Space

Thuraya CEO shares plans for fleet update and view of market

SAN FRANCISCO — Two years after acquiring mobile satellite services provider Thuraya Telecommunications, Emerati fleet operator Yahsat is prepared to begin updating its L-band fleet.

In August, Yahsat announced a contract with Airbus Defence and Space for Thuraya-4 NGS that includes an option for a second identical satellite, Thuraya-5 NGS. Yahsat plans to spend approximately $500 million to build and launch Thuraya-4 NGS to provide voice and data connectivity over the Middle East, Africa, Europe and Central Asia, refresh Thuraya’s ground network and update its suite of mobile communications products.

Thuraya CEO Ali Al Hashemi discussed the recent order and the near-term outlook for the satellite market with SpaceNews correspondent Debra Werner in mid-October.

Hashemi also leads Yahsat Government Solutions. The United Arab Emirates’ state-owned investment company Mubadala owns Yahsat.

What will be the impact of Thuraya-4 NGS on your fleet or operations?

The impact of Thuraya-4 NGS will be very big. Today, Thuraya does very well at voice-centric type of services and today we are still focusing on voice as our main market. But at the same time, we’re going to move to become more data-centric. With Thuraya-4 NGS, we will be better positioned to continue our mission as a leader in voice and prove ourselves to be leaders in data. When I say data, I mean internet-of-things and the like. Thuraya-4 will enable us to do that.

Why did you opt for an all-electric satellite?

It gives you longer life, better capabilities, higher data rate. 

What is the lifespan you’re expecting from this satellite?

It is 15 years.

What made you select Airbus?

We invited many bidders. The solution was supposed to be, first of all, technically very fitted to our operation. And secondly, we considered the price, which is a normal procedure. We are very proud to partner with Airbus. As you are aware, Airbus and Thales built our first fleet, Yahsat-1A and Yahsat-1B. Now, Airbus is continuing that business with us as Thuraya. They were the best bidder in terms of technical capabilities and in terms of price. Overall, they were very well suited for our mission.

What is your impression of the overall satellite communications market in 2020?

I will focus my answer on Thuraya because I’m also holding the position as the head of Yahsat Government Solution. For governments, the answer the simple. Governments will continue to need satellites, especially in terms of emergencies.

When it comes to Thuraya, we have a unique strategy of focusing on fragmented markets, because we have the disadvantage of not having a global coverage. This disadvantage has worked to our advantage. Since we don’t have global coverage, we are not focusing on serving big marine or aeronautical fleets.

Even during 2020, the impact on Thuraya was very low. A great example is mining in Africa. Miners continue to work and need our services. Fisherman continue to work and need our services. Because of our strategy to focus on very fragmented markets, on last-mile of connectivity, the impact of COVID-19 was really low.

Is the United States C-band auction having an impact on the market?

The UAE view the L-band and the Ka-band satellites as being very important. From reading in the news I see the UAE are more focused now on health care, waste management, food efficiency, and not surprisingly, connectivity. Satellites are very important when it comes to connectivity. I doubt this will affect us a lot. No matter what happens and no matter what decision the nations take, we’re going to progress very well with them and cooperate very well because connectivity is very important.

Do you have any predictions for satellite market conditions in the next couple of years?

I will focus on L-band. The government side is very easy. The psychology of government is, “I want to buy it because when I need it, I will use it with full capacity.” This is applicable to the U.S., the U.K. and all the capable governments of the world.

Now in L-band, surprisingly, I’m seeing a trend even among our competition to do exactly what we were doing: focus on fragmented markets because the COVID-19 hurt very badly the travel industry. The market really shrank for airborne solutions targeting the big fleets. And the marine market was really cannibalized by the Ku-band. So, what is left for the L-band market is focusing on the last mile, which is the fishermen, the miners in areas that have very low infrastructure. That was our focus, not only in L-band but also in Ku-band. So it really works for our advantage. And we are seeing people imitating the strategy.

Are you considering operating nongeostationary satellites?

That’s a very interesting question. As the umbrella of Yahsat we are considering it. Thuraya operates geostationary satellites and there are advantages to that. Surprisingly, [low Earth orbit] satellites are really expensive because you have to refresh the satellites. Where in GEO if you have healthy satellites, they can produce revenue for 15 years.  That’s being said, we are always monitoring the LEO satellites as Yahsat Group.

Is the lengthy design life of all-electric satellites at odds with the desire by some operators to refresh technology frequently?

The answer to this question is really simple. The technology of L-band has really matured. Let’s compare Ka-band versus L-band. Ka-band there are few channelization services, beam-forming services. And all of that matured very well a long time ago. In the last 15 years these technologies were available in L-band. The longer the life of the L-band satellite, the better. The technology is very mature and the benefit will be marginal for any incremental technology update in the future. The end user will not notice the difference.

What are your plans for Thuraya-5 NGS?

As you are aware, Thuraya-5 is on option on the Thuraya-4 contract. We are currently sizing up the market. We are building a business plan for our shareholders to approve. The Asian market is challengeable. The dynamics of the Asian market are really different from the dynamics of the African and Middle Eastern market, which Thuraya-4 is operating in. It was very important for us to have the options with Airbus because we think we need to continue in the Asian market.

Is there anything else you wanted to say?

As I always remind my employees, we are very proud as Yahsat to operate Thuraya. Thuraya was the first satellite company in the UAE and one of the oldest within the region. The first moment when I saw Thuraya, I was 18 years old. That was 20 years ago. The heritage of Thuraya will continue. We will try to be the best L-band operator in the world. That’s our mission. And I’m sure, with the help of our leadership in the UAE, our leadership in Yahsat, and our leadership in Mubadala, we will accomplish that.

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