Aiming for the skies

Satellite service providers are stepping beyond the domain of telecom backhaul functions to fully-fledged data provisions as they beat the recession and garner interest from Middle East firms

Tags: Al Yah Satellite Communications CompanyBroadband Global Area Network BGANGSMInmarsatThuraya Satellite Telecommunications CompanyUnited Arab Emirates
  • E-Mail
Aiming for the skies While terrestrial services have a huge cost advantage, satellite services cannot be equalled in certain applications. - Shawkat Ahmed, chief commercial officer, Yahsat.
More pics ›
By  Sathya Mithra Ashok Published  August 8, 2009 Network Middle East Logo

Recession-proof is how the satellite industry in the Middle East calls itself. While most other verticals have been feeling the pinch of the slowdown, to a lesser or greater extent, satellite services appear to have beaten the trend entirely.

"The recession has not had a great impact on our business. This is because satellite services are really something that support essential communication. This is where people do not really have a choice, and since we provide cost-effective solutions compared to our competitors, we can have the end-users actually saving money by deploying our solutions," says Sven Rohte, chief commercial officer at Thuraya.

Inmarsat's VP of strategic corporate development, Samer Halawi agrees: "If you look at the people who use our services, they use them because they have to, not because it is a luxury. So the impact has been very minimal. A slowdown could be felt as a result of building faster networks, but that will be felt down the years and not immediately."

The essential nature of the services provided by satellites often take the shape of telecom-based voice communications provided to corporates and organisations with remote offices across the region. In fact, this is counted as one of the biggest and most obvious advantage of a satellite service.

"When you have a highly urban area, usually it is very well connected by terrestrial services. But as soon as you get out of urban areas and go to places with low population density you start losing services. As an organisation, you have to cover those areas but to cover them with terrestrial services is really not cost effective. With satellite services you get blanket coverage so you can focus more effectively on those people in the remote and rural areas," explains Halawi.

He also points out that satellite communications are much more effective when companies have a highly mobile workforce.

"While terrestrial services have a huge cost advantage, satellite services cannot be equalled in certain applications - such as point to multi-point transmission as is necessary in the broadcasting industry. Apart from a larger area of coverage, satellites also score higher in terms of reliability in certain countries where telecom operations are not highly advanced," says Shawkat Ahmed, chief commercial officer at Al Yah Satellite Communications Company (Yahsat).

The bread and butter

Of course, satellites come with their own set of disadvantages. These include everything from cost, to terminals and equipment that fail to pick up signals properly when kept indoors and speeds that are still lower than the best terrestrial networks in the world. In fact, satellite providers assure us that the services remain complementary to terrestrial services and are not really competitive to them.

Disadvantages or not, many verticals across the Middle East continue to adopt these services, especially if they are ones that require coverage where terrestrial networks cannot reach.

"We have three client structures - the maritime, the land and the aeronautical. And within the land market, our strongest verticals are the media, government and oil and gas. And in the maritime market, the strongest vertical by far is the shipping industry. In fact, the maritime industry contributes around 60% of our business. We offer our services in the air as well, and we are offering more and more GSM in this area. We offer our existing services and people can use their own devices instead of the devices available on the plane," says Halawi.

Rohte states: "When we talk about vertical markets we talk about oil and gas, media etc. The typical users of Thuraya's IP terminals are media companies like CNN and other networks, and they will use these for in the field operations to support their camera teams."

The government and defence sectors are also rapidly turning towards commercial satellite services to satisfy their need for rapid communication. While Rohte assures that Thuraya will be targeting this growing sector more in the next three years, Ahmed states that one of Yahsat's launch customers will include one of the region's major military organisations.

"Our military service will be available with our first satellite which is planned for launch in the last quarter of 2010. With commercial satellite capacity you always run the risk of interference, so what we have done is we have introduced a payload on both satellites which works on military frequency and has got all the features that provide a reliable and secure military communication service.

And for this we already have a launch customer, the UAE government. They have signed a long term agreement for their armed forces on both satellites. We are also in touch with other governments - in and out of the region - that are interested in getting capacity for their military apps," says Ahmed.

And, according to satellite providers, the most popular services among these verticals is no longer just GSM backhauling and voice communications, but high speed data services.

"The mood is for high speed data services. A lot of voice services are covered by GSM around the region, but when you go to the remote areas most of them lack any infrastructural high speed data connectivity. So what we offer is a high speed solution and a lot of organisations are interested in those, including the government users, the oil and gas users and the media users. They use them for different purposes and applications but the service remains the high speed data service," says Halawi.

"We see a lot of organisations adopting our broadband services, which provide them with a serious option to migrate to IP-based services. We see this of relevance not only to oil and gas firms, but also internet cafes, hotels and travel agents in places like Africa. We have also figured out that there is a huge interest for these services among governments, the education sector and the health industry," states Ahmed.

Over the next three years, most satellite providers believe that this trend will be reinforced and grow stronger.

Ahmed points out: "Many years back the main application for satellites used to be telecom backhauling, which means when you were calling from India to Europe, the call would be routed by satellite and there used to be a lag period. That is how the entire commercial satellite industry came into existence. And that is dying now. Most of these links are through submarine cables now, and that is one segment where the satellite industry will not have many takers in times to come. That business is going down dramatically."

Inmarsat's Halawi predicts that provision of GSM in the air will pick up quite a bit in the near future. This will include GSM not just for voice apps but for data delivery as well on devices like the BlackBerry.

"There will be increased adoption of data services, that is certainly for sure. We will see a big boost in SCADA (supervisory control and data acquisition) applications. We will also see more closed-user groups, wherein satellite technology is able to tie-in a certain number of people regardless of whether they are on satellite communication or GSM or even whether they are on radio. In fact, at Thuraya we have this available," explained Rohte.

Preparing for the future

As they anticipate the growing penetration of data-based satellite services in the region, service providers are also gearing up their preparations. This includes everything from setting up and operating their own earth stations to adding more personnel and roping in more distribution partners.

"For our old services we were relying on partners to operate their own earth stations. We would send the traffic to the earth station and they would take it to the end customer. But when we started BGAN (Broadband Global Area Network), we built and have been operating our own earth stations. The reason for this is because with BGAN we are offering high speed data and that is solution-based. If you have a solution you want to be able to control the quality and service end-to-end. In order to do that we have to own and operate our own earth stations," says Halawi.

Yahsat is planning on increasing its current staff strength of 70 to 100 by the time of launch and also to set up its own earth station in Abu Dhabi.

Satellite providers are also linked by their ambitions to expand beyond the region and cover geographical areas that they have not yet touched, even as they acknowledge the growth of traffic from within the region. In short, there is no sign of a slowdown in their plans in the near future.

"A few years back many people were saying that as the GSM networks roll out, as the terrestrial network improves, the satellite industry is going to suffer. But if you look at the trends, during the last four or five years the growth in the satellite industry has been phenomenal. In the year 2000, you had less than 100,000 VSATs deployed all over the world. Now you have almost 1 million VSATs deployed for satellite networks. So the industry is doing very well, it is growing," says Ahmed.

And none of them have any reason to doubt that the satellite network business will continue growing over the next few years.

Satellite services - Disadvantages

Limited technology: An average satellite stays in orbit and provides services for around 15 years. Due to this, technology improvements on satellites cannot be rolled out as rapidly as on terrestrial networks. This also means that satellites can provide only limited transmission speeds and cannot rival the fibre networks of the ground.

Cost: Service provision with satellites is still a very expensive proposition, including the terminal equipment required at customer premises and the actual service. This is likely to come down in the near future.

Line of sight: Some terminals and customer-premise equipment still tend to work better outdoors than indoors. According to satellite service providers, they are working on this and the technology should drastically improve soon.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code