The satellite communication market is constantly growing, and there is increased adoption in situations that regular GSM networks are inoperable. Satellite solutions can extend the reach of companies and allow them to work from anywhere in the world. CommsMEA asks the experts how the industry is faring.
Florian Lefèvre - Director of sales, enterprise industry EMEA, Inmarsat
Hussein Oteifa - Senior regional director, ME, SES
Tareq Abdul Raheem Al Hosani - CEO, Yahsat
CommsMEA: How is the satellite communications market in the Middle East and Africa?
Lefèvre: This is a booming market. The growth of fibre services is significantly increasing the market for broadband. However, with fibre only reaching the larger cities - primarily on the coast where they are served by high capacity submarine cables - satellite communications is providing essential broadband connectivity to more remote locations. Vitally, this is enabling remote regions to enjoy many of the benefits of economic growth and development from which they might otherwise be excluded.
Hosani: Satellite broadband technology presents tremendous opportunity for populations in the Middle East and Africa who do not yet have access to high speed internet services. Governments in many countries are keen to provide all their citizens with access to communication technology such as internet, but lack the massive resources needed to roll out traditional telecommunications infrastructure in less populated areas.
Satellite broadband, however, can instantly connect people, schools, hospitals, and businesses in hard to reach and remote communities and cost effectively provides extremely reliable, high performance internet services. It is not constrained by the business case for fixed telecommunications or cellular base stations, meaning that more home users and businesses can access services more rapidly irrespective of the population density of their location.
Oteifa: Over the past couple of years, the satellite communications market in the Middle East and North Africa has seen new players such as Avanti, ABS and SingTel which are hoping to benefit from the growth opportunities in the region.
Nonetheless, we at SES continue to see a growing demand for capacity in the increasingly competitive satellite communications market. We see a surge in demand for mobile backhaul services, broadband applications and maritime/ aeronautical networks as satellite communications on the move gain traction. We see continued demand for satellite TV broadcasting and a growing interest in high-definition TV content. The increased efforts of some national governments in the region such as Yemen, Oman, Qatar and others to launch national e-learning and broadband initiatives have also resulted in strong demand for satellite capacity.
Recently, there have been some countries such as Kuwait, Egypt, Oman, Qatar and Iraq who explore launching their own satellites. This phenomenon is not unique to the Middle East region but is something we see across the world as in Vietnam, Argentina, among others. SES believes all nations have the right to access satellite capacity.
For some countries, it makes economic sense to a launch a satellite if they can effectively allocate spectrum and capacity. Others will benefit more by collaborating with companies such as SES which can add value with their technical expertise and ability to offer redundancy.
CommsMEA: What sort of growth are you witnessing?
Lefèvre: We are witnessing growing demand for asset monitoring and control (SCADA and machine-to-machine) via L-band solutions. Also, due to the lack of GSM coverage, there is an increasing demand for mobile satellite services in certain rural areas.
Specific sectors are leading this growth. To take just a few examples, broadcasters require satellite communications to break news anywhere, anytime and differentiate themselves from their competition. Banks are using BGAN and BGAN M2M to reach new customers and connect new branches and ATMs or to deploy mobile ATMs, while NGOs are using Isatphone Pro to place phone calls at very competitive pricing.
Oteifa: Almost two years after the Arab Spring broke out, the region remains in political flux. This has had several effects on a satellite operator. Firstly, companies realise that satellite communications is a resilient and reliable form of connectivity. Secondly, satellite news gathering is seen as an important source of information.
Lastly, the geopolitical situation further underlines the importance of satellite communications. As a result, we are seeing a steady increase in demand for Ku-band mainly across the Gulf States and Afghanistan, and for C-band in the North and sub-Saharan Africa.
As mentioned earlier, the demand for broadband applications is on the rise. With the entry of Ka-band in the industry and its low cost per bit, Ka-band is considered the most ideal and cost-effective solution for broadband applications. We expect this growth segment to continue and have therefore invested in O3b Networks who will be launching the world’s first Medium Earth Orbit (MEO) satellite constellation in May 2013. O3b Networks will provide a fibre-quality, satellite-based, global internet backbone for telecom operators and ISPs in the Middle East.
Hosani: According to analysts, the satellite communications market is growing at a phenomenal rate with projections edging on an annual growth rate of 12.5% from now until 2018. In fact, the Middle East is increasingly becoming a hub for innovation in the satellite industry, and it is in the Middle East and Africa that we are projecting the highest global growth opportunities for satellite services. The connectivity and reach that satellite broadband and services offer to the remote and fast-emerging markets in Africa, the Middle East, Central and South West Asia will be an enabler to their economic growth going forward.
At Yahsat, we recently launched our YahClick satellite broadband internet service around the region in over 20 markets with multiple partnerships in place for in-country sales and service support. Early indications of demand for our service from business and government organisations are extremely positive.
CommsMEA: What are verticals are providing particularly strong growth for satellite communications?
Lefèvre: Telecommunications, media, oil and gas, government, construction and mining.
Hosani: Satellite communications are particularly suited to organisations that require high bandwidth, secure and reliable connectivity to the internet, as well as supporting the connection of remote or hard to reach geographies. Satellite communications are applicable to all verticals with the need for remote or rural locations. Examples include oil and gas, healthcare, enterprise, NGOs, and local communities.
In particular, educational establishments and government bodies can roll out e-education and e-government initiatives, seeking best practice on a global scale and implementing the most advanced practices for students and communities in even the most hard to reach areas.
Non-Government Organisations and relief missions can benefit from the quick set up of reliable communications in remote, disaster-affected and hard to reach areas of the region.
Internet service providers are also an important vertical segment with high potential as they can use satellite broadband networks to alleviate congested networks and provide service via satellite where they are unable to provide terrestrial services to additional customers on their existing networks or where it is uneconomic to invest in base stations or exchanges.
Oteifa: The Middle East and North Africa market has a strong appetite for content choice and we expect this to increase in the coming years. In our opinion, it’s a matter of time before HD is perceived as the new norm and more local broadcasters will invest in the production of HD films. To meet the needs of the increased video market, we have formed a partnership with YahSat to create YahLive. YahLive offers a direct-to-home broadcasting platform exclusively made up of HD channels which television households across the MENA region can access simply by installing a satellite dish and pointing it at 52.5 degrees East.
We also expect to see aeronautical and maritime communications services kick off, mirroring the global trend of increasing mobility services. We believe that the highly competitive global airline industry will mean that well-established Gulf carriers will soon jump on the mobility bandwagon and go the extra mile to provide connectivity in the skies and enhance customer satisfaction.
CommsMEA: What are the hurdles you are facing while attempting to deploy satellite solutions in the region?
Lefèvre: Awareness is key. The Middle East and Africa are fragmented, and people do not always know that Inmarsat solutions can help them to extend their office and use their applications anywhere in the world.
Hosani: The main challenge we face at Yahsat lies in promoting awareness of the enormous benefits that our YahClick satellite broadband services can bring to the Middle East and Africa region. Whilst fixed and mobile networks reach many urban areas in this vast geography, many businesses and communities remain without access to reliable connectivity via the internet because they are simply out of reach of terrestrial networks, or they are in a heavily congested area and the service they receive is inadequate or unreliable. In today’s economic environment, reliable, affordable connectivity is vital for growth and development.
Through our promotional campaigns and in-country service partners, we aim to raise awareness of the features and benefits of the newly launched YahClick service so that businesses and organizations can make an informed choice about their communications partner.
CommsMEA: Do telecoms operators feel they can benefit working with satellite operators? If so, what type of services might mainstream telecom operator be able to offer by partnering with satellite operators?
Oteifa: Telecom operators in the Middle East are seeing tremendous growth that has been brought about by surge in demand for mobile broadband services as well as the deregulation of local telecommunications markets. Major advances in communications and network technologies have led to the emergence of new operators introducing highly competitive services into the market.
Meanwhile, telecom operators in the Middle East are also faced with declining ARPU in the increasingly saturated urban market segments, with future growth increasingly driven by demand from rural populations and new applications. In the face of declining voice revenues, telecom operators are increasingly seeking to augment their networks with video distribution.
At the same time, telecom operators are concerned about the escalating amount of data that is being consumed when viewers access YouTube or video clips on Google or Facebook, among many other sites on the internet. This is where satellite can play a key role in helping telecom operators offload terrestrial network to ease traffic, and help offer integrated services such as triple play or roll out LTE networks in Saudi Arabia or Oman.
At SES, we believe that satellite can help telecom operators offload congested terrestrial network which is key to ensuring customer satisfaction and retention in the long run.
Lefèvre: Telecom operators are witnessing saturation of GSM penetration combined with a decrease of SMS traffic. The cost of securing new customers through an extension of their terrestrial network to encompass more remote locations can be prohibitive.
Inmarsat is well positioned to support operators in expanding their potential customer base by opening up regions which, without mobile satellite connectivity, would be too costly and too time consuming to reach. As a partner, we can provide a roaming agreement that enables operators/MVNO’s to extend their network coverage without high capital investment, whilst maintaining their direct customer relationship, number ranges and prepay platform. For the teleco’s end customer, our presence is invisible.