Thuraya puts Asian expansion on hold

Lingering problems with its first satellite have forced Thuraya to re-think its expansion into Asia this year.

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By  Richard Agnew Published  September 21, 2004

Lingering problems with its first satellite have forced Thuraya to re-think its expansion into Asia this year. The UAE-based operator recently repositioned the Boeing-built spacecraft to access new markets and extend its coverage to the east. But power loss issues that have plagued the Thuraya-1 satellite since its launch look likely to prompt the provider to delay the move until its third spacecraft is delivered in 2005. “We have a difficulty in terms of expanding in Asia,” says Jawal Al Jarwan, executive manager, business development, Thuraya. “We have succeeded in expanding to Myanmar and parts of China and Mongolia. But going to the Far East would require further studies with our manufacturer on the old satellite,” he adds. Thuraya conceded that the spacecraft was suffering technical difficulties early on after its launch in 2000 and received compensation of US$252 million for the fault earlier this year. After its second satellite lifted off in June 2003, the provider transferred traffic from Thuraya-1 to the new spacecraft and said that it would use the original to provide total coverage of Asia by the end of 2004. The satellite is from the 702 family of Boeing’s spacecraft, which have also reportedly caused problems for other operators, including Telesat and PanAmSat. Total insurance claims on 702 models are believed to have topped US$1.6 billion. It was also revealed last month that a group of insurance underwriters are seeking compensation from the US-based manufacturer for damages they paid out for defects in the spacecraft. Thuraya says it is in discussions with Boeing over plans that would still allow it to extend its coverage, including the replacement of Thuraya-1 over Asia by a new spacecraft to be delivered by Boeing in mid-2005. “The plans are on hold for the time being,” says Al Jarwan. “We have various options… including the possibility of using the third satellite. We’re looking to serve customers [in Asia] for a long time and provide a reliable service,” he adds. But the move gives a jolt to Thuraya’s aim to generate considerable subscriber growth from populous countries that were not previously part of its focus. After rapid expansion in 2003 helped by the Iraq War and new solutions, the operator aimed to increase its user base to 300,000 by the end of 2004. But currently, it is believed to have 211,000 subscribers on board, up from 185,000 in December last year. Countries that the operator intends to cover in Asia include China, Malaysia, Indonesia, Singapore, Thailand, Philippines, Cambodia, Vietnam, Japan, Myanmar, Lao, Mongolia, the Koreas, Papua New Guinea, Brunei and parts of the Russian Federation. But much of Thuraya’s focus has been transferred to parts of Africa brought within reach of its network by the launch of its second satellite. It has been expanding the deployment of its public call office solutions in several African countries since their launch in 2003. Thuraya also struck a joint venture agreement earlier this year with shareholder, Sudatel, to market and distribute its products in Sudan, although the move has yet to be finalised. In addition, since May, Thuraya has been in the process of extending its services into new countries in southern Africa. Licensing and distribution arrangements are currently at various stages in each market, which include Congo, Angola, Zambia, Tanzania, Mozambique, Malawi, Mauritius, Rwanda and Burundi. “Africa will again be the prime market for Thuraya in 2005,” Al Jarwan adds.

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