Yahsat CEO Sees Bright Future as Company Moves Toward Launch

[Satellite News 03-06-09] Al Yah Satellite Communications Co. (Yahsat) has one of the most ambitious business plans of any new satellite operator around the globe. The company signed deals in August 2007 with EADS Astrium and Thales Alenia Space for the buildout of a dual satellite communications system valued at more $1.6 billion. The two satellites are scheduled to be launched in the second half of 2010.
Satellite News spoke with Yahsat CEO Jassem Al Zaabi about how the operator’s plans are progressing and the challenges ahead.

Satellite News: Do you think the Middle East feel the impact from the recession in the same way other economies have? How would this impact the satellite industry?

Al Zaabi: Of course there will be an impact in the Middle East. I think regardless of which industry you belong to, you can see an impact. How will that relate to the satellite industry in the Middle East? There are many answers to this. If you are an operator, you would worry about demand from your clients and whether their budgets are going down when it comes to telecoms consumption, but we still think this is going to be one of the least impacted sectors compared to other areas such as consumer electronics, advertising, etc. The demand for capacity is still strong and that is good news for us. It is growing. We have not seen any change in terms of pricing. This is a good message we are sending out. I think telecoms and satellite are probably less impacted compared to other industries. We think the demand will not only stay there but grow. If there is an impact on telecoms networks, the impact will be felt first with terrestrial networks. This means there will be less development in terms of providing capacity and developing infrastructure in our areas, which means satellite has to step in.

Satellite News: As Yahsat is not launching satellites for another year or so, will the economic situation have any impact?

Al Zaabi: I am not sure it will. In terms of financing, all of that is closed. In terms of demand, a big chunk of our capacity is already leased. So it is now just a case of getting the satellite launched to get the revenues.

Satellite News: What types of deals do you hope to do this year?

Al Zaabi: We are trying to do deals in terms of broadband services this year. That will be a key focus for us. I think we are trying to be more engaged with the satellite service provider community this year to build Yahsat’s sales network. We want to build out our distribution platform, and that is one of the priorities for us this year.

Satellite News: How do you view the role of satellites and satellite capacity in the military satellite communications arena?

Al Zaabi: It is not only about pure satellite capability but how you build your services and understanding military clients. This is definitely a culture we have been able to build through our anchor clients we have, which is the UAE military. We think even though we have a very big military client like the UAE, we think this will open the door for us to sell our services to other governments and militaries in the area. This is going to be one area that we start soon. We are trying to make sure we have a very good value proposition and good services first, and I don’t mean only capacity but the whole package.

Satellite News: Do you think the region can sustain multiple satellite operators or will there be an oversupply of capacity?

Al Zaabi: We don’t see there being oversupply of capacity in the market. Clients are not acting that way. Middle East operators are being extra cautious when planning their future capacity. It is very interesting to see the diversity of applications and services by satellite operators nowadays. It not just a matter of covering one area and having as many transponders as you can. People are trying to balance different capacities such, as Ku-, C- and even Ka-band capacity. I do not think there will be an oversupply situation in the next three years. I think the fact there is a credit crunch could impact new players coming to the market and offering new capacity. I am sure existing operators will have a cautious approach as they manage through this difficult economic period.

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