Beyond borders

Why the Middle East satelite sector is set to surge.

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Beyond borders
By  ITP.net Staff Writer Published  October 13, 2011

Mercer also points to the military and tracking services as growth markets. “The emergency sector is also very important for us, whether first responders, fire, or the police. Iridium features heavily in that sector, which is predominantly handset driven,” he adds.

One of the advantages that Iridium claims to have over its rivals is its pole to pole global coverage. “Other than us, people use the word ‘global’ rather loosely,” Mercer says.  “Global to us means that there isn’t a single point on the planet, from the poles to the equator, that Iridium doesn’t work from,” he says.

Iridium also hopes to gain an advantage over its rivals in the coming years by launching a new constellation of satellites that will offer improved coverage and data services globally. The company has secured financing and placed a contract with Teliasonera Space in France to build a new constellation of satellites, which is now in the design phase.

The new satellites will be launched between the first quarter of 2015 and early 2017. Iridium will build 81 satellites in total, with 66 due to go live, six as orbiting spares, and nine as ground spares.

One of the main benefits of the new satellites will be increased bandwidth capacity for end users. The existing satellites allow end users to access data at 128 Kbps, but this will increase to 1.5 Mbps with the new satellites.

But Iridium is not the only player to be investing heavily in a new generation of services. The global market leader in the MSS space, Inmarsat, also recently announced its intention to invest $1.2 billion for its fifth generation of satellites.

Inmarsat said in August that it had agreed a contract with Boeing for the delivery of three 702HP Ka-band satellites.  The Inmarsat-5 constellation will enable the company to provide a global high speed mobile broadband service.

With operations expected to start in 2014, Inmarsat-5 will support a next generation global service which will target a $1.4 billion “incremental market opportunity” in VSAT (very small aperture terminal) services in sectors including maritime, energy, government and aeronautical.

The new generation of satellites from Inmarsat will allow it to offer a mobile broadband service called Global Xpress, with speeds up to 50Mbps, to customer terminals that are 20-60cm in size.

The investment is a direct response to the rising demand that Inmarsat sees across various industries, according to Helene Bazzi, senior area manager for Inmarsat in the Middle East and Africa.

Looking forward, Bazzi confirms that Inmarsat is pursuing new licences in specific geographies where there is a need for satellite communications. In the region, Inmarsat is currently licenced in Egypt, Algeria, Morocco, Kuwait and Jordan. The company is hoping to gain a licence for Libya and a full licence in KSA.

Inmarsat is also developing a strong business in the aviation sector, by offering services that allow airlines to offer their passengers data services. Bazzi says there is a “lot of interest” from various airlines in the region, many of which are already starting to deploy services on their fleets. The company already works extensively with UAE airline Emirates.

The aviation sector is also a target for UAE-based satellite operator Thuraya. The company’s AviationComms solution has already been installed on more than 200 helicopters and business jets, and the operator is also moving into the commercial aviation sector.

Ebrahim K. Ebrahim, vice president, corporate communications, Thuraya, says the service matches the functions of GSM players and is confident that it will appeal to leisure and business travelers.

Thuraya is also developing a broadband service that will be introduced “as part of a comprehensive portfolio” of aeronautical services, Ebrahim says.

While Thuraya might lack the global coverage of its bigger rivals Inmarsat and Iridium, it has built a strong client base in the region and is widely held to be the market leader in the Middle East and Africa region.

Ebrahim says the Middle East market is growing “swiftly” and is a huge market for satellite communications, with multinational companies and NGOs relying on satellite services in many parts of the region.

Thuraya has experienced particularly strong growth on the back of its Thuraya IP broadband service, which offers streaming speeds of up to 384kbps. Thuraya IP terminals are used for tracking of vehicles and shipments, the remote control of certain field operations as well as various SCADA (Supervisory Control and Data Acquisition) applications, according to Ebrahim.

The compact A-5 size of the terminal has also made it popular among media crews, particularly when broadcasting from remote locations. With a presence that extends across borders, satellite operators face a different set of regulatory challenges compared with other operators such as GSM and fixed line players.

“The challenges faced by satellite operators lie in trying to run their business in a large number of countries while originating the services from one or a few countries,” says Ebrahim of Thuraya.

“Satellite services need to be addressed through simplified and tailored regulatory regimes that take into account the technical and commercial aspects of these networks, compared to the terrestrial ones,” he says.

Requirements such as local presence, a specific list of potential partners, establishment of local gateways and high license fees hinder the business growth for satellite operators and conflict with the purposes for which these networks were launched originally, according to Ebrahim.

However, there are also some countries that are setting an example.  “On the other hand there are other countries in the region in which the regulatory regime is very mature and where flexibility in meeting requirements is allowed as long as regulatory compliance is achieved,” he says.

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