: bruce@applicationstrategy.com Contributing to this article was Michelle Elbert, Director of Marketing for Satellite Markets and Research and concurrently a consultant with Application Technology Strategy, Inc. She has extensive experience in the satellite and IT industries and has an M.B.A. from Concordia University. She can be reached at michelle@satellitemarkets.com
