The need for both fixed and mobile satellite services has been steadily on the rise. A recent world market survey by Euroconsult, a consulting firm, states that an estimated 1,145 satellites or 51% more satellites are to be launched between 2011 and 2020, of which government demand continues to drive the market, but will remain concentrated in a handful of countries. The report reveals that revenues from the manufacture and launch of these 1,145 satellites will be worth $196 billion worldwide, among which 70% can be attributed to government demands.
There are nearly 100 satellite service providers serving the MEA region, both based in Europe as well as locally. But, in the current trend, the MEA satellite sector is showing a mixed growth trend, more so with the recent political unrest happening in this region. As Claude Rousseau, senior analyst at NSR, a telecom market research and consulting firm, says: “We have been seeing issues in satellite services growing in the MEA region. In the past 6-8 months, we have seen that satellite services have had a maximum impact, especially in those countries where there has been civil unrest. Communications are totally restricted in some of the countries such as in Libya.
“While restrictions in satellite service usage due to civil unrest are happening at one end, we also note that in countries like Egypt and Syria, there have been users of satellite communications by governments in power,” he says.
However, he says that new telecom operators in the MEA region are continuing to deploy satellite services in a big way. “This is mainly due to the booming smartphone business and its services in this region that is putting pressure on telcos to provide more bandwidth for users. Unfortunately, in this region there is not enough deployment of radio towers, and per capacity per network to actually provide the level of service that the user expects. This, through backhaul satellite services, wireless services can extend the reach for the required connectivity.
“Thuraya is continuing to develop more vertical markets, and with Yahsat, we see that it is just starting where services will probably expand. In fact, there is good scope and a positive way forward,” he adds.
Helene Bazzi, senior area manager, MEA, Central Asia and Russia for Inmarsat, a global mobile satellite communications service provider, says that in general, MEA is the busiest region in terms of traffic generation for satellite services. She says: “In fact, it has been increasing in the past few years due to specific factors that are in need of these services such as O&G and media. Since we launched BGAN offering standard IP data services, there has been an increase in broadcast agencies relying more on our satellite services due to the reliability of our network and also the quality of services. From Inmarsat perspective, we see more demand for voice and broadband services in the MEA region.”
Mobile satellite services
The mobile satellite services (MSS) market in the MEA region is expected to reach about 545,000 in-service units by 2012, up from 495,000 units this year, and the CAGR for the period 2010 to 2020 will be 10%, according to an NSR study.
Rousseau says that in terms of new services offered through mobile satellite services, there are aspects of consumer broadband as well as enterprise networks. He says: “For governments as well, I think there’s going to be more interest on satellite services. Of course, Yahsat having a large portion of its pay load dedicated to specific government frequencies, we think, it will increase the interest for countries in this region.
“As for the handheld market, MEA has a majority of satellite services deployed. But this accounts for mostly prepaid user units, and hence don’t necessarily bring in high ARPU to them. In fact, satellite service provider, Thuraya, is selling satellite phones for business travelers to be used in remote locations. So, these phones’ use is on the rise, be it leasing or sale,” he adds.
Inmarsat is preparing for the KA-band satellite services and the Inmarsat 5 constellation service that will enable it to provide high speed mobile broadband services. “This is a project worth $1.2 billion targeting an incremental market opportunity of $1.4 billion, to launch 3 KA-band satellites. The launch of all the three satellites is to take place in 2013, and the commercial operations will commence from early 2014 covering areas such as aeronautics, maritime, energy, and government sectors,” Bazzi says.
“I would say that the demand for satellite services will increase with education about these services. And, this is what Inmarsat means moving from a horizontal approach to a vertical approach market. We started to work on understanding what specific services this region needs from a MSS perspective, and how can we, after developing specific services educate other industries on how to benefit from this industry. And, this has brought in a change overall in our revenue increase globally,” she adds.
Fixed satellite services
The fixed satellite services (FSS) industry has always seen good growth prospects in the MEA region. Today, we see a majority of FSS usages in areas of V-SAT for corporates, Oil & Gas and banking sectors, trunking applications, GSM backhaul, and remote base stations.
However, in the current trend, Rousseau says that the business in the FSS sector in Africa is seeing a downward trend. A major challenge for FSS segment involves substantial cost for ground equipment to subscribers, which will cause some issues in the MEA region in terms of its uptake.
The two main FSS operators in the MEA region are Arabsat and Nilesat. While Arabsat is a legacy satellite operator serving the needs of telecom operators in the region; NileSat mainly caters to free-to-air video distribution services.
While Africa doesn’t have a dominant satellite player, Intersat can be the most prominent broadband internet service provider, followed by SES and Eutelsat. In the ME, Eutelsat is also a key player for government military services.
“A lot of infrastructure is being built on the ground, but we know that it has been strained and the quality of services is not good. However, the good aspect about this is that now wireless communications are coming up, and a lot of wireless backhaul are being deployed by FSS providers across the region,” he says.
However, for mobility satellite players, Rousseau says there wasn’t much need for backhaul for mobility solutions, but sure there is a need for many of them to provide handhelds, and when the number of subscribers go up, or when there is a need to diversify their product lines, it requires broadband capability such as Inmarsat’s BGAN, Thuraya IP and other service providers that have increased their throughput on KB/sec.
While backhauling continues to grow in this industry, the new area will be Medium Earth Orbit satellite constellation, which will primarily address backhaul services as well as some trunking services.