[Satellite News 02-17-10] Arabsat is touting its 2009 performance as proof that the Middle East satellite market is resistant to the global economic downturn, and Arabsat ready to capitalize on the booming broadband market.
    In 2009, the company grew its overall revenues by 20 percent while aggressively pursuing the acquisition of new satellites. Arabsat CEO Khalid Balkheyour outlined his view of the regional and revealed that the company is now in the position to sign a signature satellite broadband deal this year.

Balkheyour: I don’t think the satellite industry was impacted that much by economic downturn. I think our business grew. We expect 2010 will sustain the same growth. The needs and the demands for satellite capacity are still there.

Balkheyour: I don’t think so, but  I think it may have an impact on small TV broadcaster or an operator who is looking for financing or loans. But in the normal business, I don’t think it will have an impact.
 

Balkheyour: Africa is expanding, and more operators are targeting Africa including Arabsat. We will have two new satellites this year. One of them will be covering all Africa. We are also going East towards Pakistan and other areas. We do see a demand. We see expected growth from anywhere between 4 percent to 6 percent in terms of demand for capacity and supply additions remain in line with growth in transponder demand in the next two years.

Satellite News: We have around 66 percent of our revenues come from broadcasting. We have 40 percent come from telecoms. Most of our coverage is in the Arab world, but most of our new satellites will cover the rest of Africa. If you count North Africa as part of Africa, around 50 percent of our revenues come from the telecoms side. We expect to expand more with the next generation of satellites which cover all of Africa.

Balkheyour: The MENA region has become a key satellite market, but regional operators dominate the market of TV broadcasting. I think the demand will be there. We have a lot of competition from other players, but there is also competition from fiber links going around the whole region. There is an increasing amount of deregulation in the region. There is huge demand for broadband services. It is hard to say whether there will be too much supply. We think there is enough demand to fill up our satellites over the next three to five years.

Balkheyour: We do expect to announce something like that this year. We are looking at what the best model is for Arabsat. Right now, we are finalizing the business model and talking to clients about what the best business case is for both parties. I think we will have similar models to what we have seen in Europe and the United States. We see a strong demand for satellite broadband services in the Middle East. Many countries in the region still have low levels of broadband penetration. They are seeking solutions here and we look to provide them with such solutions. We want to be the leader in providing new services

Balkheyour: We don’t think we will need further financing over the next two to three years. With our existing programs, we are fine. In 2009, we signed for two new satellites worth $700 million. We are doing well. In March, we are launching a satellite (Arabsat 5A), which will be a replacement satellite, which is almost fully sold out. In May, we have another satellite (Arabsat 5B) launching, which again is almost fully sold. We have a satellite (Arabsat 5C) due to launch in 2011. We expect more than 50 percent to be filled at launch. We also have a back-up satellite launching in 2012 (Arabsat 6B) but has different beam configuration onboard, which we are discussing with clients. The most important point on the satellite to be launched next year is that it is a Ka-band satellite. There is a huge demand for satellite broadband, and we are talking to clients about the best model in which to sell Ka-band capacity.