Thuraya has recently embarked on an ambitious pricing strategy as it looks to make its mobile satellite services more popular. Earlier this month, the company announced it was relaunching its mobile satellite services business in a bid to win more customers while promising to extend significant discounts to its existing customers.

The services will be branded ThurayaECO, and according to the operator will offer "huge savings" to customers. According to Thuraya CEO Yousuf Al Sayed, the new pricing strategy aims to break the myth "once and for all" that mobile satellite services are expensive.

Al Sayed explained the reasoning behind the operator’s new pricing strategy, detailing the terms of his expectations for ThurayaECO.

"We have always been dynamic and continuously introducing new products and services such as ThurayaDSL, second-generation satellite phones, innovative prepaid services, specialized solutions, etc.," he said.

"ThurayaECO has been internally in our plans for a long time, and it is aimed at markets where satellite solutions are not the only solutions besides other factors. ThurayaECO is a money-saving scheme compared to the majority of mobile alternatives. We expect it to achieve good results in the first six months" of its rollout.

The new service will be available in the 77 countries. Compared to Thuraya’s mainstream prepaid service, prices of ThurayaECO will be almost 70 percent cheaper for calls from Thuraya-to-Thuraya users, and discounted by as much as 55 percent for national calls.

As to the anticipated impact that such discounts will have on revenues and the operator’s profitability margins, Al Sayed explained that "the ThurayaECO business model assumes heavy usage, and hence comes the ability to provide substantially lower rates. We estimate that the impact on profitability will not be very significant in the first four months. There are commercial and technical reasons for introducing ThurayaECO at this stage. Earlier, we did not have sufficient information on the market [nor] the necessary products to support this scheme."

‘Victim of Perception’

One of the other questions that has arisen by the relaunch and its discounts is whether Thuraya’s pricing strategy was wrongheaded beforehand.

Al Sayed responded that "our strategy is geared towards expansion of our markets [and] introduction of new products and services through innovation. ThurayaECO is one component of our planned services within our strategy. It is a matter of [the] right time and space combination to trigger the right component. Mobile satellite services have always been a victim of [a] wrong perception that they are expensive. ThurayaECO will be successful and disruptive enough to break that myth once for all."

Al Sayed professes confidence that there will be a strong take-up for the service over the next 12 months, saying "we are looking forward to filling up all our spot beams in areas where ThurayaECO is available within 12 months. ThurayaECO’s prices are shockingly low for mobile satellite [service], and in most of the cases competes with GSM services in Europe even if you are not roaming. If compared to GSM roaming charges, GSM does not stand a chance. This should break open new markets."

The launch of ThurayaECO is highly significant for the operator. Al Sayed admitted "Thuraya last year announced it wants to change the rules of mobile satellite [service], and this is its first move [with] more to come. ThurayaECO is designed to position Thuraya in the mass market, and in the densely populated area to augment its rural market business. We will relentlessly re-innovate the MSS business to assert our leadership in providing affordable high quality mobile satellite services."

— Mark Holmes

Contact: Ebrahim K Ebrahim, Thuraya; e-mail: [email protected]